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Cramer Remix: 'Revenge of the underperformers' the official new earnings theme

Judging by the performance of Etsy, GoPro, Fitbit and Groupon, Jim Cramer has deemed this quarter's earnings theme as the time for underperformers to get their revenge.

"All stand outs from the quarter, all realizing their formerly unrealized potential, and all low-expectation places to be as the dog days of summer unfold," the "Mad Money" host said.

These four companies all were once the darlings of retail that at various points crushed shareholders. Cramer clarified that the slides didn't necessarily occur because of the actual performance of the companies. It was because of an impossible bar that was set too high for them from over-enthusiasm for the products themselves.

The most notable of the bunch was Fitbit, which impressed Cramer with its product lineup and strength of the health and wellness franchise.

"I have to tell you that even though its stock has been a dog, Fitbit the company actually never really disappointed with its earnings, it just repeatedly stung shareholders with its pitiful guidance. Not this time, though, " Cramer said.

Phil Knight
Matthew Staver | Bloomberg | Getty Images
Phil Knight

For more than 30 years, Nike has been known for its endorsement of legendary basketball player Michael Jordan.

According to Nike's co-founder Phil Knight, the company uses a very sharp pencil with its endorsements and if the athlete doesn't produce the sales, the deal isn't worth it.

"It's an art, and you're going to miss a lot of them … When it all comes together just right, it kind of creates magic," Knight said.

And while athletic companies may pay a lot for endorsement from professional athletes, Knight says both Michael Jordan and LeBron James were absolutely worth it. He did not confirm what Nike pays Michael Jordan today, but said that the original contract was for $250,000 a year.

Inspired by his recent book "Shoe Dog: A Memoir by the Creator of Nike," Jim Cramer spoke with Knight, who said it is not easy identifying the next Michael Jordan.

Meanwhile, it was just a few weeks ago that Cramer warned investors that the S&P oscillator was in severe overbought territory. Now that the oscillator has bounced back, he revealed four themes to embrace and avoid.

The S&P 500 oscillator measures the level of buying and selling pressure. It previously had a reading of 10, which indicated to Cramer that there was an excessive amount of buying in the market and it was time to ring the register.

"The bulls were lucky that this decline wasn't more damaging and permanent, in that every time the market takes a sharp leg down, more people flee from the whole asset class," the "Mad Money" host said.

Rather than advise investors to go out and buy all stocks, Cramer identified four themes that are worth embracing: all semiconductors, pet, biotech and steel stocks.

He recommended staying away from restaurants, retailers, airlines and apparel.

Aaron McCoy | Getty Images

Consumer packaged goods stocks were one of the strongest groups for the first half of the year, as investors seeking income flocked to them for a bond market alternative.

In the past few weeks, the group has lost its luster partially because a rate hike from the Fed later this year could put a dent in the bond market alternatives, and also because of the strong dollar.

Clorox reported solid earnings on Wednesday that showed strong organic growth. Even though it ultimately showed a small bottom line miss, Cramer was thrilled by management's guidance for 2017.

To learn more about what could be ahead for the company, Cramer spoke with Clorox CEO Benno Dorer.

"One of the hallmarks of our company now is that we have growth where others don't. And the reason is pretty simple. We take out costs and we reinvest those cost savings into the business," Dorer said.

RR Donnelley & Sons is the world's largest commercial printing company was thrust into the spotlight last year when it announced plans to break itself up into three separate entities.

The goal of the break-up is to unlock further value as a multi-channel communications management business, a printing business for magazines and catalogs and a financial communications and data services company.

With chatter of a possible merger with Xerox, Cramer worried that it could put a hold on RR Donnelley's break-up plans. To make matters even more confusing, the company reported an earnings beat with higher than expected revenue, but its stock was hit because the full-year revenue forecast was at the low end of management's prior guidance.

To gain clarity, Cramer spoke with RR Donnelley's President and CEO Tom Quinlan, who assured investors that the break-up is on track.

"We haven't responded on rumors in the nine years that I have been CEO, and we are not going to start now. But what I will tell you is we are on track for the spins," Quinlan said.


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

Opko Health: "Phil Frost [CEO] I think he's doing his thing. Ever since that acquisition the stock has done nothing, it's flatlined. I'm still with Phil."

AbbVie: "The company is doing everything right. I urge you to stick with it. I think it's terrific. I wouldn't touch a thing. I want you to be in it."