Despite the high level of confidence and certainty among investors, there are still plenty of things in flux in this market, Jim Cramer cautioned his Mad Money viewers Wednesday. Investors seem certain about a lot of things, Cramer said, but they might be a little premature in their confidence.
The coronavirus in China may have plateaued, but we really don't know for sure, Cramer explained. We also don't know if things will get worse around the world before they get better. But, he added, he won't argue with this rally.
While the coronavirus isn't nearly as deadly as the seasonal flu -- which has already claimed the lives of over 12,000 people in the U.S. since the start of the season on Oct. 1 -- it has the ability to affect the earnings of many companies.
Our election is also still in flux, Cramer said. Last night's win in New Hampshire for Bernie Sanders has made many on Wall Street certain that President Trump will win in November, which would be great for stocks. But Sanders isn't the Democratic nominee yet, Cramer warned, and investors are jumping the gun to think otherwise.
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Executive Decision: Shopify
For his "Executive Decision" segment, Cramer sat down with Harley Finkelstein, COO of Shopify (SHOP) - Get Report, the e-commerce enabler with shares that closed up 7.8% on another strong quarter. Shares of Shopify are up 203% over the past year.
Finkelstein said that Shopify empowers entrepreneurs by removing all of the barriers to success, including e-commerce, shipping, logistics, point of sale, fulfillment and more. The company currently has over one million merchants on its platform.
Finkelstein added that it's not just small businesses that use Shopify, established brands do as well. The company is also gaining momentum outside of the U.S. Nearly 29% of Shopify's merchants are outside the U.S.
Shopify is arming the rebels and the rebels are winning, Finkelstein said, when asked about the e-commerce landscape. There's a lot to buy online than you won't find on Amazon (AMZN) - Get Report. Shopify forecasts that 2020 will be an investment year for the company, and Finkelstein said that's to help them grow even more, especially internationally.
Executive Decision: Signet Jewelers
Drosos said that transformations take time to complete and Signet continues on its initiative to cut costs and bring customers back to the center of its operations.
On the cost-cutting front, Drosos said Signet continues to save money so it can invest and grow. She's been working hard to strengthen the balance sheet, protect the dividend and reduce inventory to improve free cash flow.
Signet has been introducing new products that really resonate with customers, Drosos explained. Signet's many brands offer jewelry for people who love jewelry. They also promote diversity and inclusivity in their brands and advertising as well as in their diverse team members.
When asked about the outlook for the mall, Drosos said that in some cases, Signet is moving their stores out of c-level malls and into off-mall locations. But, she added, there's still plenty of growth ahead for top-tier mall locations.
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Bears and the Goose
With warm weather impacting the earnings of winter apparel makers like Columbia Sportwear (COLM) - Get Report, what should investors make of Canada Goose (GOOS) - Get Report? Shares fell 4% after the company last reported, but the analysts remain divided. On February 10, both Cowen and Goldman Sachs downgrades shares of Canada Goose, but an analyst at Baird did the opposite and upgraded the company.
The bears argue that growth at Canada Goose is continuing to slow. The company has put its expansion plans in China on hold and it's experiencing weaker sales all over the world, including its namesake Canada.
But the bulls at Baird noted that while Canada Goose cut its forecasts by 20% this quarter, shares only fell by 4%, indicating that the bad news might finally be baked into the stock.
Cramer said he's siding with the bears on Canada Goose. The company had a lackluster 2019 and is now seeing major headwinds in 2020 as well. There's simply no reason to stick your neck out for a stock that still trades at a hefty 24 times earnings.
Bad IPO Dreams
In his "No-Huddle Offense" segment, Cramer said investors owe a debt of gratitude to Casper Sleep, the failed IPO that has saved us all from what would have been a flood of similar sub-standard deals.
The IPO market has all but dried up thanks to Casper, Cramer said, and with so many mergers and acquisitions taking supply out of the market, stocks are going higher.
The Casper deal was surreal in its horribleness, he said, as underwriters attempted to bring the company public at $17 a share, only to slash the deal to between $12 and $13 before ultimately coming public at $12. It's been all downhill from there.
Had the Casper IPO worked, Cramer said, it would have spurred a flood of other bad deals that would have gutted the market rally. Fortunately, when underwriters and companies get this greedy, we all can benefit. Casper is not a disruptive new technology, it's simply a failed IPO in a category littered with failures.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Wednesday evening:
Virgin Galactic (SPCE) : "I say, do not touch it."
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At the time of publication, Cramer's Action Alerts PLUS had a position in AMZN.