Cramer Remix: Jack Henry's stock has great long-term prospects—but there’s a catch

  • CNBC's Jim Cramer reveals why patience may be the best strategy before getting into Jack Henry & Associates.
  • The "Mad Money" host also sits down with the CEO of Core Laboratories, who issues a warning about oil prices.
  • In the lightning round, Cramer shares his bullish playbook for the stock of PayPal Holdings.

When a caller asked CNBC's Jim Cramer about Jack Henry & Associates, he knew he had to look into the under-the-radar financial technology play.

And now that he's had some time to study the company, the "Mad Money" host has drawn a conclusion: "I can safely say that this stock is definitely worth owning, although given its monster recent run-up — the darned thing is less than a buck off its all-time high — you might want to wait for a pullback before you pull the trigger."

Cramer loved the fact that Jack Henry & Associates' technology helps banks, credit unions and other financial players process transactions and manage their data more efficiently.

But he liked its stock, which has rallied nearly 30 percent over the last 12 months and 173 percent over the last five years, for another key reason.

"It’s not just that business is good, it’s also that Jack Henry the stock is safe," Cramer said. "You don’t need to worry about trade disputes, ... it’s a nice, U.S.-focused financial technology stock — a non-bank financial that gives money managers the sector exposure they need without any interest rate risk. … It's almost as if the stock of Jack Henry was created for this very moment."

Even so, there's a catch. The "Mad Money" host warned that if the big bank stocks fall back into Wall Street's favor, shares of Jack Henry could take a serious hit.

"If the banks get their groove back and money managers start selling the fintechs in order to swap into the real financials, that could be trouble," he said. "While I believe in Jack Henry’s long-term prospects, you might want to hold off buying this one until Friday when we start getting the big bank earnings reports. If they disappoint, then Jack Henry's your man."

The best thing about PepsiCo's earnings

An employee pours Pepsi from a soft drink pump behind the bar of a restaurant.
Chris Ratcliffe | Bloomberg | Getty Images
An employee pours Pepsi from a soft drink pump behind the bar of a restaurant.

Besides the fact that PepsiCo's earnings beat on Tuesday set the stage for a strong earnings season, Cramer's favorite thing about its report was what it showed the short-sellers.

"PepsiCo’s stock had attracted a raft of short sellers going into the quarter, people betting that they could cash in on an instant decline," he said Tuesday.

"Instead, they heard the two words short sellers fear most: 'sequential improvement,' as in each month was better than the previous one during the quarter and the improvement’s continued into this new quarter, which is benefiting from a heat wave," Cramer continued.

As a result of the short sellers' missed bets and the strength of its quarterly results, shares of PepsiCo surged 4.76 percent in Tuesday's trading session.

Get more of Cramer's thoughts on PepsiCo's quarter here.

Allergan: In need of a lift?

The Allergan post at the New York Stock Exchange.
Brendan McDermid | Reuters
The Allergan post at the New York Stock Exchange.

After three years of weakness in shares of Allergan, the pharmaceutical giant behind Botox, Cramer has started to wonder when the stock will finally hit bottom.

"The stock has been a terrible performer," said the "Mad Money" host, whose charitable trust recently sold the stock after weeks of declines. "But even if I’m wary of the fundamentals, it turns out that the technicals may be telling a different story."

So Cramer recruited technician Tim Collins, his RealMoney.com colleague, to help with the technical analysis and figure out where Allergan might be headed.

And to Collins, the stock's recovery over the last two months fed into the story its charts were telling. Find out how here.

Core Laboratories CEO's top fear about oil prices

A worker on a an oil drill near New Town, North Dakota.
Daniel Acker | Bloomberg | Getty Images
A worker on a an oil drill near New Town, North Dakota.

The long-term climb in oil prices is concerning even top oil-service executives.

With U.S. West Texas Intermediate crude at $74.11 a barrel and global supply shortages showing no signs of abating, chieftains like Core Laboratories President and CEO David Demshur are getting worried that if the world's demand for oil isn't met, prices could skyrocket to dangerous levels.

"If you look at domestic activity here in the U.S., [it's] fabulous," Demshur told CNBC. "All of our operations here in the U.S. are doing great. Internationally, year over year, activity level’s only up 1 percent. This gives me great concern about what crude oil prices are going to do over the next couple or three years."

In a Tuesday interview with Cramer, Demshur noted that in the past 23 years, oil demand has grown by roughly 1 percent each year. But in the last three years, demand has grown by 1.5 percent each year, the CEO said, a sign that low production in oil-rich countries like Mexico and Venezuela is drilling holes in the world's crude supply chains.

"Right now, we are seeing a big uptick in the amount of crude oil being used," Demshur told Cramer. "My fear, Jim, is that when we go to later this year into next year and 2020, we see $100-plus crude oil again.”

Watch and read more about Demshur's interview here.

Cramer talks Kavanaugh, Trump's SCOTUS pick

Brett Kavanaugh, U.S. Supreme Court associate justice nominee for U.S. President Donald Trump, walks through the U.S. Capitol in Washington, D.C., July 10, 2018. 
Andrew Harrer | Bloomberg | Getty Images
Brett Kavanaugh, U.S. Supreme Court associate justice nominee for U.S. President Donald Trump, walks through the U.S. Capitol in Washington, D.C., July 10, 2018. 

Cramer understands the controversy inherent in President Donald Trump's nomination of Brett Kavanaugh to the Supreme Court.

"If you’re pro-choice, there’s no way to accept Brett Kavanaugh with a smile on your face," he acknowledged. "But my job is to help you become a better investor, and purely in terms of the stock market, I think the pick is a subtle, but long-lasting, win."

From a business standpoint, Kavanaugh's nomination was all about deregulation and scaling back the power of government agencies, Cramer argued on Tuesday.

Having read Kavanaugh's decisions on things like net neutrality and the Affordable Care Act, Cramer classified the longtime lawmaker as "deeply suspicious of non-elected regulators who take sweeping actions" he sees as being beyond their purview.

And when it comes to the business community, Kavanaugh, a judge in the District of Columbia's Court of Appeals, can deliver what most U.S. executives want, the "Mad Money" host said.

Find out how here.

Lightning round: Pay up for PYPL?

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

PayPal Holdings: “[CEO] Dan Schulman’s doing a remarkable job. I think he’s terrific and you know what? You could buy it up to $98.”

The Goodyear Tire & Rubber Company: “[It’s performing badly] because it’s got competition from overseas, it’s got some raw cost problems, and I’ve got to tell you: it has been a terrible stock for decades.”

Disclosure: Cramer's charitable trust owns shares of PepsiCo and PayPal.

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