“Disney’s stock has been running like crazy going into tomorrow’s quarter and you simply don’t see this kind of move unless big institutional money managers are anticipating a blockbuster forecast,” the “Mad Money” host said. “Just as important, buyers are forgiving Disney for having to pay so much for the Fox business, and they’re forgetting that ESPN’s been experiencing big declines.”
Cramer listed Disney among a group of stocks that have been getting love from investors after being hated for past missteps. He also named Facebook, T-Mobile, Henry Schein and Chipotle as companies that the market has decided to forgive and forget, but cautioned investors to make sure that their optimism is sustainable.
PepsiCo CEO Indra Nooyi announced on Monday that she was stepping down, following a 12-year run as CEO and 24 years with the company. President Ramon Laguarta will take over the role in October.
Since Nooyi became CFO in 2000, the stock has increased 411 percent, having a higher return than both the consumer staples group and the S&P 500 overall. Dividends have tripled since she became CEO in 2006, and the number of billion-dollar brands within the company grew from 17 to 22.
CNBC’s Jim Cramer recounted one of his first interactions with Nooyi over a decade ago. He lamented the future of PepsiCo’s products after noticing that the snacks weren’t popular with his daughter and her friends.
“I had thrown a sleepover party for my daughter’s swim team. I had stocked baskets all over the house with Doritos and Cheetos and Lay’s potato chips, and the kids studiously avoided them. I was shocked,” he said. “I realized that these kids represented the future and the future looked grim for these kinds of unhealthy snacks.”
After the segment aired, Nooyi called the “Mad Money” host to dispute his comments. Not long after, Cramer visited PepsiCo’s factory in Aberdeen and had a change of perspective.
Expedia reported second-quarter earnings in July that beat analysts’ expectations and caused the stock to skyrocket. However, CNBC’s Jim Cramer explained that the outlook hasn’t always been so rosy for the digital travel company, which deals with everything from hotels to cruises to rental cars.
Last August, the company lost CEO Dara Khosrowshahi to Uber in the midst of an intense hurricane season that impacted the entire travel industry.
Then, in October, in its first quarterly report without Khosrowshahi as CEO, Expedia reported a 22 percent increase in selling and marketing expenses that outpaced its 15 percent revenue growth, which was stunted due to increased competition from Priceline, the largest player in the industry.
“Wall Street sometimes gets overzealous in punishing growth companies for necessary spending. But that’s not a good look when you’re also reporting revenue shortfalls,” Cramer said.
Despite low volatility in the bond markets, electronic trading platform MarketAxess is betting on a growing shift from phone to electronic trading to bolster its business.
“If you look over the last 10 years, there has been a consistent movement, year in and year out, of investors trading more electronically and moving business away from the phone,” CEO Rick McVey told Jim Cramer in an interview. “We see the same thing this year, whether it’s high-grade, high-yield, emerging markets or euros, market share electronically continues to move up.”
McVey is also looking towards the Federal Reserve and its monetary policy decisions to drive more trading volume on the company’s platform.
“The one thing that I’m watching closely is the end of quantitative easing,” McVey said, referring to the Federal Reserve’s practice of buying financial assets to increase the money supply and stimulate the economy. “The ride is going to be a little bumpy when that ends.”
In Cramer’s lightning round, he shared his take on callers’ favorite stocks:
Philip Morris International: I tell you, I’m worried about all of these different things that have to do with alternative cigarettes, and that’s why I have walked away from the group. Plus I’ve got to tell you: I can no longer in good conscience recommend a cigarette stock. I just can’t. Let someone else do it. It’s not about money when it comes to them.”
OPKO Health: “Look, it’s at five bucks, up from three. Ever since they bought Bio-Reference Lab, it’s been a dog. Sorry, Dr. Phillip Frost, you better come on and explain why we should buy OPKO Health.”
U.S. Steel: “No, I don’t like steel. Letter X, that’s what we call it. I do like Nucor, but I have to tell you that all of the steel stocks are going down with the belief that the economy is slower and therefore they won’t do well, because of autos and because of infrastructure. I have to admit, I’m willing to take the seeds that is Nucor but I couldn’t take the pain that is Letter X.”
Before Wall Street found out that diagnostics company Theranos was a fraud, PerkinElmer had its own questions about the company, PerkinElmer CEO Robert Friel told CNBC’s Jim Cramer.
“We spent a lot of time, first of all, trying to find any kind of scientific, technical knowledge about the company,” Friel said. “Very hard. We sort of concluded that we didn’t understand it, and since we didn’t understand it, we stayed away fortunately. As we’re finding out now, there wasn’t much substance behind it.”
Its decision to stay away has not hurt the the company, which manufacturers life science and diagnostics equipment. PerkinElmer’s stock is up almost 20 percent year-to-date after reporting strong second-quarter earnings results.
Friel said that its latest results show that its two divisions work well together, even though the market a few years ago thought that the best way to create value was to split up the company.
Disclosure: Cramer’s charitable trust owns shares of PepsiCo, Facebook and Nucor.
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Originally published at CNBC