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Cramer Remix: Why stocks are worth more than you think right now

Cramer Remix: Why stocks are worth more right now

Sometimes it is hard for investors to see clearly what type of environment cultivates higher stock prices. With the averages headed higher on Tuesday, Jim Cramer went down the list of what makes this market so special right now.

"When you have the basics working for you, not against you, investors find reasons to throw money at the market. And right now it sticks on the stocks with the best international stories," the "Mad Money " host said.

The first positive sign Cramer pointed to was low inflation. Investors love low inflation, as that means the long-term value of stocks are going to be preserved. High inflation will erode value because earnings will have less purchasing power.

The employment number on Friday signaled to Cramer that there was no inflation in the system besides mandated inflation that comes from higher state and local minimum wages.

"Tame inflation means that all stocks are worth more, so even if you hear that the stock market is expensive,it might not be as expensive as it seems given inflation isn't eroding the value of the gains you get from higher stock prices of future dividend payments down the road" Cramer said.

Money Counter, coins
Billy H.C. Kwok | Bloomberg | Getty Images

The market was led by airlines and oil on Tuesday, which means Cramer was in heaven.

"It is probably too early to call a turn in the entire group, but I think it is safe to say that the worst is over," the "Mad Money " host said.

Airline stocks have remained very cheap in recent months, as many investors assumed that as the price of oil goes higher, airline margins will shrink. Thus, it is one group that is truly impacted by rising oil prices.

However, Cramer is seeing sudden signs of life again in the group. JetBlue announce price increases, while American Airlines confirmed that it would change its rewards program in July to be one based on customer spending rather than miles.

"That is going to be a lot of income," Cramer said.

Cramer also turned his attention to the tech industry, starting with an interview with Hewlett Packard Enterprise CEO Meg Whitman. As the former CEO of eBay, Whitman is the only woman to have led two large U.S. public companies. Her tenure at eBay also provided her with the experience necessary to turn around a large company like Hewlett Packard.

"We started the turnaround journey four and a half years ago and I said at the time it was going to take five years," Whitman said. "Turnarounds of this scale and magnitude, they just do. I've done it before; it is just is how long it takes. There are milestones along the way, but we are now rounding the bend out of that turnaround."

Since taking over Hewlett Packard in September 2011 and has made several changes in order to unlock further value. She considered the core DNA of the company to focus on innovation, customer care and focus.

"We have become an execution machine and I think all of Hewlett Packard should be pretty proud of that," Whitman said.

Greg Bajor | Getty Images

Cramer took the time to dig further into, another interesting cloud-based web company with a stock on fire this year, up 20 percent.

Wix recognized that creating a website is an essential part of starting a new business, and created a platform that makes it easy to do so. The company allows users to design their website for free, which then allows Wix to sell advertising space on the web page.

On Tuesday, Wix launched a new artificial intelligence powered web design platform. Cramer spoke with Wix's co-founder and CEO Avishai Abrahami, who explained that most customers may be deterred because they don't have the time, design skills or know what content to feature on a website.

"We wanted to take all of that away. So, basically the AI is doing all of that for you," Abrahami said.

One tech company that Cramer once regarded as hated and left-for-dead is Advanced Micro Devices (AMD). Suddenly it has risen from the ashes and has more than doubled since its January lows; prompting Cramer to find out if it is worth investing.

He turned to Bruce Kamich for assistance, a technician, professor at Baruch College and colleague of Cramer's at Kamich tends to be negative on stocks, but recently made a positive case for AMD, even as it seemed destined for bankruptcy not long ago.

AMD makes microprocessors for the declining personal computer industry, as graphics chips for computers and videogame consoles. The stock closed at $4.51 on Tuesday, while it was trading at just $1.61 in July of 2015.

"I am willing to bless the stock as a speculative trade, but if Kamich is right and AMD rallies up to $5 or $6, you need to ring the register and walk away, because this chip-maker is still way too risk to own as a long-term investment," Cramer said.

In the Lightning Round, Cramer gave his take on a few caller favorite stocks:

Hertz: "I read all those activists ... I'm not there. I think this industry is being destroyed Uber, OK. I'm going to put this out there and say it. I don't want to touch it because of Uber, that's why."

National Oilwell Varco: "Holy cow, this stock has now bottomed ... I do not have a case to buy it because my charitable trust owns Schlumberger, but I understand and I see the bottom."