When investors wake up nearly every morning to a confusing or market-moving tweet from President Donald Trump, Jim Cramer takes it upon himself to expose the not-so-obvious trends pushing stocks up despite political rhetoric.
"In order to get your stock up in this environment, a CEO has to do one of four things," the "Mad Money" host said. "One, break up your company into separate entities to bring out value. Two, buy other companies that augment your core business in order to grow. Three, have a sizable business in Europe and Asia to offset American weakness, or four, have a better mousetrap that the customer loves."
Cramer argued that every stock that soared on Tuesday had one of these key drivers behind it. The first was exemplified in IAC/InterActive buying advisory service Angie's List and merging it with the IAC-owned HomeAdvisor to form a new standalone company.
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The two merged names had similar missions of pre-screening and rating professionals for various service roles, which Cramer said would give the new company focus and scalability.
The second stock-boosting rule was exhibited by Cramer-fave industrial Martin Marietta Materials, which has been acquiring aggregate businesses like wildfire.
"These deals have transformed it from a tiny regional player to a company with businesses in every fast-growing state. And that's how Martin Marietta could act like a fast growing tech stock when it blew out the quarter [Monday] night," Cramer explained.
"North American engine shipments declined by 1 percent. But international revenues increased by 17 percent and, more important, first quarter revenues, including joint ventures, came in at $1.1 billion, an increase of 49 percent, because of growth in China for Cummins' highway and constriction business," he said.
The fourth and final rule is having "a better mousetrap," which Cramer has seen time and time again with tech giant Apple.
Though Apple's stock sank in after-hours trading after it released its earnings report on iPhone sales weakness, Cramer said the company has more than a few attractive attributes.
"With a price-to-earnings multiple way below the average stock, with a gigantic buyback that you are more than welcome to sell into because Tim Cook, the CEO, is adamant the stock is cheap ... and with a potential for repatriation of tens of billions of dollars at low tax rates if the president and Congress could see eye to eye on anything, I say be my guest," he said. "But after scrutinizing the quarter, I am sticking with my long-held view to own it. Don't trade it."
Certainly, some stocks find other ways to move up against political worry. United Continental's stock went higher after CEO Oscar Munoz appeared in front of Congress, and Coach's stock climbed after Selena Gomez wore a Coach dress to the Met Gala.
"But the bottom line is, in an environment where Trump's trumping himself with inconsistent pronouncements that are throwing off pretty much everyone, it pays to merge, it pays to spin, it pays to sell internationally, or it pays to produce a better mouse trap," Cramer said. "Without one of these, all I can say is good luck."
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