Cramer Remix: Investors have my blessing to get a taste of Smucker
CNBC's Jim Cramer has been waiting for the stock of JM Smucker (NYSE: SJM) to find a bottom for months, and though it looks like it finally has, he wasn't too eager. "Here's the problem: this is not Smucker's first attempted comeback since the stock's sickening decline began over a year ago," the " Mad Money " host said. "We've seen this thing try to turn around before, and every time, the rebound has fizzled and the stock has ended up going still lower." But Cramer acknowledged that this time could be different. For one, this comeback has lasted longer than Smucker's other comebacks; the stock is now up almost 19 percent from its November lows.Better yet, shares of Smucker are trading at only 15 times next year's earnings estimates, fairly cheap, and Wall Street has started warming up to consumer foods stocks again as food deflation abates.Still, "one good quarter does not necessarily make a turnaround," Cramer said. "I'd like to see a second strong quarter in a row … before I recommend Smucker wholeheartedly. But if you want to dip your toe in and start a small position right here, I'm going to give you my blessing. You know why? Because in the end, this is a very high-quality company run by a family that has historically generated better returns than the others in its sector."Closing in on euphoria After the Federal Reserve raised interest rates on Wednesday, Cramer wanted investors to get a feel for the state of the U.S. economy. "Higher rates can kill the bull if they make bonds competitive with the return you get from stocks. We aren't there yet," he said. "A quarter-point rate hike from these very low levels won't really do much damage to either the economy or the stock market."Cramer used a quote from the late legendary investor , Sir John Templeton, to explain the current state of affairs: "Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria." "We're currently in stage three. We're in optimism," Cramer said. "We're optimistic about 2018. We're optimistic that the Fed won't kill the economy, optimistic that inflation's under control, optimistic that more jobs will be created, augmented by the tax bill, and I'm optimistic that stocks can keep running."Just Capital's Dan Hesse on top traits of leading companies Companies that enforce employee-centric and customer-centric cultures are likely to see better financial gains than their competitors, Just Capital's Dan Hesse told CNBC . "What we've seen from a financial performance point of view is that you have about a 33 percent higher return on equity of these companies that do good things," Hesse, the former CEO of Sprint (NYSE: S) , told Cramer on Wednesday. Just Capital, a private, non-profit research firm, recently conducted a survey of 72,000 individuals across the United States to hear about what they wanted to see from the nation's top companies. On Tuesday, Just Capital and Forbes released a ranking of the top 100 most "just" U.S. companies based on the results. Disney-Fox and the need for scale Walt Disney's (NYSE: DIS) widely anticipated deal to buy Twenty-First Century Fox's (NASDAQ: FOXA) entertainment assets reminded Cramer of his experience founding TheStreet.com. "Scale. Gotta have scale. I remember when I first heard that term, "scale." It was when I started TheStreet.com 22 years ago. I would meet with bankers, of course begging for money, and they'd say, 'Jim, you aren't scaling fast enough,'" the "Mad Money" host recalled.Being large enough to compete with major industry players is a requirement for any company that wants to secure funding and get ahead, as Cramer later found out. "If you aren't dominant, then you won't win, or worse, you might not even survive," he said.Manitowoc and Welbilt: The textbook breakupFinally, Cramer reviewed a recent corporate break-up that he saw as the perfect example of using a split to unlock shareholder value and re-focus the fragmented parts of a company. In March 2016, Manitowoc (NYSE: MTW) , a manufacturer of cranes used in construction projects, spun off its food service equipment business into a separate company called Welbilt (: MFS) . "This was a textbook example of a company that actually deserved to be broken up. In fact, I recommended they should break themselves up in Get Rich Carefully, my last book," he said. "There's no universe where cranes and kitchen equipment belong under the same roof. I mean, no one ever walked into Manitowoc's sales office and said, 'You know what? I need some heavy lifting machinery for a new construction project, oh and I'll also take a Frymaster.'" Sure enough, since the breakup, Manitowoc's stock has run 145 percent and Welbilt's stock has seen a 64 percent gain. Investors who held on to both parts got an 83 percent composite gain, well above the S&P 500's (INDEX: .SPX) 34 percent run over the same time period. "Like I've been saying all along, companies have their own unique characteristics and the decisions made by management actually matter," Cramer said. "With the stroke of a pen, management broke up the old business and gave investors two smaller, much more appealing companies. I say three cheers for Manitowoc. And sometimes, it really is that easy."Lightning Round: Semi surplus In Cramer's lightning round , he zipped through his take on some callers' favorite stocks: Applied Materials, Inc. (NASDAQ: AMAT) : "I like Applied Materials. I've got to tell you that the charitable trust, we debated it, but we already have so many semiconductors. But it is good." Okta Inc. (NASDAQ: OKTA) : "We just had Sanjay Poonen on last night for VMware (NYSE: VMW) . We're not going to Okta, we're going to VM." Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram - VineQuestions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com CNBC's Jim Cramer has been waiting for the stock of JM Smucker (NYSE: SJM) to find a bottom for months, and though it looks like it finally has, he wasn't too eager. "Here's the problem: this is not Smucker's first attempted comeback since the stock's sickening decline began over a year ago," the " Mad Money " host said. "We've seen this thing try to turn around before, and every time, the rebound has fizzled and the stock has ended up going still lower." But Cramer acknowledged that this time could be different. For one, this comeback has lasted longer than Smucker's other comebacks; the stock is now up almost 19 percent from its November lows. Better yet, shares of Smucker are trading at only 15 times next year's earnings estimates, fairly cheap, and Wall Street has started warming up to consumer foods stocks again as food deflation abates. Still, "one good quarter does not necessarily make a turnaround," Cramer said. "I'd like to see a second strong quarter in a row … before I recommend Smucker wholeheartedly. But if you want to dip your toe in and start a small position right here, I'm going to give you my blessing. You know why? Because in the end, this is a very high-quality company run by a family that has historically generated better returns than the others in its sector." Closing in on euphoria After the Federal Reserve raised interest rates on Wednesday, Cramer wanted investors to get a feel for the state of the U.S. economy. "Higher rates can kill the bull if they make bonds competitive with the return you get from stocks. We aren't there yet," he said. "A quarter-point rate hike from these very low levels won't really do much damage to either the economy or the stock market." Cramer used a quote from the late legendary investor , Sir John Templeton, to explain the current state of affairs: "Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria." "We're currently in stage three. We're in optimism," Cramer said. "We're optimistic about 2018. We're optimistic that the Fed won't kill the economy, optimistic that inflation's under control, optimistic that more jobs will be created, augmented by the tax bill, and I'm optimistic that stocks can keep running." Just Capital's Dan Hesse on top traits of leading companies Companies that enforce employee-centric and customer-centric cultures are likely to see better financial gains than their competitors, Just Capital's Dan Hesse told CNBC . "What we've seen from a financial performance point of view is that you have about a 33 percent higher return on equity of these companies that do good things," Hesse, the former CEO of Sprint (NYSE: S) , told Cramer on Wednesday. Just Capital, a private, non-profit research firm, recently conducted a survey of 72,000 individuals across the United States to hear about what they wanted to see from the nation's top companies. On Tuesday, Just Capital and Forbes released a ranking of the top 100 most "just" U.S. companies based on the results. Disney-Fox and the need for scale Walt Disney's (NYSE: DIS) widely anticipated deal to buy Twenty-First Century Fox's (NASDAQ: FOXA) entertainment assets reminded Cramer of his experience founding TheStreet.com. "Scale. Gotta have scale. I remember when I first heard that term, "scale." It was when I started TheStreet.com 22 years ago. I would meet with bankers, of course begging for money, and they'd say, 'Jim, you aren't scaling fast enough,'" the "Mad Money" host recalled. Being large enough to compete with major industry players is a requirement for any company that wants to secure funding and get ahead, as Cramer later found out. "If you aren't dominant, then you won't win, or worse, you might not even survive," he said. Manitowoc and Welbilt: The textbook breakup Finally, Cramer reviewed a recent corporate break-up that he saw as the perfect example of using a split to unlock shareholder value and re-focus the fragmented parts of a company. In March 2016, Manitowoc (NYSE: MTW) , a manufacturer of cranes used in construction projects, spun off its food service equipment business into a separate company called Welbilt (: MFS) . "This was a textbook example of a company that actually deserved to be broken up. In fact, I recommended they should break themselves up in Get Rich Carefully, my last book," he said. "There's no universe where cranes and kitchen equipment belong under the same roof. I mean, no one ever walked into Manitowoc's sales office and said, 'You know what? I need some heavy lifting machinery for a new construction project, oh and I'll also take a Frymaster.'" Sure enough, since the breakup, Manitowoc's stock has run 145 percent and Welbilt's stock has seen a 64 percent gain. Investors who held on to both parts got an 83 percent composite gain, well above the S&P 500's (INDEX: .SPX) 34 percent run over the same time period. "Like I've been saying all along, companies have their own unique characteristics and the decisions made by management actually matter," Cramer said. "With the stroke of a pen, management broke up the old business and gave investors two smaller, much more appealing companies. I say three cheers for Manitowoc. And sometimes, it really is that easy." Lightning Round: Semi surplus In Cramer's lightning round , he zipped through his take on some callers' favorite stocks: Applied Materials, Inc. (NASDAQ: AMAT) : "I like Applied Materials. I've got to tell you that the charitable trust, we debated it, but we already have so many semiconductors. But it is good." Okta Inc. (NASDAQ: OKTA) : "We just had Sanjay Poonen on last night for VMware (NYSE: VMW) . We're not going to Okta, we're going to VM." Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram - Vine Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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