Mad Money

Cramer Remix: Beware of department store stocks as you finish your holiday shopping

Cramer Remix: Beware of department stores as you finish holiday shopping

Jim Cramer was stunned by the lack of homework done by investors on Friday, and he hopes that doesn't extend into next week.

Shares of Honeywell dropped sharply after the company indicated that earnings could come in at the low end of its range. Investors forgot that industrials don't trade on earnings, but on organic growth. When taking that into consideration, the company actually guided up on that key metric.

"Just because we have a good run, that doesn't mean we stop doing homework. Don't be a misinformed miscreant. I'm begging you, take a few moments to do some thinking before you take action," the "Mad Money" host said.

There was also a note out from JPMorgan's Matthew Boss that stated a weak quarter could be coming from Nordstrom, as the company warned this is the worst mall environment since 1972.

That was all the signal Cramer needed to be concerned about department stores.

"Beware the department store, or at least the department store stocks ... If Nordstrom is hurting, and its stock fell nearly 9 percent today, they can't be alone," Cramer said.

Cramer reminded investors on Friday that there needs to be another reason for stocks to fly higher outside of President-elect Donald Trump.

"I think it is worth getting some exposure to these Trump-free bull markets, simply because you need to stay diversified," he said.

After all, if Republican senators hold Trump's agenda hostage, investors will want stocks that can power higher while that agenda is on hold.

Leading the charge of the Trump-free zone are the optical networking plays like Ciena, Finisar, Oclaro and Lumentum. These are all companies that make components for fiber optic networks to help move huge amounts of data.

Cramer thinks that all this hoopla on Wall Street about the Dow Jones industrial average hitting 20,000 is silly.

"I almost feel like we are being drawn to this number like zombies from 'The Walking Dead.' I wish it didn't feel so inevitable because it's stretching the valuations of way too many stocks," Cramer said.

Nevertheless, Cramer did dig up a scenario that could take the Dow to 20,000 even if it could be a bit too optimistic. He listed seven stocks that could take investors to that magic number.

A man dressed as Santa Claus walks the floor of the New York Stock Exchange.
Shannon Stapleton | Reuters

Lately there has been a large amount of consolidation in the semiconductor space, which has been a huge positive for the broader industry. When you take out the competition, the remaining companies get a big boost in pricing power.

"I see the potential for another transformational deal that could create a semiconductor powerhouse," Cramer said.

Cramer recommended Micron takeover the juicy business of Advanced Micro Devices. Micron has too much exposure to the personal computer, Cramer said, and it needs to be diversified.

Cramer also called GTT Communications the "best-performing stock you've never heard of." GTT is a unique internet service provider with a stock that has quietly rallied 59 percent this year.

The success of the company came down to helping to connect companies to the cloud via private networks. Its unique business model and strong growth rate gave Cramer confidence that the stock has more room to run.

In the Lightning Round, Cramer gave his take on a few stocks from callers:

Alcoa: "Alcoa is the spinoff of Arconic. We like Arconic. My charitable trust has a big position in Arconic because where Klaus [CEO] is ... Alcoa is more commodity and I do not want to own the commodity maker. It has moved too much."

MFA Financial: "I see that 10 percent yield and I've immediately got to throw the red flag. That is a challenge to that stock's yield."