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Cramer Remix: Why 4 downgrades can't hold back this energy stock

Cramer's interest is always piqued when a stock gets hit with a series of downgrades and then refuses to go lower.

The price of oil dropped sharply in early November, and analysts became worried about the oil patch, especially the drillers. That is how oil and gas drilling contractor Helmerich & Payne was downgraded four times in one month.

The problem is that by the time the stock was downgraded in the first half of December, oil had already rebounded and the demand for drilling was clearly picking up.

"They failed to adjust to the new reality, which is why this stock barely seemed to notice [its] downgrades," the "Mad Money" host said.

That's also why Cramer considers this stock worth owning at current levels, especially with the 4 percent yield that pays investors to wait for the rebound in drilling.


Republican presidential candidate Donald Trump.
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Republican presidential candidate Donald Trump.

Like it or not, President-elect Donald Trump is succeeding in his mission to protect and create American jobs.

"What matters is when it comes to strong-arming executives into keeping jobs in this country, Trump's got the supermarket going for him," Cramer said.

This term refers to a lesson Cramer learned from the "Mad Money" wall of shame. When Cramer speaks with executives who have been on the wall of shame for destroying value at companies, he often hears within the plea from the executive that they want to be taken down because they don't want their spouse stared at in the supermarket.

Granted, Cramer's bully pulpit is a fraction of the size of Trump's methods in tweets and press conferences. But if CEOs get uncomfortable about being on the "Mad Money" wall of shame, imagine the embarrassment factor when the President of the United States singles them out on Twitter.

Amazon's announcement to create 100,000 jobs in the U.S. by 2018 on Thursday also marked a shift in the business paradigm for Cramer. The significance of this is that Amazon chose to take a path that didn't exist just a few months ago. Many other stocks have taken the same action since the election after being bogged down by gridlock in Washington that stifled growth.

Industrials have rallied on the belief that demand will grow with a government in Washington that is no longer in the way and with the notion that Donald Trump will work with businesses that create jobs in the U.S. Delta also confirmed its business grew in December, echoing the sentiment of United Airlines. Homebuilder KB Home also said things have gotten better since the election.

The market will now be drawn to these kinds of stocks, Cramer said, not just the companies that were oldies-but-goodies because of their consistent slow growth and decent dividend.

"It is a seismic shift in stock picking, and Amazon is the most extreme example," Cramer said.

An employee stacks boxes filled with merchandise for shipment at the Amazon.com distribution center in Phoenix, Arizona.
David Paul Morris | Bloomberg | Getty Images
An employee stacks boxes filled with merchandise for shipment at the Amazon.com distribution center in Phoenix, Arizona.

Advance Auto Parts' stock has picked up a juicy gain since activist hedge fund Starboard Value took a stake in the company and Cramer is wondering about its exit strategy already.

"It's no sin; even the best have to ring the register sometime. Specifically, I think Advance Auto Parts could be an ideal takeover candidate," he said.

More importantly, Cramer is convinced that this could be a motivated seller situation as Starboard's position in AAP is likely only to be up slightly. Given that the position represents 11.5 percent of the fund's portfolio, he thinks Starboard would agree to arrange a sale and pick up a gain.

While AutoZone and O'Reilly seem like natural acquirers, Cramer thinks O'Reilly is the more likely option because it is larger and has a cleaner balance sheet.

"This could be one of the most straightforward takeover stories out there," Cramer said.

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

Visteon: "I know Visteon has run a lot. The problem is that there has been upgrade, upgrade, upgrade, upgrade. You've got to let it come down a little and then you can pull the trigger. Not yet."

American Tower: "It has fallen out of favor because there is a lot of talk that there is going to be mergers in the business. I would say that American Tower is the best of the business. James Taiclet [CEO] is worth owning. I think the stock if you get it under $100 is terrific. I know the chart looks very bad."