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Cramer Remix : Why I like seeing activist pressure in stocks

  • "Mad Money" host Jim Cramer digs into the recent activist activity at GE, P&G and others, and offers his take on how activist pressure can impact your investments.
  • Cramer also speaks to the co-founder and CEO of Workday, who explains his company's new cloud-based customer offering.
  • In the lightning round, Cramer defends a rising defense player.

With news of the proxy battle between Procter & Gamble and activist investor Nelson Peltz coming to a close, CNBC's Jim Cramer shared his thoughts on the practice of activism.

"This is very much a case-by-case thing," the "Mad Money" host said. "There are some 'scorched earth' activists who seem to specialize in creating ill will and not much else. But you know what? I think those days are largely behind us, at least when it comes to smart activists who know what they're doing."

From Peltz's failed run at Procter & Gamble to his partner Ed Garden's board seat win at General Electric, activist investors can help open executives' eyes to parts of their companies that could use refining, Cramer said.

Overall, whether the investor succeeds or not, Cramer sees activism on Wall Street as a net-positive for companies, particularly those with businesses in need of reform.

"Some of these activists are better than others, but generally speaking, when a smart activist like a Peltz or a [Elliott Management's Paul] Singer gets involved, it's a good thing for you at home. Even when the activists fail to get everything they want, you, as a shareholder, should be grateful for their work. Believe me, these stocks, many of these, would be even lower, maybe much lower, without the pressure these funds put on management," Cramer said.

Off the Charts: Semiconductor Sway

An employee inspects semiconductor chips.
Dario Pignatelli | Bloomberg | Getty Images
An employee inspects semiconductor chips.

Cramer knows that a juggernaut stock market can be instrumental in sending technology stocks soaring.

"That goes double for the semiconductor space, the chipmakers that make big-picture themes like autonomous driving, internet of things, artificial intelligence, mobile, gaming [and] the data center ... possible," he said. "Strength in the semis signals that consumers are willing to spend more money on all sorts of devices, which is why this group can be such a terrific leader, especially during economic expansion like we have around the globe."

Technician Bob Lang, the founder of ExplosiveOptions.net and one of the three brains behind TheStreet.com's Trifecta Stocks newsletter, pointed out to Cramer that the semiconductor cohort has been surging higher for years.

Since the market bottomed in March 2009, the VanEck Vectors Semiconductor ETF has run 1200 percent, a monster gain relative to the S&P 500's almost-300 percent gain over the same period.

And the move is widespread, not just driven by powerhouse stocks like Nvidia, Cramer said. So he turned to Lang's charts to track some other strong semiconductor names.

Bank Buddy at the Fed?

Randal Quarles, governor of the U.S. Federal Reserve nominee for U.S. President Donald Trump.
Andrew Harrer | Bloomberg | Getty Images
Randal Quarles, governor of the U.S. Federal Reserve nominee for U.S. President Donald Trump.

Nobody wants another financial crisis, but Cramer knows that the bank cohort has been utterly squeezed by the strict regulations placed on it during the Obama administration.

"The industry was subject to stringent regulations that made riskier banking impossible, while dividend growth was forbidden without the approval of the Federal Reserve," Cramer said.

But one Fed newcomer could change that, Cramer argued. President Donald Trump's nominee for the central bank's board, Randal Quarles, will take over as the Fed's vice chair of supervision.

"And while you can argue about the merits of deregulation, one thing is clear: Quarles is going to be fabulous for those of you who own bank stocks," Cramer said.

Workday CEO on Cloud Offering

Aneel Bhusri, CEO of Workday.
Mark Neuling | CNBC
Aneel Bhusri, CEO of Workday.

Aneel Bhusri, the co-founder and CEO of cloud-based software company Workday, told CNBC that his customers can now use Workday's platform to do more of their own work.

"Since we started the company, we were really focused on building out platform for our own use, for human resources and financial management software, but our customers and partners kept asking for access to it to build their own applications on top of it," Bhusri told Cramer on Tuesday. "We finally felt it was ready to open that up. So what it means is that customers and partners can now build applications on top of the Workday platform, use our rich set of APIs, our security services, our data services."

Bhusri said that his company's data-as-a-service model outpaces the competition because, unlike legacy cloud providers, all of Workday's customers are using the same version of the same platform.

"For Workday, over time, it'll become another significant revenue stream much like we've seen from other companies," Bhusri told Cramer. "And I think the important piece for Workday is we've evolved from an apps company into more of a platform company as time has gone on."

Tellurian Executive on the Fate of Oil

As Tellurian Chairman and Co-founder Charif Souki finalizes the projects that will take his new company from concept to commerce, he told CNBC that the environment is just right for Tellurian's main trade: low-cost natural gas exports.

"Two things have happened that are dramatically different. The first one is that the U.S. is now unquestionably a provider of low-cost natural gas on a global basis. The second one is that the business has grown so much, LNG, that it's now a true commodity," Souki told Cramer in a Tuesday interview.

While the company's main project, a processing plant in Louisiana known as Driftwood LNG, won't be ready until 2022, Souki had some thoughts on the future of oil prices.

"I am fairly comfortable between $50 and $60, but I'm starting to have a little bit of a bias because the risk around the world is increasing and I don't think the U.S. will be able to keep up. I don't know the timing yet, but I think I'm starting to get a little bit nervous and we might see prices start to go up," the executive said.

Lightning Round: A Long-Term Fighter in KTOS

In Cramer's lightning round, he flew through his take on some callers' favorite stocks:

Kratos Defense & Security Solutions: "Oh, it's been one of our favorites. We almost cautioned double right now and I want to stay long."

FibroGen Inc.: "Oh, boy. That is extremely speculative. As long as you're doing it with a little bit of money that you know you can lose, because the company itself has no earnings. For me, don't buy."

Disclosure: Cramer's charitable trust owns shares of General Electric.

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