Investors shouldn’t wait for “ironclad proof” that business is improving at Micron, Nvidia and Lam Research before they buy the semiconductor companies’ stocks, CNBC’s Jim Cramer said Wednesday as stocks inched higher.
“If you wait for ironclad proof that a troubled business has turned itself around, you’ll miss most of the upside from that turn,” he said on “Mad Money” after all three chip stocks surged. “The next time stocks drop, I need you to think about this group. It’s bottomed, and the rally? It’s just beginning.”
In Wednesday’s session, Micron climbed 5.04 percent, Nvidia rose 1.97 percent and Lam Research gained 5.16 percent. While the semiconductor industry has been under pressure in recent months due to supply-demand imbalances, the rallies encouraged Cramer that the worst could soon be over.
“This rally is about a turn in the second half,” he said. “If you believe the trade war will simmer down, if you believe Fed Chief Jay Powell will hold off on raising interest rates — that he’ll make decisions based on the actual data like he told us last week — then the worldwide economic expansion can restart, and basic building blocks like Micron’s chips can make a comeback in pricing.”
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Constellation Brands’ share drop after earnings was a “total overreaction” that made the stock “an absolutely fantastic value,” CEO Rob Sands told Cramer after the company’s fiscal third-quarter report.
The 12.42 percent plunge, which brought the alcohol distributor’s shares to a new 52-week low, made the stock so enticing that Sands and his brother, Richard Sands — who serves as Constellation’s chairman of the board — bought the stock themselves, the CEO said Wednesday on “Mad Money.”
Calling the stock “way oversold,” Sands told Cramer that he and his brother acquired 1.1 million shares of Constellation “in the last week or so.” At Wednesday’s closing price, 1.1 million shares of Constellation was worth $166,034,000.
In a joint interview with his successor Bill Newlands, who will take over as CEO in March, Sands also described what he thought was the particular cause of Wall Street’s negative reaction.
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Apple’s stock won’t get out of its funk until the iPhone business picks up steam or the company’s growing ecosystem of services really takes off, Cramer said Wednesday.
Cramer was referencing what he calls Apple’s burgeoning razor-razorblade model, in which consumers buy its devices (the razors) and then consistently use the company’s many services, including iCloud and Apple Music (the blades).
“That’s why I expect Apple’s stock will stay mired at this level, either until the phone biz picks up again or the service biz grows to the point where it can no longer be ignored,” he said.
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Canadian cannabis producer Canopy Growth is on track to disrupt traditional medications for sleep and pain, the company’s founder, Chairman and CEO Bruce Linton told Cramer in a Wednesday interview.
“If we can work on that, it’s a huge segment,” Linton said, fresh off his company’s first-ever invitation to J.P. Morgan’s Healthcare Conference, a notable validation for marijuana company.
“Look at the incumbent products: nobody’s running around saying ‘I love Ambien,'” Linton said. “And so the opportunity is to disrupt an existing business with a large cohort of people who all have the wealth to pay, and what they can’t get is a good sleep.”
Canopy is also laser-focused on offering alternatives to opioids, Linton said, citing a $2.5 million study the company is funding to figure out how to wean people off addictive pain medications.
“If you or I were going to go off and get hip surgery, I think I would only want a cannabis-based first line. Don’t put me on the heavy stuff,” he told Cramer. “But if you’re going to go on the heavy stuff, why don’t alkaloids, which create opioids, become friends with cannabinoids, so that maybe I can give you a concoction that results in having lower anxiety, so you don’t think about the pain, and extended duration.”
Click here to watch his full interview.
Glucose monitor maker Dexcom has taken a “prime position” in its industry thanks to its technology, CEO Kevin Sayer told Cramer on Wednesday.
With the company’s new monitor, the Dexcom G6, diabetes patients can now forego the dreaded “finger prick” when measuring their glucose levels, the CEO said.
“You can rely on the technology, and other technologies have not achieved that goal,’ he said. “We have the prime position with respect to sensor performance in this market.”
The tech could — and, in Sayer’s opinion, should — eventually “be part of every physical,” the CEO said.
Click here to watch his full interview.
In Cramer’s lightning round, he tore through his responses to callers’ stock questions:
CBS Corp.: “I like CBS, but let me throw you a little curveball here: I think the better buy is Viacom, which has come down a lot and [CEO] Bob Bakish had some good things to say. Viacom [has a] 2.76 percent yield and down at $29, that’s the one to buy.”
Boyd Gaming Corp.: “Buy, buy, buy! I like that stock. Now, why? Because I like gaming companies that are not levered to China, and Boyd Gaming certainly isn’t.”
Disclosure: Cramer’s charitable trust owns shares of Apple.
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