More and more Democratic presidential hopefuls are adopting a single-payer health care stance, which could be devastating for any player in the health insurance business, CNBC's Jim Cramer said Monday.
Following the lead of Bernie Sanders, the independent Vermont senator who is one of the biggest mouthpieces advocating for "Medicare for All," about eight candidates in the Democratic Party's crowded field support the idea in some form, Cramer noted. People may not be willing to pay for policies offered by UnitedHealth Group, the largest player in the space, and other firms if they are eligible for Medicare, he said.
"So that's what's at stake here: 'Medicare for All' versus a problematic system that has allowed UNH, Anthem, Humana, and the now-acquired Cigna and Aetna to make fortunes," the "Mad Money" host said. "Those stocks have all been terrific performers since Obamacare went into law."
While there are some good reasons out there for a single-payer system, Wall Street knows it would hurt the current state of the industry, Cramer said. Still, there is not unified support for the program among centrist Democrats as there is in the left-wing faction.
But health care companies are growing more defensive as "Medicare for All" has become more popular among some voters. Health care investors worry that a wave election could give the White House to one of the more left-wing Democratic candidates, and that the party would win majorities in both the House and the Senate.
Cramer pointed out how UnitedHealth Group's stock tumbled from $246 to nearly $208 after Sanders, who is vying for the Democratic nomination to take on President Donald Trump in 2020, laid out his universal health-care plan earlier this month.
The worst-case scenario for UnitedHealth, Cramer said, is that the stock could collapse to $145.
The stock has since mustered back above $237 since reporting a profit beat in the first quarter and raising its 2019 earnings forecast nearly two weeks ago.
"Honestly, if UNH pulls back to post-earnings low, though, around $208, you know what, I'd say start buying. And then 10 percent below, I bet it bottoms. I think that's gonna turn out to be a fantastic investment," Cramer said. "Unless you believe Elizabeth Warren or Bernie Sanders will win the nomination and then take the White House ... I'm betting the managed care stocks will end up doing just fine."
"I say stop the panic. These stocks may be closer to a bottom than Wall Street thinks."
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Cramer said it's "counterproductive" for stocks to rally into an earnings report. He pointed to Alphabet, among other stocks, to illustrate his case.
"A gentle dip ahead of earnings can be the best vaccination against a sell-off," he said. When stocks, like Google's parent, come in too hot, "that's like a jet landing on an aircraft carrier that can often miss the decks and end up getting obliterated, as 3M did last week and Alphabet has done this very night."
After reaching a new high of $1,296.97 in the session, shares of Alphabet plummeted nearly 8% in after-hours trading. The tech giant reported a first quarter earnings beat of $11.90 per share, compared with the expected $10.61. But, reported revenue of $36.34 billion fell below analysts' projections of $37.33 billion.
Ahead of Monday's close, the stock had run up nearly 10% in April. Cramer called it a "horrendous set up."
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Cramer took another look at the best stocks to play the years-long global rollout of the next generation of wireless technology.
In February, he declared that Skyworks Solutions, Intel, Qualcomm, Broadcom, and Xilinx were the top five semiconductor companies that stand to benefit from the building of 5G infrastructure. Nearly three months later, he reevaluated their movements and offered an updated outlook for each stock.
"If you want to play the 5G rollout, or any other huge secular trend, you need to keep doing the homework," the host said. "You gotta keep finding the right stocks, which is exactly why I'm trying to keep you up to date on this story."
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3M has adopted a more aggressive playbook to mitigate the challenges it faced during the first three months of 2019, CEO Michael Roman told CNBC.
"We were behind the curve in what we were doing to take costs down in Q1," he said in a one-on-one interview with Cramer. "The actions we're taking now get us ahead of that curve. That's what we're executing: Get ahead of the curve."
Roman blamed challenges in China as well as in the automotive and electronics sectors for the manufacturing giant's weak first quarter earnings. About 30% of the company's revenue comes from those three segments and management is "disappointed" by the top and bottom line misses, he said.
Organic sales declined 1.1% year-over-year in the quarter.
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Cramer takes a look at the charts as interpreted by Mark Sebastian, founder of OptionPit.com and a Cramer colleague at RealMoney.com. Sebastian thinks there could be a modest pullback in the near future, but there's nothing to worry about in the long-term action on the CBOE Volatility Index.
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In Cramer's lightning round, the "Mad Money" host zips through his thoughts about callers' favorite stock picks of the day.
Entergy Corp.: "Entergy's terrific. It's been a big winner. I think it continues to win. I like that company very much."
Novocure Ltd.: "Novocure is a good company. I don't understand why it's independent. I think that one of these big drug companies or device companies should just go buy it, 'cause it's got great technology. And the technology works."
Marathon Petroleum Corp.: "Best of the best. Company really knows what it's doing. Inexpensive. We got a big upgrade on some of the others today, and I think that this is still my fave."
Disclosure: Cramer's charitable trust owns shares of UnitedHealth Group and Alphabet.