- CNBC's Jim Cramer calculates how health-focused conglomerate Danaher could still get its groove back.
- The "Mad Money" host also sits down with the CEO of Centene, who talks Obamacare.
- In the lightning round, Cramer gets fed up with the stock of Scotts Miracle-Gro.
Every once in a while, CNBC's watches a once-beloved stock fall out of favor with investors. But what really interests him is how that stock gets its groove back when Wall Street throws it to the wayside.
"Let’s consider the case of Danaher, the life sciences, diagnostics and environmental technology play," the "Mad Money" host said on Tuesday. "Over the past few decades — decades — Danaher has been perhaps the single best conglomerate on earth."
But earlier this year, shares of Danaher stalled after the company issued some disappointing guidance. That spiraled into tariff-related pain as investors worried about its broad overseas business. Then, in April, Danaher's earnings report revealed another problematic side to the story: the conglomerate's lagging dental business.
This quarter, however, Danaher turned things around, deciding to spin off its dental business as a separate company and addressing tariff concerns head-on, Cramer said.
"Suddenly, the two biggest overhangs had been either removed or alleviated," he said. "Now it appears that the China impact is both minimal and manageable, and dental will soon be no longer part of the company."
Now, Danaher's diagnostics, life sciences and environmental segments can continue to enjoy their double-digit growth and margin expansion without the slow-growing dental business infringing on the numbers, Cramer said.
"Think of it as addition by subtraction," he said, adding that Danaher's stock is still a buy thanks to "the consistency and the acceleration of the numbers."
"Danaher’s doing everything it needs to do to generate higher stock prices, which is why I think this baby has more room to run," Cramer continued. "Without dental to worry about, with the tariffs looking manageable, this already terrific story is suddenly looking a heck of a lot better."
Cramer is tired of watching the stock market swing from bullish to bearish on a dime.
"If I had to sum up this market in a word, I’d call it extremist. We rush from one extreme to the other, sometimes in the same day," he said as report on Tuesday.
Exhibit A? As the rallied on nothing other than Alphabet's strength, the big industrial stocks fell after President praised , which tend to hurt industrial conglomerates, Cramer said.
But Cramer argued that the industrials' decline also happened "in part because many traders made up their minds that things weren’t so hot before they even knew what the industrials were going to say."
That's what frustrated Cramer the most. To find out why, click here.
With the stock market it reached in January, Cramer knows investors are starting to wonder if these levels are sustainable.
"Will it be smooth sailing? Or is it time to be afraid because we could be in for another February-style swoon?" the "Mad Money" host asked on Tuesday.
To answer these questions, Cramer enlisted the help of technician Mark Sebastian, the founder of OptionPit.com, Cramer's colleague at RealMoney.com and "Mad Money's" resident expert on market volatility.
Specifically, Sebastian focuses on reading the , more commonly known as the VIX or the "fear gauge." The VIX tracks monthly options to measure implied volatility, or the amount of uncertainty in the size and direction of changes in a market. Volatility is typically measured by the deviation of returns.
proved that shares of the Google parent and its fellow tech titans could still head higher, Cramer said on Tuesday.
The reason why came to Cramer halfway through conference call, when CEO answered a question about Google's prevalence in society.
"We want Google to be the source you think of when you run into a problem," Pichai told analysts and shareholders.
That struck Cramer as the driving factor for success in all of FANG, namely the stocks of , , and Alphabet.
Health insurance giant Centene is profiting from the Patient Protection and Affordable Care Act, more commonly known as Obamacare, despite the Trump administration's efforts to scale back the program, Chairman and CEO Michael Neidorff told CNBC.
"Obamacare is working, we’re doing very well with it and we’re anticipating growing it," Neidorff told Cramer in an exclusive interview on Tuesday.
While Neidorff said he would be "careful not to be specific" about President Trump in particular, he emphasized the growth Centene has seen with Obamacare, adding that it was in the "top-end" of his company's margin range.
"I think just in general, we have moved from policy to politics," the CEO said. "And if you look at what’s the right health care policy for this population, the ACA works. And we’ve proven it. We’ve been doing this for five years. It’s been very successful."
For more on Centene, its Fidelis acquisition and its prospects, watch Neidorff's full interview here.
In Cramer's lightning round, he zipped through his take on callers' favorite stocks:
: "You know what I feel about Scotts? They keep, keep screwing it up. And therefore I think that it's absolutely right that it's lower. And you know what? I know people were playing it as a pot play. We've got real pot plays now and the one that I still like is , but I also think ] is good and, you know, I'm keeping track of the whole group."
: "The reason why [consumer staples are] lagging the market is because they haven't been able to show a lot of growth. Coca-Cola's actually on a growth path. It's doing a little bit better. They're about to report. I think that [CEO James] Quincey's doing a good job and I think it's slow and steady."
Disclosure: Cramer's charitable trust owns shares of Danaher, Alphabet, Facebook and Amazon.