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Even after the fall of the market on Tuesday, Jim Cramer told his Crazy money viewers that he still worries for Friday – when the stock market could receive a punch in one shot that could send him plummeting.
This first boost will result in increased tariffs on Chinese products, Cramer said. The market desperately wants to end the ongoing trade war, but President Trump apparently has other ideas. China has been breaking trade rules for decades. Cramer said our economy is certainly strong enough to withstand this shock, but not if it is combined with what is likely to happen.
This second punch in the face will be the IPO of Uber. Cramer said he feared that Uber's offer would follow the same pattern as his rival Lyft (LYFT) and his attack on the fly, before eventually collapsing. He hoped that Morgan Stanley (MS – Get Report) would have learned the Lyft lesson and would have many actions to keep the prices low for an open order and a successful first day where no one was hurt.
So, while it may be a good time to confront China about trade and a big day for a new IPO, Cramer said that these two events together could be catastrophic for the future. Friday session. That's why he continues to urge viewers to take profits, keep their earnings and stay cautious.
On real money, Cramer has more analysis of Uber timing and trade war. Get more of his ideas with a free trial subscription to real money.
Look on the possibility of buying
The Tuesday sale was a man-made event, Cramer told viewers, which means that a man-made buying opportunity could be imminent. Cramer said that normally, after a sale like today, he would begin by recommending investors to buy stocks of consumer products, or perhaps some health insurers or national retailers. But this sale could be different. Indeed, an increase in rates could affect our economy, including the domestic retail market. And the IPO of Uber could bring down the entire market.
According to Cramer, the technology and kings of cloud computing should probably be safe, but these groups will likely be a source of funds for financial managers who will buy the IPO of Uber. So, while it's too late to sell stocks at these levels, Cramer advised investors to keep their powder dry and wait for at least the end of tomorrow to see where the market was heading before take new positions.
Cramer and the AAP team reduced their overall exposure to the escalating trade war by selling a few weaker stocks that were expecting economic growth to accelerate in the second half of 2019. Find out what's going on. they tell members of their investment clubs and participate in the conversation with a free trial subscription at Action Alerts Plus.
Uber has a timing problem
Cramer has publicly stated that the upcoming IPO of Uber could be problematic for the stock market, but what about for Uber shareholders? Uber will be the third largest IPO ever, just behind Alibaba (BABA – Get Report) and Facebook (FB – Get Report). Rumors say that there is a strong demand for the transaction, which should be at the top of the expected price range.
On the surface, said Cramer, Uber is a compelling company. It operates in 700 metropolitan areas spread over six continents and makes 14 million trips a day. Add to that Uber Eats for food delivery and Uber Freight for logistics and there is a fascinating story to tell. But as with all IPOs, Cramer said it all boiled down to numbers.
Last year, Uber had a 42% growth in sales – growth that began to decelerate dramatically this year, when the law of large numbers was finally adopted. The company's gross margins are also decreasing, further separating Uber from its profitability. The hope has always been that Uber would come in and dominate an area at a low price, then increase them to become profitable. But with competition from Lyft and dozens of competitors in food delivery and logistics, these expected price increases may never happen.
Cramer said that he liked Uber for the company and its services, but that he would not be an Uber stock buyer.
Executive Decision: Teledoc Health
For his "Executive Decision" segment, Cramer met Jason Gorevic, CEO of Teledoc Health (TDOC – Get Report), the telemedicine provider with shares up 24% for the year.
Gorevic said Teledoc's business was continuing to accelerate. The company was founded in 2002 and it was not until 2015 that the company made one million consultations. It took only two years for the company to perform one million sessions in one year. Last year, she took this step in one quarter. When asked if they could continue to grow, Gorevic said that they regularly tested their capacity up to 10 times their peak volume.
Virtual care is becoming widespread, Gorevic added. He said that 20 million people will soon have access to virtual care via Medicare Advantage and that other insurance providers are testing and adding virtual care to their plans.
Mental health is one area in which virtual care really shines. Gorevic noted that half of mental health patients never receive the care they need, largely because of the stigma associated with consulting a provider. Virtual care helps to alleviate these concerns by allowing patients to interact with a provider when and where they need it.
Executive Decision: 1-800-Flowers
In his second segment "Executive Decision", Cramer met Chris McCann, President and CEO of 1-800-Flowers (FLWS – Get Report), to discuss the company's delivery of flowers and gifts to the approach of Mother's Day. The stock of 1-800-Flowers has increased by 67% since the beginning of the year.
McCann said his company allowed for more human expression, connection and celebration in all life occasions. While Mother's Day may be a priority, he said, daily donations for birthdays, sinks and sympathy are also important assets for their business.
McCann recalled that his company started operating as a unique flower shop in New York City in 1976 and now offers services to customers around the world through technology, with a focus on customer and personalization. .
1-800-Flowers also innovates with new technologies, such as virtual assistants and artificial intelligence, to make the gift experience even more enjoyable for its customers.
Lightning Tower
In the Lightning Round, Cramer was optimistic about Starbucks (SBUX – Get Report), DexCom (DXCM – Get Report), HealthEquity (HQY – Get Report), Canopy Growth (CGC – Get Report), CVS Health (CVS – Get the report) and Timken (TKR – Get the report).
Cramer was bearish on Turning Point Brands (TPB – Get the Report) and Tilray (TLRY).
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