The stock market is changing, says Jim Cramer. And investors need to change, too.
"The bull is dead, long live the bull," Jim Cramer shouted to his Mad Money viewers Thursday. The stock market is pivoting, he said, and you need to pivot with it, whether you like it or not.
The lesson of this stock market is simple. When the Federal Reserve is aggressively raising rates, two things are true. First, whatever has been working, isn't going to work anymore. Second, everything that hasn't been working just got a new lease on life.
Case in point, Amazon (AMZN) – Get Amazon.com, Inc. Report, the tech bellwether that's down 5% for the year, despite still posting great earnings. You can learn a lot about a stock by what happens after it reports. If the numbers are great, but investors just don't care, that's a problem for a $1.6 trillion company.
Compare that to stocks like Eli Lilly (LLY) – Get Eli Lilly and Company Report or Conagra Brands (CAG) – Get Conagra Brands, Inc. Report or Church & Dwight (CHD) – Get Church & Dwight Co., Inc. Report. These are all recession-proof names, and the market is eating them up, even if the earnings aren't that spectacular.
There were only two tech names that Cramer felt were worth considering, Alphabet (GOOGL) – Get Alphabet Inc. Class A Report and Meta (FB) – Get Meta Platforms Inc. Class A Report. Businesses depend on Google in good times and in bad, he said, and as for Meta, nobody knows how to copy the best features from everyone as well as Facebook.
So while you may still want to hold onto those formerly red-hot tech names, do yourself a favor, go buy some Target (TGT) – Get Target Corporation Report, which was up 5.6% today, proving once again why it's an essential retailer.
In his first "Executive Decision" segment, Cramer sat down with Cory Barry, CEO of Best Buy (BBY) – Get Best Buy Co., Inc. Report, the electronics retailer with shares that trade for just 10 times earnings.
Barry said that Best Buy's purpose is to enrich the lives of their customers through technology. That's not just a tagline, she added. Every Best Buy associate wants to help their customers accomplish things using technology.
Best Buy has low employee turnover, a fact that Barry credited to competitive pay, comprehensive benefits and career paths for every associate. "Your work has to matter," she said.
When asked about continued growth, Barry explained that the pandemic has created some permanent consumer behaviors. People are spending more time at home. They're streaming more content, playing more games and cooking a lot more at home.
The future of work is hybrid, Barry added. That means that not only do you need a setup at home and at the office, those setups need to work together and need to constantly be upgraded with new technology as it arrives.
Barry touted Best Buy's new "Total Tech" membership, which provides tech support for all of the gadgets in your home, and added benefits for those purchased at Best Buy, all for just $199 a year.
Best Buy is also taking aim at the health tech industry. With so many connected devices from fitness trackers to hearing aids to blood pressure monitors and at-home EKGs, people need help ensuring their loved ones are able to live at home as long as possible.
With The Masters golf tournament getting underway in Augusta, Georgia this week, the world is buzzing about golf again. But with the cost of metals, plastics and resin soaring and the number of rounds of golf being played on the rise, is it worth owning Acushnet Holdings (GOLF) – Get Acushnet Holdings Corp. Report or Callaway Golf (ELY) – Get Callaway Golf Company Report?
Cramer said Acushnet has been a great company, but when it last reported, it saw a wider-than-expected loss. And while the company maintained its forecasts, it also cautioned of additional headwinds ahead. Despite that, Cramer said he's still bullish on Acushnet on the strength of their brands like Titleist and FootJoy.
Callaway is a complicated story. The company used to be simple, Cramer said, but after making several acquisitions, including Top Golf, an experiential golf experience, the story at Callaway is now much harder to understand and not right for this market. Shares of Callaway trade for 34 times earnings.
In his second "Executive Decision" segment, Cramer also spoke with Sean Connolly, president and CEO of Conagra Brands (CAG) – Get Conagra Brands, Inc. Report.
While inflation has been much higher than expected, Connolly said the fundamentals at Conagra remain strong and the innovation in its brands is resonating with consumers. Younger consumers especially are spending more time at home and they're seeing the value in cooking at home. That's why Conagra's meals and snacks are in such high demand.
As for inflation, Connolly admitted that not only is inflation higher than its initial forecasts, it's higher than he's ever seen. "All we can do is react," he said, and hope that there is some relief in the future.
In the Lightning Round, Cramer was only bullish on Hertz Global Holdings (HTZ) – Get Hertz Global Holdings Inc Report. He was bearish on A.C. Moore Arts & Crafts (ACMR) – Get ACM Research, Inc. Class A Report and UiPath (PATH) – Get UiPath Inc Class A Report.
In his "No Huddle Offense" segment, Cramer opined on Warren Buffett's 11% stake in HP (HPQ) – Get HP Inc. Report. He said in hindsight, it's easy to see why Buffett fell in love with HP. The company generates a lot of cash, it pays a great dividend and it's buying back its own shares. Most of all, HP represents value, trading at just eight times earnings.
Cramer admitted candidly that he'd turned bearish on HP, following in the footsteps of analysts who felt that once remote workers had equipped their home offices, demand would fall. But as we heard earlier from Best Buy, consumers are always upgrading to the latest technology.
Buffett is right, Cramer concluded, HP is a great investment.
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Scott Rutt is a veteran staff writer at TheStreet, having covered Jim Cramer and Mad Money for over 14 years.
Cramer's Mad Money Recap 4/7: Amazon, Google, Target – TheStreet