Cramer Remix: Why buybacks have not benefited Bed Bath & Beyond

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Bed Bath & Beyond has failed to fend off competition from online businesses, such as Amazon, because they were never committed to the task, CNBC’s Jim Cramer said Thursday.

“Instead, they decided to spend a fortune buying back stock at much higher prices than where it’s currently trading,” the “Mad Money” host said. “In retrospect, they might as well have set that money on fire.”

Bed Bath & Beyond embarked on an aggressive buyback program in recent years, but the stock is down nearly 80% from February 2015. 

Activist investors in Legion Partners, Macellum Advisors, and Ancora Advisors have made moves to turnaround the down-on-its-luck home goods retailer, but Bed Bath & Beyond’s fundamentals are “awful,” Cramer said.

“They want a new CEO, and they’ll do whatever it takes to make that happen,” he said. “As Steven Temares is running the joint, you know what, I don’t think you should own it. I like the activists’ plan to turn the company around much more than management’s murky thoughts about how to get things back on track.”

Taking profit won’t hurt

Traders work on the floor of the New York Stock Exchange.

Brendan McDermid | Reuters

A market sell-off can be followed down the road by another rally, but investors should be bracing themselves for more downside, CNBC’s Jim Cramer said Thursday.

The Dow Jones Industrial Average fell more than 122 points during the session, its fourth straight down day, and the S&P 500 and Nasdaq Composite both slid about 0.20%.

“I am pretty sanguine about this market longer-term, but the disciplined thing to do right now is to raise a little cash, prepare for a pullback … and then get ready to do some buying again,” the host said. “Just like a gardener who cuts back plants in order to encourage growth, a sell-off can potentially breed a better market down the road.”

Go deeper here

Activist campaigns 2019

Logo of global biopharmaceutical company Bristol-Myers Squibb is pictured on the blouse of an employee in Le Passage, near Agen, France March 29, 2018.

Regis Duvignau | REUTERS

Wall Street tends to applaud big-name activist hedge funds that buy into a poor-performing company to turn it around, but not all activist positions turn out to be ideal for shareholders, Cramer said.

“Sometimes, they reach an accommodation with management and it works. Other times they get involved in proxy fights that distract the people running the show and the trade falls apart,” the host said. “When it works, though, riding the coattails of the activists can be very lucrative, which is why we’ve spent so much time talking about these situations lately.”

Activist investors such as Starboard Value, Elliott Management and Legion Partners, among others, have made plays in recent months to shake up management at a number of companies.

Read Cramer’s review of the top four activist stories of the year here

Cutting to the core

Core Lab

Source: Core Lab

Cramer asked Core Laboratories CEO David Demshur why the price of oil hasn’t risen “dramatically” given issues in Venezuela, tightened sanctions against Iran, and OPEC.

A recent report said “the U.S. production has reached 2.4 million barrels a day. This is up some 7 million barrels in the last eight years,” Demshur said. “This is a remarkable gain in crude.”

Catch the full interview here

Women’s Health Week: May 13

Steve MacMillan, CEO of Hologic.

Adam Jeffery | CNBC

Hologic makes diagnostic equipment and surgical products that’s geared toward women’s health.

CEO Stephen MacMillan told Cramer that Hologic has done more for women’s health, particularly breast and cervical cancer, than any of its competitors. Women’s Health Week begins May 13.

“I think the biggest thing and one of the most visible things right now is certainly our 3D mammography,” MacMillan said. “We invented 3D mammograms launched first in the United States in 2011. Didn’t fully really take off until kind of the 2015-2016 time period, and today is in more than half the hospitals in all the country and, frankly, expanding very quickly around the country.”

The manufacturer on Wednesday reported a modest top- and bottom-line beat and gave a positive guidance, but the stock fell before recovering those losses. It closed Thursday up 12.77% this year.

Catch the full interview here

Cramer’s lightning round: Cirrus is an Apple supplier, but I wouldn’t buy here

In Cramer’s lightning round, the “Mad Money” host zips through his thoughts about callers’ stock picks of the day.

Wheaton Precious Metals Corp.: “You can own that. Just for the record: I prefer Barrick Gold. “

Holly Energy Partners LP: “You know what, something’s wrong with this thing at 10% yield. The other day I saw one of these companies that’s very similar that actually got blitzed. They cut the dividend. I am concerned. Let me do some work.”

Cirrus Logic Inc.: “I think the world of Apple. Cirrus is a supplier. I cannot bless buying it at this level. I can’t, as good a company I think it is. “

Disclosure: Cramer’s charitable trust owns shares of Apple and Amazon.

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