After the stock of DexCom plunged over 30 percent, CNBC's Jim Cramer had to investigate why shares of the top medical device maker got decimated.
"DexCom's problem is pretty straightforward. A week ago, we learned that gigantic company Abbott Labs had received FDA approval for its new FreeStyle Libre Flash glucose monitoring system for people with both type 1 and type 2 diabetes. And in many ways, this represents a major competitive threat to DexCom," the "Mad Money" host said.
DexCom is the leading maker of glucose monitoring systems, so analysts saw Abbott's new system, which is the first and only one to offer blood-sugar monitoring without the routine finger-prick, as a formidable challenge.
But Cramer said that DexCom has come back from similar challenges before and should be able to stand up to Abbott's new product, perhaps even offering a version of its own eventually.
"A year ago DexCom got slammed based on competitor concerns from another giant, Medtronic, and its so-called artificial pancreas — a glucose monitor combined with an insulin pump — but the stock was able to make a dramatic comeback, as DexCom's numbers continued to be excellent," Cramer said. "Anyone who's owned this stock has been obliterated by the Abbott news, and that's terrible. Mea culpa again. But at these levels, I believe DexCom will be able to rebound, even if it might take some time."
Cramer's 10 Actionable Market Negatives
In a red-hot stock market that can't seem to slow its winning streak, Cramer has been inundated with requests from viewers to lay out the market's negatives.
"Now, I have endlessly told you how errant tweets, dysfunctional tax policy and 'little Rocket Man' can all create a hideous backdrop at any given moment," the "Mad Money" host said. "But those are all 'big think' issues, the kind of thing that drives me a little crazy, steams me, because it's total thumb-sucker journalism. It's central casting. It requires nothing that's even remotely like homework. It's by rote."
So, to give investors something to consider while they make decisions about their portfolios, Cramer decided to detail 10 overall negatives in the market.
Bill Ackman on ADP
Workplace solutions giant ADP's proxy fight with activist investor Bill Ackman and his firm, Pershing Square, has not exactly been a private matter.
In an increasingly heated, drawn-out exchange, Ackman and ADP CEO Carlos Rodriguez have been trading barbs as Ackman pushes for seats on the company's board, arguing that his candidates will help the company seize on an opportunity to improve its business model.
"Our new question for ADP is why is it that ADP has lower revenue productivity than all of their competitors?" Ackman asked in an exclusive interview with Cramer.
In the Wednesday interview, Ackman said that ADP generates average revenue of $160,000 per employee, while its competitors average $224,000 per employee.
"When you think about ADP, it has enormous scale versus the competitors. So, if anything, they should have more efficiency," Ackman told Cramer.
Insider Trading at Equifax?
For Cramer, insider trading is no joke.
"The moment a company's management finds out that it possesses material non-public information, they must immediately close the window on insider selling. Otherwise, the chance is way too great that some executive will take advantage of that inside information and dump stock, which may have happened at Equifax," Cramer said.
So as federal prosecutors reportedly look into why three Equifax executives sold almost $2 million worth of the company's shares just days after Equifax underwent a massive cybersecurity breach, Cramer called on the Securities and Exchange Commission to investigate.
Tyson Foods: From Zero to Hero
Finally, Cramer examined Tyson Foods' almost superhero-like transformation to find out how the packaged food giant managed to forge its path to the top of a troubled industry.
After a series of strong quarterly earnings results and sweeping initiatives employed by CEO Tom Hayes to improve the business, Tyson Foods' stock started to gain momentum.
"[In] superhero terms, I'd say Tyson got its powers by mutating. The company changed in some big ways and it's quickly resulted in better numbers," Cramer said.
The company also acquired AdvancePierre Foods Holdings, giving it a new ready-to-eat product line and exposure to convenience stores, which are outperforming the supermarket.
Moreover, the stock's valuation is still fairly cheap, trading at only 13 times next year's earnings estimates, Cramer noted.
"A year ago, Tyson looked like it was in real trouble. Now the company has taken the first steps toward transforming itself. It seems to be in great shape. Even though the stock has skyrocketed in recent months, I think it's got more room to run," the "Mad Money" host said.
Lightning Round: Cramer's TEVA Strategy
In Cramer's lightning round, he shared his take on some callers' favorite stocks:
Teva Pharmaceuticals: "This bad news should've been in the stock. It wasn't. People had been waiting for it. That's the loss of Copaxone exclusivity. However, I will tell you this: if you want to buy, Allergan owns 10 percent of the company. I think they have to sell that stake. That would be the time to pull the trigger if, indeed, you did want to be in it, of which I'm not crazy about."
Seattle Genetics: "They came through. Seattle Genetics, we met with them four years ago and I was really hopeful and it turned out they kind of spent some time in the wilderness and now they're in the land of Canaan. I want to own the stock."
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