Cramer Remix: This rally could be ‘built to last’

On a very bullish day for the broader stock market, the declines in the retail sector were speaking volumes to CNBC’s Jim Cramer.

With the trade dispute between the United States and China heating up, the “Mad Money” host figured the weakness stemmed from “a belief that the retailers will have to eat the tariffs, meaning they can’t pass on all the price increases to consumers.”

“Not only that, but Amazon could always undercut any company that makes goods in China and sells them here,” he said on Thursday.

The retail stocks’ dip came after the United States and China exchanged tariffs on each other’s goods earlier this week. On Thursday, the Chinese commerce ministry said it hoped the United States would correct its behavior in the trade dispute.

But given how vocal leaders in the retail space have been about the unfavorable effects of tariffs on their businesses — and Amazon’s growing pricing power — Cramer wondered if they would take the brunt of the trade war’s negative effects.

“If the tariffs really were going to fall entirely on the heads of consumers, the retail stocks wouldn’t have had such a mess today,” he said. “Plus, we did just get a tax cut [that] more than makes up for the tariff figure every time I do the numbers.”

“Now, this may just be one big rotation out of growth into value, with people selling the expensive stocks and swapping into stocks that sell at a discount to the S&P 500,” Cramer continued. “But the bottom line is that’s a far more sustainable rally than the other way around. So if we can just tamp down the speculative stocks … and boost the value plays, then you know what? This move could be built to last.”

For more of Cramer’s analysis on the retail space, click here.

As shares of Canadian cannabis producer Tilray continued their wild bout of trading on Thursday, Cramer doubled down on his declaration that investors are getting carried away with their enthusiasm around pot stocks.

“This whole group has gotten too hot — no argument here,” he said. “Is it a bubble? Absolutely.”

“People are too excited right now,” Cramer continued. “It will end badly when the stock market gets flooded with cannabis stocks. I just don’t expect it to end quite yet.”

Tilray’s surge higher came after the company’s CEO, Brendan Kennedy, appeared on “Mad Money” on Tuesday. In the interview, Kennedy told Cramer that pharmaceutical and alcohol companies should invest in cannabis as a “hedge” against the inevitable rise of the industry. The CEO pegged the total addressable market for medical marijuana at around $150 billion.

Even so, “Tilray’s not the culprit here,” Cramer said on Thursday. “When I had CEO Brendan Kennedy on the show two nights ago and I used a $500 billion projection, … Kennedy didn’t endorse it.”

Get Cramer’s full take on the cannabis excitement — and how investors should approach it — by clicking here.

By taking a risk in 2014 and building a company around a single manmade cannabinoid, drugmaker Corbus Pharmaceuticals is now ahead of its larger peers on a number of key treatments, CEO Yuval Cohen said Thursday.

“We are a tiny company, very nimble, but because we took the risk a number of years ago — whereas big pharma, remember, they’re slower, they’re more risk-averse — we’re actually ahead of the pack,” Cohen told CNBC in an interview with Jim Cramer.

Though cannabis has largely been seen as taboo by big pharma until recently, some of the larger names are waking up to the medical benefits its derivatives can provide.

Cohen specifically referenced a 2017 deal by Johnson & Johnson subsidiary Janssen Pharmaceuticals with clinical-stage biopharmaceutical company Bird Rock Bio to explore targeting cannabinoid receptors in the liver to treat NASH, or non-alcoholic steatohepatitis. On Tuesday, Tilray CEO Brendan Kennedy told Cramer his cannabis producer struck a deal with a division of Novartis.

But Cohen took special care to distinguish Lenabasum, Corbus’ flagship cannabinoid, from the plant-derived treatments many companies are promoting in the heat of the cannabis craze.

To watch and read more about Cohen’s interview, click here.

With the excitement around Tilray spurring huge moves in various marijuana stocks, GrowForce CEO and MJardin Executive Chairman Rishi Gautam explained what he focuses on as someone in the business of managing marijuana companies.

“I take a step back and I look at, what are the actual companies with actual revenue, actual profits, actual substance? And that’s MJardin and that’s our sister company, GrowForce,” Gautam told Cramer in a Thursday interview. “We’re a business that’s built on the most experienced operating team that’s been in the legal cannabis space over the long haul, irrespective of stock charts and highs and lows. The substantive business will prevail.”

And Gautam’s companies, of which MJardin is a global asset manager and GrowForce is a Canada-based, brand-focused player, function well inside the rift created by the U.S. federal and state governments’ disagreement on pot legality.

“We want to be buyers and buy these businesses now given the fragmentation. We love the fragmentation. We love the irregularity between the federal and the state,” he told Cramer. “We have this small window right now to continue to acquire these flagship facilities until the federal side really reconciles with the states.”

To watch Gautam’s full interview, click here.

Finally, growth stocks might be trailing the broader market rally, but Cramer argued that their weakness was not enough of a reason to give up on them altogether.

“Earlier, you heard me say that value is in and J.P. Morgan may be the best buy,” the “Mad Money” host said. “But does that mean growth is out? That they can’t coexist? No, not at all.”

In fact, investors should take the dips in shares of Nvidia, the Walt Disney Company and Alphabet as opportunities to get behind the stocks, he said.

“Think before you sell the growth stocks,” Cramer recommended. “Plus, please remember, just a few days ago you probably hated what’s going up today and were in love with the ones that went down.”

In Cramer’s lightning round, he flew through his take on callers’ favorite stocks:

WestRock: “I worry about this every day. My charitable trust owns it. I talk about it with the club members and I’ve got to tell you, I’m not pushing it aggressively because I think there is too much capacity coming on and they’ve got to close this deal. Once they close the deal, then it’s a buy. We are sitting and waiting and it is killing me, but you know what? I think it’s done going down. Not that that’s a recommendation.”

Proofpoint: “Listen to me and listen good. We are all concerned that Microsoft is eating their lunch. Microsoft has stepped up in this game and the only thing we can do is invite the company on [to] tell us how they’re combating this theory that Microsoft’s killing ’em. But you’re right to mention it and I haven’t solved the conundrum yet.”

Disclosure: Cramer’s charitable trust owns shares of Amazon, Johnson & Johnson, J.P. Morgan, Nvidia, Alphabet, WestRock and Microsoft.

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