Cramer Remix: VF Corp is poised for a breakout once it ditches denim

  • CNBC's Jim Cramer explains how VF Corp. should return to excellent growth once it spins off its Wrangler and Lee brands.
  • The "Mad Money" host also hears from the CEO of Hasbro after earnings.
  • In the lightning round, Cramer blesses the stock of a cybersecurity giant.

Apparel maker VF Corp.'s recent earnings report may not have been a perfect quarter, but it was by no means a "lose-10-percent-of-your-value-in-a-single-day" quarter, CNBC's Jim Cramer said on Monday.

What really happened to make VF Corp.'s stock lose nearly 11 percent in a single trading day was the fact that the Vans and North Face parent reported earnings in the heart of a panic, setting off selling at any hint of weakness, he said.

"VF Corp. was a victim of great expectations," the "Mad Money" host told investors. "I think the stock is a bargain here, trading at less than 19 times next year's earnings estimates. The core of the growth story, the strength of Vans and direct-to-consumer, is still very much intact."

And the company's impending spin-offs of its underperforming denim brands, Wrangler and Lee, could unlock even more value for VF Corp., Cramer said.

"I'd be a buyer down here, as I think the stock has become a steal at these levels, certainly, and will return to excellent growth once it sheds the jeans and goes on in the rapidly expanding businesses that we like so much," he said.

Cold War 2.0?

Chinese President Xi Jinping and U.S. President Donald Trump attend a welcome ceremony at the Great Hall of the People in Beijing on November 9, 2017.
Fred Dufour | AFP | Getty Images
Chinese President Xi Jinping and U.S. President Donald Trump attend a welcome ceremony at the Great Hall of the People in Beijing on November 9, 2017.

Cramer worries that the escalating conflict between the United States and China over trade, with officials from the two countries continuing to trade barbs Monday, could have even more serious implications than many think.

If trade talks abruptly end, a distinct possibility considering both countries' increasingly tense exchanges, "we better get used to some serious collateral damage" to the stock market, he said.

He noted that referring to China's government as the "Chinese Communist Party," as top White House economic advisor Larry Kudlow did in a Sunday interview with the Financial Times, could mean that the Trump administration is souring on reaching any kind of business deal with China.

"I think the president wants the economic equivalent of regime change," Cramer said. "Yep, not an economic war, but a cold war, with the Chinese once again playing the pre-Nixon role of worldwide nemesis. Needless to say, that is not what Wall Street wants to see."

Click here to read Cramer's full analysis on how another cold war could hit stocks.

Hasbro CEO after earnings: Tariffs out, esports in

Brian Goldner, CEO of Hasbro featured on Mad Money with Jim Cramer on May 10, 2016.
Ashlee Espinal | CNBC
Brian Goldner, CEO of Hasbro featured on Mad Money with Jim Cramer on May 10, 2016.

Hasbro's CEO does not expect anything serious to come from the United States' trade dispute with China, he told Cramer in a Monday interview.

"I, thus far, have heard, in working with the administration, that we are being a good actor and a good player and we expect that business will be fine coming out of China," Brian Goldner, also the toymaker's chairman, said on "Mad Money." "Go[ing] forward, we don't expect to see any major tariff situation."

Even so, Hasbro has been moving production out of China, the CEO said. The company has moved manufacturing operations for 25 percent of its revenue-generating products, including Play-Doh, back to the United States, he said.

Click here to read more about Goldner's take on tariffs and to watch his full interview.

Also in focus at Hasbro are esports, particularly Fortnite, around which the company is creating some new products. Click here for more on the toymaker's push into digital gaming.

Off the charts: Big Blue back in the game?

Pedestrians walk in front of the IBM building in New York.
Scott Mlyn | CNBC
Pedestrians walk in front of the IBM building in New York.

Cramer and legendary technician Larry Williams say shares of IBM, an old-line technology giant that has transitioned its business to the cloud, could be ready to rally even after the company's disappointing earnings report.

Last Tuesday, IBM missed analysts' revenue predictions in its third-quarter earnings report, with overall revenue declining 2 percent year over year and some of its faster-growing sections underperforming.

IBM's stock shed as much as 5 percent in response to the report. Now, shares of the company are near levels not seen since January 2016.

But according to Williams, who has traded futures, commodities and stocks for over 50 years, written 11 books, created numerous technical indicators and runs IReallyTrade.com, IBM's stock has some key technical trends working in its favor.

Click here to read Williams' full breakdown.

Fed Chair Powell 'like a horserace with blinkers on'

Federal Reserve Chairman Jerome Powell holds a news conference following a two-day Federal Open Market Committee (FOMC) policy meeting in Washington, September 26, 2018. 
Al Drago | Reuters
Federal Reserve Chairman Jerome Powell holds a news conference following a two-day Federal Open Market Committee (FOMC) policy meeting in Washington, September 26, 2018. 

The troubling signs in the stock market — rallies in recession-era favorites like utilities and retailers and breakdowns in economically sensitive stocks tied to construction and housing — are all but lost on the Federal Reserve, Cramer argued Monday.

"When I scrutinize the charts of, say, Weyerhaeuser, Vulcan Materials, Martin Marietta Materials, U.S. Concrete, Home Depot, Terex, United Rentals, Mohawk, PPG [and] dozens of others that are involved in the construction ... of housing in particular, it screams 'slowdown,'" Cramer said. "Yet I honestly believe that if Fed chief Jerome Powell looked at these stocks, it might mean nothing to him."

"He's becoming like a racehorse with blinkers on," Cramer continued.

Click here to find out why Cramer's so worried.

Lightning round: Feeling secure with PANW?

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

Palo Alto Networks Inc.: "We're a buyer of it for ActionAlerts. Why? Because, if you take a look, there was an article today about Facebook wanting to get into security. I think everybody wants to get into security and Palo Alto's the best. The chart's bad — enough already."

Albemarle Corp.: "It's a great opportunity. There's just a lot of good chemicals within that one and it has held up much better than everybody else."

Disclosure: Cramer's charitable trust owns shares of Palo Alto Networks and Facebook.

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