Cramer: 6 Themes Controlling Stocks
There are six big themes that are controlling individual stock movements time and again this earnings season, Cramer said Wednesday.
1. The biggest theme right now, he said, is the collapse in commodities. Names like Ford Motor , Pepsico and Eaton were on the wrong side of the commodity hedge, but Cramer expects each will be transformed some time in 2012.
Panera Bread and VF Corp , on the other hand, show that you can make a ton of money by finding companies that have raised prices and then had their costs slashed or potentially slashed by declining commodities costs.
And he would avoid United States Steel , AK Steel Holding and all the basic chemical makers who were crushed by the commodity collapse.
2. Who is hostage to the health of the global economy. 3M , Ingersoll-Rand and Illinois Tool Works were all hurt, but Eaton, Caterpillar and Parker Hannifin managed to pull away and become more secular in their growth.
And Honeywell and DuPont have made the “ultimate escape from cyclical captivity,” he added.
3. Innovation wins. Just look at companies like Google , Intel and Corning , Cramer pointed out.
4. Know your customer. Netflix failed miserably, but Cramer thinks Apple and Chipotle Mexican Grill are both in touch with their customers.
5. "If you don’t make anything, I don’t want to own you.” That’s the problem with the financials, he said. They aren’t producing anything.
6. Fossil fuels versus renewables. There was an “astonishing obliteration” of the renewable fuel plays, Cramer said. Meanwhile, fossil fuels are in ascendance and he thinks the way to play them has been with the transportation of natural gas.
“When the smoke clears in Europe, these themes are the big ways to try to make money. They aren't going away,” Cramer said. “They're only getting stronger. You need to stay in touch with them if you're going to make money between here and year-end.”
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