Mad Money

Cramer Remix: Why Apple’s stock has been set up to fail

Key Points
  • "Mad Money" host Jim Cramer still says to hold Apple, not trade it, but shares why he feels indifferent to its upcoming quarter.
  • Cramer also checks in with the CEO of American Electric Power.
  • In the lightning round, Cramer gave his take on two telecom stocks.
Cramer Remix: Why Apple’s stock has been set up to fail

On a down day for the major averages, CNBC's Jim Cramer said that investors should look at Monday's broad-based dip as an opportunity.

"If you've been waiting for a pullback to do some buying, this is your moment," the "Mad Money" host said. "This week we're going to run a gauntlet of important earnings reports, and while I think we can get through it OK, I bet there will be some damage. And you know what? That damage is [the] first chance for long-term investors to buy into weakness this year."

Cramer couldn't help but zoom in on the hustle and bustle around Apple ahead of its Thursday earnings report.

Bearish iPhone sales forecasts have plagued Apple's stock in the weeks leading up to the report, all but setting the stock up to "fail" on Thursday, Cramer said.

"I don't know what Apple will report. I don't know what it's going to say. I just don't want people to flee from this stock and then not be able to get back in when it turns out the new products have legs and the service revenue stream becomes huge," he said.

"When Apple goes down, it takes the stocks of all its suppliers with it," the "Mad Money" host added. "No need to buy those until you see the whites of Apple's eyes."

Off the charts: A healthy rally?

Michael Neidorff, CEO of Centene Corporation.
Cameron Costa | CNBC

In a bull market, Cramer knows all too well that money managers tend to chase fast-growing stocks like the industrials and sell slow growers like the health care names.

"Yet this time appears to be different," he said. "Since the beginning of the year, the health care sector has been roaring right alongside the industrials and the financials."

To understand whether the health care rally is sustainable, Cramer called on legendary technician Marc Chaikin, the founder and CEO of Chaikin Analytics.

Chaikin, who invented several key technical indicators including the accumulation-distribution line and the Chaikin Money Flow, looked at three very different stocks to get a comprehensive view of the space: Centene, Cardinal Health and Amgen.

Can Wynn win without Wynn?

Billionaire Steve Wynn, chairman and chief executive officer of Wynn Resorts Ltd.
Calvin Sit | Bloomberg | Getty Images

Cramer has long considered Wynn Resorts CEO Steve Wynn, who was recently accused of sexual misconduct, to be "one of the greatest executives of all time."

"Obviously that's not an excuse, people, but as investors, it's something we need to reckon with. Wynn's created tremendous wealth over the years thanks to his dynamic style of leadership," the "Mad Money" host said on Monday. "I know of no other CEO who has his attention to detail or feel for what his customers really want. To be at one of Wynn's casinos is to feel like a king."

For years, Cramer has seen Wynn Resorts' stock as a hotel stock trading at a premium tied to Steve Wynn's leadership. But given the allegations, things have to change, he said.

"Now that Steve Wynn stands accused of being a serial sexual harasser and abuser, it's a big deal for Wynn Resorts and the stock. Steve Wynn is Wynn Resorts," Cramer said, noting that the Nevada and Massachusetts Gaming Commissions "could make life hell" for the company's expansion plans.

Wall Street weighs in on Whirlpool 

A trader works on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters

When Cramer sees analyst showdowns like the one that's happening around appliance maker Whirlpool, he likes to review each case for investors so they can form their own opinions.

In the last week, both the bulls and the bears got a win in Whirlpool. The Trump administration announced it would raise tariffs on imported appliances, a win for the U.S.-based Whirlpool, but then the company reported earnings that fell short of Wall Street's expectations.

As a result, Keybanc downgraded the stock, citing weak long-term catalysts, cost inflation and competition from Samsung. However, Raymond James upgraded the stock on the new tariffs, potential price raises and renewed strength in U.S. markets.

"Where do I come down? Alright, look, Whirlpool has been a troubled manufacturer, and based on the latest numbers, it's clear that the company's still in the process of getting its act together," Cramer said. "But if they can deliver, you know what? I think the upside to this stock could be enormous."

Still, Cramer was hesitant to recommend the stock for all investors because he was wrong when he recommended it as a Trump stock a year ago, even though he was eventually right about the tariffs.

"There's a reason Whirlpool has lagged the rest of the market lately — they have real operational issues — so while you certainly have my blessing to buy the stock, [it's] not for retirement money," he said. "This thing is purely for your discretionary mad money portfolio, even with its bountiful 2.4 percent yield."

American Electric Power CEO on tax reform

The benefits of the new tax law go beyond lower rates for companies and consumers, American Electric Power Chairman, President and CEO Nick Akins told CNBC on Monday.

"There has been substantial growth," Akins told Cramer in an interview. "As a matter of fact, the GDP in the areas that we serve are exceeding the national average and we certainly are very benefited by the number of customer counts and the people moving in. For the first time in many quarters, our residential sectors have increased, so that's a great outcome for the company."

Akins said the post-tax-reform growth has sparked new discussion about how his massive utility company will deploy capital, including with its $4.5 billion investment in an Oklahoma wind farm.

"There is no doubt that this project will be beneficial across the board for not only industrial and manufacturing, but also other customers in that four-state region that's being served," Akins told Cramer.

"The U.S. is in a great position at this point with a myriad of different energy products that are available," Akins continued. "That balanced set of resources provides exceptional benefits to our customers and, in fact, should be benefiting to the entire world, particularly as it relates to natural gas."

Lightning round: Tepid on telecom

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

American Movil: "No, I'm going to take a pass. It's up too much."

Verizon Communications: "I like Verizon, particularly if it gets down to the $52 level."

Disclosure: Cramer's charitable trust owns shares of Apple.

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