Cramer Remix: Why Michael Avenatti signaled the bottom for Nike

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CNBC’s Jim Cramer on Monday briefly commented on celebrity lawyer Michael Avenatti’s recent legal woes and how it relates to Nike’s stock.

Avenatti was arrested in New York City for an alleged attempt to extort as much as $25 million out of Nike. In an apparent move to take down the sports apparel giant, he tweeted Monday afternoon that he planned to expose a high school and college basketball scandal “perpetrated by” the company.

“Stock briefly got hit, and then rallied, which, to me, said it’s the bottom,” Cramer said while shrugging off the news.

Avenatti is most recognizable for his past representation of porn star Stormy Daniels in matters that involved President Donald Trump and his ex-lawyer Michael Cohen.

Shares of Nike hit a floor of $80.89 during the session before rallying back 1.78 percent to close in the black.

Apple‘s stock dropped during the trading session because its batch of new products failed to impress the folks on Wall Street, Cramer said.

“As I predicted, when the world’s largest company announced a whole slate of new products and services today, the stock got hammered and that weakness reverberated throughout the market,” the host said.

The Dow Jones Industrial Average was down for much of the day before adding about 14 points during the session. The S&P 500 and Nasdaq both slipped less than 0.1 percent.

“The stock rolled over because these are all, I guess, pedestrian applications,” he added.

In a star-studded presentation, the tech giant revealed new services including its much-anticipated Apple TV+ streaming platform, Apple News+ package, Apple Card credit card, and Apple Arcade gaming bundle. Cramer estimated that these subscriptions could save consumers about $100 a month.

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Pegasystems, a 35-year-old software maker, has saw its stock rally more than 250 percent in the past five years after transitioning into cloud services, Cramer said. The host recognized that the company’s business process management is far ahead of the competition, but noted that many people aren’t aware of the firm.

CEO Alan Trefler told Cramer that’s about to change.

“I think therein lies the opportunity. For a lot of years we were very, very targeted in terms of who we offered our product to. We weren’t very aggressive from a marketing point of view,” he said. “We didn’t have close to the number of feet on the street that you need to really engage organizations deeply. We are massively changing that.”

See the interview in full here

Cramer said investors should buy on the pullback in Nike coming off of its latest earnings report.

The stock plummeted more than 6 percent on Friday after Nike reported weaker-than-expected sales growth in North America, but Cramer said he likes where the company is positioned. Despite the blip in overall sales, he noted footwear saw a 9 percent increase in North America, while footwear and apparel sales grew 20 percent in China.

“Nike only pulled back on Friday because its stock had run up dramatically going into the quarter,” the “Mad Money” host said. “But the results were great. I’m telling you they were great. I’m betting the guidance was a classic example of UPOD (under promise, over deliver), which means Nike is a buy tomorrow morning, right here.”

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China has been buying up a lot of equipment to develop biotechnology products, and many investors are wondering if the United States can keep up with the amount of spending they are doing, Cramer said.

Thermo Fisher Scientific, a major genetic testing and precision laboratory equipment company, CEO Marc Casper assured the host that American companies, with an assist from the National Institutes of Health, is a “gem” in the industry.

“In terms of where the breakthrough science is coming today, it’s coming from the U.S.,” he said in a one-on-one interview with Cramer. “Really, what you’re seeing the application of these technologies in China is to bring up the standard of living in society in China, and you’re seeing it for reducing pollution, improving food safety, you know, expanding basic health care to the population.”

Catch the full interview here

Darden Restaurants‘ “stellar quarter” of strong sales growth is one of the signs that the U.S. economy is far from a recession, Cramer said.

Cramer praised CEO Gene Lee, saying he “has a terrific grasp of what’s going on in the restaurant industry” to bring more guests into its thousands of its eateries across the country. The restaurant operator, which owns casual dining chains such as Olive Garden, Longhorn Steakhouse, and Bahama Breeze, bested Wall Street expectations in its Thursday earnings report and raised its forecast for 2019.

Darden did not attribute the higher sales and outlook to last year’s tax cuts, Cramer pointed out.

“Sometimes the big picture stuff is irrelevant and it all comes down to a better bowl of pasta,” said the “Mad Money” host. He said commentators love discussing macroeconomics and generalizing individual stocks, but “rather than focusing on these aggregate data points, I prefer following the largest companies and just listening to what they have to say.”

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In Cramer’s lightning round, he ran through his reactions to callers’ stock questions:

Moderna Inc.: “I like your choice. They’re going to be hard pressed to be independent. That’s how good their technology is.”

Nielsen Holdings PLC: “I’m kind of concerned. They got a 5 percent yield, but their business is very, very let’s just say tentative, so I’m not going to be [attracted] by that yield.”

Realty Income Corp.: “You know what, they’re on fire. They’re a good REIT (real estate investment trust), and they’ve been able to handle this period well and they also do benefit from the decline in the interest that you get for treasuries.”

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

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