Mad Money w/ Jim Cramer 02/06/25

Summary

Mad Money with Jim Cramer: Episode Summary (February 6, 2025)

Release Date: February 7, 2025
Host: Jim Cramer, CNBC
Podcast: Mad Money w/ Jim Cramer

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Jim Cramer dives deep into the financial landscape of early 2025, spotlighting both established giants and emerging players outside the traditional tech sphere. This episode is packed with insightful analyses, candid discussions with industry CEOs, and an engaging lightning round where Cramer shares his latest stock recommendations.

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Market Overview and Quiet Winners

Jim opens the show by lamenting the lack of transparency in current market leadership, emphasizing that many top performers are "unsung heroes" diverging from the usual tech-centric Magnificent Seven (02:06:25). He highlights that when major indices like The Dow and NASDAQ show mixed results, it's often these lesser-known companies driving the gains.

Key Highlights:

• 3M: Once a market leader, 3M faces challenges from enduring lawsuits related to forever chemicals. However, with new leadership under CEO Bill Brown, Cramer anticipates a resurgence reminiscent of the company's illustrious past (00:31).

  "I await the innovations that will remind me of the halcyon days when this company used to be known as Minnesota Mining and Manufacturing." (00:31)

• J.P. Morgan: Cramer underscores the bank's undervaluation, noting its comprehensive services from M&A to IPOs. At 14 times earnings, he believes it's poised to grow to over 20 times earnings.

  "JP Morgan could trade up to more than 20 times earnings." (02:06:25)

• IBM: Transitioning from hardware to a software-centric model, IBM's integration of Red Hat and the spin-off of its IT infrastructure business have stabilized its earnings. Cramer praises the company's pivot towards recurring revenue streams.

• Goldman Sachs: With anticipated rebounds in M&A activities and IPOs under less stringent regulations, Goldman’s current valuation of 14 times earnings is seen as a bargain.

  "That's ridiculously low given this company's about to have its strongest moment in years." (02:06:25)

• Amgen: Despite its robust portfolio of blockbuster drugs like Isupril and the upcoming Maritime weight loss drug, Amgen remains undervalued at nearly 14 times earnings. The once overshadowed company is gaining traction as new products hit the market.

• Wal-Mart and Visa: While Wal-Mart continues to thrive as an inflation hedge with its expansive product range, Visa and MasterCard remain stalwarts in the payment networks space, benefiting from the growing buy-now-pay-later trend.

• Amazon: Reporting a strong year-over-year sales increase of 10%, Amazon's stock faces slight after-hours declines due to conservative guidance and high capital expenditure forecasts. Cramer views the pullback as a potential buying opportunity.

• Travel Sector: Companies like Hilton and XPD demonstrate remarkable growth, with American Express also standing out as the 9th best performer of the year.

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In-Depth Conversations with CEOs

1. David Bouzouki on Roblox's Stock Dip (09:01 - 21:03)
Roblox experiences an 11% stock drop despite a 30% year-to-date increase. Cramer engages with David Bouzouki, the founder and CEO, to dissect the reasons:

• Revenue and Growth: Roblox reported 32% year-over-year revenue growth and substantial bookings in key markets like India and Japan.

  "We exited December once again, 25% year on year, bookings, growth." (14:24)

• Safety and Community: Emphasizing the platform's commitment to safety, especially for young users, Bouzouki outlines over 40 safety innovations and the use of AI to enhance user experience.

  "We think safety, civility, and transparency across all media platforms are our top priority." (18:01)

• Future Prospects: With partnerships like Shopify, Roblox is venturing into immersive 3D shopping experiences, reflecting a strategic expansion beyond gaming.

  "We're focusing on this long-term vision that immersive 3D is a new way for people to come together." (19:24)

Cramer concludes that Roblox's dip presents a buying opportunity, reaffirming his bullish stance.

2. Tarang Amin on Elf Beauty's Struggles (29:35 - 37:43)
Elf Beauty faces challenges as its stock tumbles 11% post-earnings:

• Sales Performance: While net sales growth remains robust at 31%, January saw softer results due to post-promotional hangovers and reduced social media engagement amidst external distractions like wildfires.

  "We still built 90 basis points of market share." (37:02)

• International Expansion: Elf Beauty's international sales surged 66% year-over-year, with strong performances in new markets like Germany and Italy, positioning the company for sustained growth.

  "We're the number one unit share brand in the U.S. and number two in dollar share." (34:19)

• Operational Efficiency: Despite tariff challenges, Elf Beauty maintains an incredible price umbrella, effectively managing costs through strategic pricing and supplier diversification.

  "We've been facing 25% tariffs since 2019, and we use a very balanced plan." (33:22)

Amin remains optimistic about Elf Beauty's trajectory, emphasizing strategic product launches and market expansions.

3. Chris Swift on The Hartford's Performance (22:15 - 29:07)
Cramer discusses The Hartford's recent achievements and strategic branding with CEO Chris Swift:

• Financial Growth: The Hartford has nearly doubled its earnings per share over five years, leveraging higher premiums and strategic investments in the bond market.

  "This company's nearly doubled its earnings per share over the past five years." (22:15)

• Brand Modernization: The Hartford unveils a modernized logo, reflecting its evolution into a growth-oriented and innovative company while honoring its 215-year legacy.

  "We're becoming a more growth and innovative orientated company." (23:40)

• Risk Management: Emphasizing prudence, The Hartford has strategically ceased writing new homeowner business in high-risk areas like California, advocating for policy reforms to address escalating risks.

  "In February of 24, we stopped writing new homeowners business in California." (26:09)

Swift highlights The Hartford's commitment to maintaining robust underwriting standards and fostering a team-oriented, equitable culture.

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Lightning Round Stock Recommendations (38:00 - 42:57)

Jim Cramer wraps up the episode with his signature lightning round, offering quick buy, sell, and hold opinions on various stocks:

• Terra Energy (Timestamp: 38:33):
  Buy – Cramer approves of Terra Energy as a growth utility despite its modest yield, commending its strategic positioning.

• Fastly:
  Sell – Despite financial improvements, Cramer remains skeptical due to consistent quarterly misses, recommending alternatives like Cloudflare.

• Danaher:
  Sell – Disappointed with Danaher’s recent performance and executive demeanor, Cramer advises against holding the stock.

• IESC (Jeffrey Gandel's Company):
  Buy – Praising CEO Jeffrey Gandel's leadership, Cramer endorses IESC as a promising investment opportunity.

• Schlumberger:
  Hold/Sell – Recognizing its strong operations but advising caution due to market positioning, Cramer refrains from recommending a buy.

• A10 Networks:
  Hold/Sell – Despite strong earnings, Cramer cautions against parabolic stock movements, suggesting a wait-and-see approach.

Cramer emphasizes the importance of staying informed through interviews and continuous analysis to make informed investment decisions.

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Additional Insights

Towards the episode's conclusion, Jim Cramer reflects on recent interviews with CEOs of Honeywell and ARM Holdings, addressing market overreactions and the critical need for accurate information:

• Honeywell:
  Cramer critiques the market's rapid response to Honeywell's business split, highlighting the long-term strategic benefits despite short-term volatility.

• ARM Holdings:
  Addressing misconceptions, Cramer explains ARM's strategic partnerships, particularly with Nvidia, and clarifies the company's resilience in the evolving tech landscape.

  "They just can't talk about it because they're in a quiet period." (43:12)

Cramer underscores the value of comprehensive interviews for a nuanced understanding of company dynamics, urging investors to engage deeply with expert analyses.

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Conclusion

This episode of Mad Money serves as a compass for investors navigating the complexities of a shifting market. From undervalued financial giants to resilient beauty brands and innovative tech platforms, Jim Cramer provides a wealth of knowledge, strategic insights, and actionable advice to empower listeners in making informed investment choices.

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Notable Quotes:

• "I await the innovations that will remind me of the halcyon days when this company used to be known as Minnesota Mining and Manufacturing." – Jim Cramer on 3M (00:31)

• "JP Morgan could trade up to more than 20 times earnings." – Jim Cramer on J.P. Morgan (02:06:25)

• "We think safety, civility, and transparency across all media platforms are our top priority." – David Bouzouki on Roblox (18:01)

• "We're becoming a more growth and innovative orientated company." – Chris Swift on The Hartford (23:40)

• "It's our top priority." – Tarang Amin on Elf Beauty's safety measures (19:07)

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This comprehensive summary encapsulates the key discussions, insights, and strategic evaluations presented in the February 6, 2025 episode of Mad Money, offering listeners a detailed overview of the financial narratives shaping the early part of the year.

Transcript

[Jim Cramer]

Meet Venu on the NYSE American Symbol Venu Disrupting a multi billion dollar live music industry. Venu owns and operates upscale music venues.

[Tarang Amin]

Outdoor amphitheaters with seven revenue sources $166.

[Jim Cramer]

Million in assets Luxury suite sales of $77 million in 2024 $200 million expected in 2025 56% year over year Growth venue on the NYSE American Venu when.

[American Express Representative]

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[Chris Swift]

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[American Express Representative]

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[Chris Swift]

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[American Express Representative]

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[Jim Cramer]

Terms apply.

[Chris Swift]

Learn [e-mail] AmExBusiness.

[Jim Cramer]

My mission is simple to make you money. I'm here to level the playing field for all investors. There's always a mo market somewhere and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Monday. Welcome to Kramerica. I do my friends, I'm just trying to make you a little money. My job is not just to educate, but to teach you and entertain. So call me at 1-800-743- CNBC. Tweet me jim Cramer. I gotta tell you, we got some real strange leadership this year. When you look at the quiet winners of 2025, the ones that don't belong to the Magnificent Seven, the ones that are unsung even as they got us where we are so far this year, it's a real low key hodgepodge. Some are from yesteryear, others are invisible. So others go up incrementally. But you never think of them. They are the exact opposite of the giant stocks that we've gotten used to talking about every day. So on a day when The Dow dipped 126 points has to be advanced point three and NASDAQ actually gained point five one percent. Why don't we take a gander at which stocks have led the Dow Jones Industrial Average higher? Because it's the biggest and most visible index stock with story companies that often don't get much airplay and very representative of what might be the new old leadership. Well, let's start with the year's biggest winner so far, 3M. This once fabulous conglomerate used to have new products that either created entire markets out of nothing or beating comments became leaders. But then 3M got caught up in forever chemical lawsuits that wouldn't go away. I was appalled by the way the disclosure of these because they were buried in footnotes when a former CEO retired. Then the new CEO Mike Roman came in, he inherited those lawsuits. They consumed his reign. He managed to settle what looks to be all the major ones. Announced the spin off of 3M's health care division as Solventum in 2022. Now, I actually kind of wish he hadn't done that because that was a great business. But I was glad he took away the existential risk to this story company now, In May of 24, Bill Brown, former CEO of L3Harris, took over 3M. This guy's known as an incredibly tough hombre. A guy who's in a hurry to get things done. I think that the old three and one that my father once worked for is back. I await the innovations that will remind me of the halcyon days when this company used to be known as Minnesota Mining and Manufacturing. In the meantime, Wall Street's getting reacquainted with 3M and the market increasingly likes what it seems. I know. I got to tell you, I think it's terrific. Now, second, second, there's JP Morgan. JP Morgan stock is way too cheap, people at 14 times earnings. This is the premier bank of our time, for heaven's sake. J.P. morgan has been. It's got the biggest M and A bin, IPO businesses, it's got lending. It does everything. When you put it all together, it does very, very well in a slow rate cut environment, exactly what we have now. I think JP Morgan could trade up to more than 20 times earnings. Now of course, there are other banks that have single big practices. Goldman has the biggest M and I. Stay with me on that. But when you put them all together, it's JP Morgan. And to get that for 14 times earnings makes no sense in the world to me. Next, IBM. All right, this one's a bit of a shocker. Many missed it coming. What you had to be watching with the integration of Red Hat, a powerful enterprise software platform. But a few years ago, the spin off of their old IT infrastructure business as Kyndryl, and the conversion of a once big, big hardware company into one that gets more than 40% of its business from recurring software revenue. Those moves have transformed IBM to a company with much more consistent earnings. And Wall Street's always willing to pay up for consistency. Most investors had left this one for dead. Did die in fourth. Another banker, the one I just mentioned being great in M and A, also IPOs. It's Goldman. Goldman is the Prometheus unbound. Under the previous president, Goldman's most lucrative business, M and A went fallow tied to a rock with an eagle eaten away its liver Every day. That's Prometheus, but that's a kind of Greek mythology figure. Now, the eagle here is Linda Khan. She's the former FTC chair. Now, though, traders are betting that mergers are back and Goldman will have a huge spike in business. Meanwhile, with less regulation under Trump, we're also likely to get more IPOs. That's also great for Goldman, but the stock trades at a meager 14 times earnings. That's ridiculously low given this company's about to have its strongest moment in years. It's why we have been buying aggressively for the trust, which you can follow by becoming a member of the CNBC investing club. The fact is, it's been ages since people thought of Goldman or JP Morgan as growth stocks. The Biden administration was not exactly a friend of the financial industry. For better or worse, they no longer have to worry incessantly about the FCC or the FTC or the Justice Department. Those days are now over. And you can see it from the strength in their stocks. That's what's propelling it. Fifth is Amgen. And this, this one has so many blockbuster drugs, I think it's absurd that the stock once again sells for nearly 14 times earnings. The flagship drug is is replica, which is the best medicine to lower cholesterol. They have studies showing that any amount of cholesterol is bad, so the sales just keep going higher and higher. Why isn't Amgen better known? I think it's because people don't know about its amazing anti cancer franchise. When the company brings its weight loss drug Maritime to market, I bet that people will finally sit up and take notice. In fact, many including people have already spotted it, hence the recent gains. Maritime looks like it helped you lose weight as much as the majors. But unlike Ozempic or Manjaro, it's only requires once a month injection instead of once a week. Nobody wants more injections when they have. When they can have fewer. Number six, Wal Mart. Okay, well this one isn't hitting all right. Everyone knows them as an inflation fighter. A company with cheap quality private label goods and surprising great clothing department. My daughter outfits herself from Wal Mart and claims that you could see buy plenty of stuff. They're similar to what they were Madison Avenue. Ten times the price of Madison Avenue. Here's one that drives me crazy. Visa this stock and stopped gang or MasterCard run payment networks that take no risk and make billions. Everyone wants to buy now, pay later. That's what they want, right? You want to buy now, pay later outfits. Look, a firm is up A lot. Not tonight. It's a great company but a lot of people I think the big institutions want the colossus, they want the kings, the credit card companies that can do no wrong with no risk and that are those are Visa and MasterCard. Next up, Amazon. Now they reported a really great number tonight. Better than expected. Sales up 10% year over year. Monster 37 cent beat off a $49 basis. Top line beat was driven by the core e commerce business with the company calling this past holiday season the most successful yet for Amazon. But all three of the company's segments beat operating income expectations for the quarter. The stocks trading lower in after hours though, in part because the company's business missed revenue expectations in the quarter. Mostly because the company guided very conservatively though for the current quarter and had a large capex guide for the year ahead. Just like Alphabet on Tuesday. But we'll caution that the first quarter forecast includes a big headwind for the adverse foreign exchanges exchange changes which we don't think should necessarily be held against Amazon. But let's remember, I mean even with tonight's fairly meaningful pullback, the stocks are only giving up about three weeks weeks of gains. We'll be thinking about it as a buying opportunity in a few weeks. But I will tell you, like the other magic seven, it's not where the action is. Finally, travel is the number one theme in this country. Hotels just won't quit. This morning, Hilton announced a true blowout quarter. XPD gave you a monster quarter this evening. It's one after another after another. But the best ones, American express. It's the 9th best performer of the year. It fits the bill for 2025 after a fabulous last quarter. Finally a newbie added to the index. Sherwin Williams. Little odd here, Pink company. This one's a tough. It's tough. I don't get it's housing slowed 7% mortgages. I'm honestly shocked. The stock so high. Still, it's not a tech stock, it's not a Mag 7. In fact, it's a quintessential not tech stock. Maybe that's why it's there. Bottom line. So far this year we've had many very big winners outside of tech and I bet most of them can keep quietly working their way higher. Let's go to James in Connecticut. James.

[David Bouzouki]

Hi Jim. Thanks for taking my call.

[Jim Cramer]

Of course.

[David Bouzouki]

Is it too late to buy Banco Santander?

[Jim Cramer]

No, Banco Santander is very inexpensive still and is doing a great job. Now admittedly I did like it of 3 and 4. I know I just endlessly pounded the table. But at 5, I still think it's a great sit. Oh, my old friend Trey in Texas. Trey.

[Trey]

Jim. I can't believe it's been five years and I'm still wearing this darn mask. See, the thing is, when I got my boxer PUPPY in early 2020, it.

[David Bouzouki]

Was love at first sight.

[Trey]

But I had no idea his natural gas production would rival that of Exxon. I've had to repaint the walls in my house a few times. But on that note, I know you're bullish on lng, and since you're the guest, so am I.

[Jim Cramer]

Absolutely.

[Trey]

Question is, is Exxon the goat in the O and G space?

[Jim Cramer]

No, it's not. And I, you know, look, frankly, I'd rather see in Chevron if you could do that. Sorry about your dog. I wish I had something for. For the dog. I'm trying to think. I mean, maybe Zoetis has something I don't. Can doesn't come to mind. But no, we want to stay away from Exxon trade. It's just, it's. It's not where the action is. Let's go to David, also in Texas. David.

[James]

Jimmy, chill.

[Jim Cramer]

Yo, yo.

[David Bouzouki]

On behalf of all NFL fans that aren't kc. Fly, Eagles, fly.

[Jim Cramer]

You bet. Go Birds. What's up?

[David Bouzouki]

All right, so my stock has been a dog since August. Is there any hope left for Intel?

[Jim Cramer]

You know what, look, intel does have a very good CFO. Now CEO, one of two CEOs. I wouldn't bet with it. I wouldn't bet against it. I think it is a great institution, but I don't want to be in the stock. All right, now look, this year, surprise, we had a lot of winners outside of tech. And the one that we have in the top, well, just Amazon disappointed tonight, but I do think the others can keep winning. And that's where you want to be right now On Man Money tonight, shares of gaming stock Roblox fell on some missed estimates and softer than expected guidance. I'm thinking of the decline with the CEO. Then how could rates and recent natural disasters affect the insurance landscape? I'm learning more from the Hartford's top brass. And later, ELF Beauty is on the move after earnings, but not in the right direction. Stable Kramer.

[Unknown Host]

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[Chris Swift]

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[Jim Cramer]

All right, what the heck just happened to the stock of Roadblocks? That's the online gaming and game creation platform that's ridiculously popular for kids. After roaring higher since last spring, the stock stumbled at it, down 11% reported what I guess some people thinks is a mixed quarter. Although Roblox delivered a revenue beat, its bookings and daily active users fell short of expectations and their guidance came in a little light. But is that really enough to justify the stock's 11% drop today? Given that Roblox was up 30% year to date going the quarter, I think this one simply came in too hot. So you get a better entry point here. Is there more to worry about? Let's take a close look with David Bouzouki, oh, friend of the show, the founder and chairman CEO of Roblox to find out. Mr. Brazilian, welcome back to bed, buddy.

[James]

Jim, thanks for having me on. It's great to be here with you.

[Jim Cramer]

Well, I've got to tell you, you know, having looked at all the other gaming companies, the video game companies coming in, just to be sure it yours is just going much really great. Gangbusters versus everybody else. So I want to know when you share my view that perhaps your stock was up so much that people then sold it down.

[James]

Hey, I think, Jim, the last time we talked, we shared an ambitious vision to get 10% of all gaming content in the world running Ron Roblox. That's $187 billion market this quarter. We just showed we're well on the way to doing that. You know, revenue growth, 32% year on year, exiting December bookings, 25% up year on year. India, which is a huge market, and Japan, which is a huge gaming market, but with over 50% year on year. Both daily active uniques as well as ours and Cash, which you and I, I think, are both fans of. In 2024, $640 million of free cash flow, that's up 5x as well as all kinds of great content on the platform. So we felt it was a stellar quarter.

[Jim Cramer]

All right, so look, let's just play with the Bears. What they're saying. The daily average users were up 19%. There are people who are looking to say 22%. Now, is that something we should be concerned about?

[James]

Hey, we beat every single guidance number we shared. And we beat by a big amount, our cash number as well. We exited December once again, 25% year on year, bookings, growth. We have, There's a huge market out there. We, we saw NFL Universe, which is a fully licensed sports game, show up on Roblox and get in the top 25. We saw SpongeBob hit the top 25. We're only hitting 2.34% of the total gaming market space on Roblox. That's a lot of room. And when we get into brand integrations, five of the top 10 grossing movies in 2024 did Roblox brand immersive experiences including Beetlejuice and Wicked.

[Jim Cramer]

All right, well, those are all Wicked was really red hot. Now I Want to know, 24 hours from now, Dave, I'm going to be in New Orleans. I understand that you too are in New Orleans in a way with the inaugural super bowl event. What is that going to mean?

[James]

Oh, well, I know all. Almost every sports league is coming to Roblox. It's where all the people are. In addition to the NFL, we're seeing NBA and other experiences. So our NFL universe has a lot of people starting to experience that on Roblox side by side that Mr. Beast came to Roblox. You know, Beast Games is in real life on some various streaming platforms. The virtual version of Beast Games is on Roblox. So it's, it's all across. Not just sports, but immersive gaming as well.

[Jim Cramer]

Could you possibly team with the President United states and buy TikTok?

[James]

Well, hey, I want to share one thing about Roblox that we're really interested in. Safety, civility and transparency. Our creators on Roadblocks really want to know how we do search, how we do discovery. Is it fair and is it transparent? I am interested in safety, civility and transparency across all media platforms.

[Jim Cramer]

Okay, now let's bring that. You bring it up. So I have to go there. Hindenburg is a tough outfit now. They no longer they dissolve. But Nate Anderson is trying to do what is right. And I know that there were things that he found. It does seem like you've taken it very seriously. You've had guardrails use AI. You do everything you can to be sure that the people who are bad do not get near roadblocks in the kids. But it must be constant. You have to work against these people.

[James]

Yeah, I mean, we take everything really seriously in this domain. I've got four kids, they were on Roblox. My niece and nephew are probably playing Roblox right now. All of our many of our employees have kids. So we take this very, very seriously. We shipped over 40 safety innovations this year. We've been using AI to really take our safety and civility to a higher level for the last four years. And we don't just think about under 13 year olds. We think about every single user on our platform. Voice communication, text communication, the experiences they're in. It's really our top priority.

[Jim Cramer]

I know it is. I also. Another priority you have is to help small business. And I think this team up with Shopify is not being talked about enough because that is a really great opportunity for people to build a business that they might otherwise dream that they could do but never be able to do it.

[James]

Yeah. Take a step back and well, there is a lot of fun. Jim, if you and I were to go shopping in the mall and buy clothes together, that'd be a lot of fun.

[Jim Cramer]

Right.

[James]

Like people are. Yeah, people are starting to experiment not just with shopping by yourself, but thinking about 3D shopping with friends. We have experiences on our platform now that are making more money with Shopify than other forms of either freemium payments or whatever. So we think this is a huge opportunity.

[Jim Cramer]

Have you ever talked to Mark Zuckerberg about doing that? You know, he was hoping one day to have the virtual mall be just like that. And it really hasn't happened.

[James]

It's still early. Like, Shopify is a new experiment for us, but we really are focused on this long term vision that immersive 3D is a new way for people to come together with safety and civility. And it's not just for gaming. It can be for shopping. It can be for learning physics at school. School. It can be talking to a virtual George Washington to learn history. It can be going to a concert. So even though we're shooting for 10% of the gaming content system, we believe there's more beyond that.

[Jim Cramer]

Well, I think people are finally getting their chance. You know, Dave, I always try to tell people when a company does well, but there's one of these little glitches and a stock gets crushed. That's your only chance. It's so hard to get into your stock. This is the moment to buy Roadblocks. I sincerely believe that, and I'm glad you came on, because that convinces me that I am right. So I want to thank David Bouzucki found CEO of Roblox. Hey, buy TikTok. It'd be better if you had it.

[James]

Thank you, Jim.

[Jim Cramer]

Great to be here. Oh, great to see you, dude. Thank you, man. Buddy's back there for the break.

[Unknown Host]

Coming up, hot off a new logo redesign. Kramer's getting a read on the insurance space and interest rates with the CEO of the Hartford Next.

[American Express Representative]

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[Jim Cramer]

The last few years have been phenomenal for the insurance industry and a tremendous pricing power leading to, of course, higher premiums. And they've been able to invest those premiums in the bond market for some excellent returns. Take the Hartford Insurance Group. Known by most people as the Hartford. It's a major player in property and housing insurance, group benefits, mutual funds, but whole lot of other stuff. Here's a stock that ramped 19 at the COVID lows all the way to nearly 125 last November. It's pulled back to 113. I like this level. This company's nearly doubled its earnings per share over the past five years. But with interest rates expected to come down this year, can the stock keep climbing? Is that really the metric? Last week, the Hartford reported what I thought was an excellent quarter with a big earnings beat thanks to lower than expected catastrophic losses. However, the company had a larger than expected reserve charge that spooked investors. Sent the stock down 2% the next day. I always think reserve charge is a great way to judge whether somebody's being prudent. And today the Hartford rang the closing bell here at the New York Stock Exchange celebrated fresh brand with a modernized version of the iconic Stag logo. And I think this business is very strong. Don't take it from me. Let's take it with Chris Swift. He's the chairman CEO of the Hartford. To learn more business with me money.

[Unknown Guest]

It's great to be here with you, Jim.

[Jim Cramer]

I have followed your career since you took over the Hartford and it's, it's amazing. I mean, it can't be just timing. Nobody's that lucky. I mean, you're good. Could you please explain to us, first of all, I want to know about the Stag, but I also want to know what you decided to do because your company is crushing it.

[Unknown Guest]

Well, you know, it's a team effort, first off, so, you know, I appreciate the, the acknowledgement that the team is performing at a high level. Now we're here today, you know, rolling out our new brand. You know, we're becoming a more growth and innovative orientated company. We're trying to be in tune with customer needs more and we want the brand to keep up with that. Really what we're trying to do with the brand is make it much more digitally orientated, changing the color a little bit, be able to use components and, but still honor the rich history. And you know, our, our brand goes back almost 215 years. It's really based on trust, stability, well. But confidence. So there's a lot the power of the brand. We just want it a little bit more modernized.

[Jim Cramer]

Okay. This is important for people because you have some personal lines and that's great. But the two things that are mostly hidden from individuals that are really matter. Group benefits. We know that somebody does it turns out to be you a lot of times. And then commercial lines with people don't really understand. But you're the king of.

[Unknown Guest]

Well, I would say, you know, commercial lines are largest, most profitable business. It had an excellent year. Group top line, 9%.

[Jim Cramer]

That's very big for an insurance company.

[Unknown Guest]

It's very big, very good margins. Very consistent with 2023, which we guided to a little bit in 24. So that's a powerful business. And you of all people know our small business franchise is world class.

[Jim Cramer]

It's fantastic.

[Unknown Guest]

But we fill in a middle and large component, a specialty.

[Jim Cramer]

Right.

[Unknown Guest]

We do some international activities out of Lloyd's. So. And then the benefits business, it is really a gem. It's a diversifier. Our PNC businesses are exposed to property casualty benefits is basically life and mortality and morbidity. And you know, we're a six and a half billion dollar business number three in the country and a lot of people love doing business with.

[Jim Cramer]

Okay, so you're also prudent, which of course I like. And one of the things you're prudent about is people might say, well how about those wildfires you guys have been understanding of some places that may not merit writing anymore because they're just too dangerous. And you're a prudent person. You're prudent company.

[Unknown Guest]

Well, you're, you're, you're true. We've worked hard on improving our underwriting capabilities, particularly for all major perils which I put fire one of them, but only hurricane, tornado, flood, winter freeze, all of them.

[Jim Cramer]

You're not a climate denier, I know that.

[Unknown Guest]

No, it's real and we're reacting to it. But I think in California specifically, I'll just give you one data point. In February of 24, we stopped writing new homeowners business. We did because we didn't think we can earn an adequate risk adjusted return. California has had some policy issues, I would say in letting price and risk match up pretty well. So we talked pause and since then it's only gotten worse. And it's unfortunate that California needs some leadership right now between the governor, his insurance commissioner, legislature. They need real reforms fast or otherwise. People should come back in, Jim.

[Jim Cramer]

Right. People should think Twice about moving there. It's okay. I don't want you to be the arbiter of where people live. But at the same time, you can't be uninsured and live in a house that's ridiculous.

[Unknown Guest]

It is. Particularly in California where there's a lot of expensive homes and.

[Jim Cramer]

Right.

[Unknown Guest]

It's beautiful, but it hasn't. It hasn't from a policy side kept up with sort of modern ways.

[Jim Cramer]

Okay. You have been phenomenal for your shareholders. So then the question might be when we see the cpi, it does seem to be that insurance has been something that we haven't been able to keep up with in terms of the rating increases. Typically what happens is as those rates go up, new guys come in and say, wow, I can make a ton of money. Why is no one new coming in to go against you guys?

[Unknown Guest]

I would say there's been some new capital coming into property and cyber and financial lines. So yeah, over the last two or three years there's been some new cash, but there's been.

[Jim Cramer]

The rates are higher than they've been.

[Unknown Guest]

Well, I have always said it's still a good time to be a property casualty insurer. I think you can earn good returns prudently. You got to be an underwriters underwriter, Jim, which I know you know.

[Jim Cramer]

Oh, absolutely.

[Unknown Guest]

You got to select risk and certain areas you've got to just avoid.

[Jim Cramer]

Now, I do want to talk about your culture because I think that knowing you as a person outside of work, this is incredibly important to you. I also know that there's a lot of stuff about how DEI is closed down in some places. But I know that you're a person who understands the need to have a great team. What are you doing in this new era where it seems that there are a lot of people who go on across purposes to what I know you as a person are doing?

[Unknown Guest]

Well, yeah, I would say our culture is, I think, pretty special and unique. Yeah, we pride ourselves on being team orientated, equitable. We like many voices around the table with multiple ideas. We want empathetic people and leaders to relate to customers but also pick up and coach teams. So I don't care what you call it these days. I mean, we know what works for our culture. We know what attracts people, what keeps people in the organization. And I think from a shareholders perspective, I think shareholders like what we're doing. Given what we've done the last 10.

[Jim Cramer]

Years, I think they should. If they don't, I don't know what they want. I want to thank Chris Swift, Chairman CEO of the Hartford thank you. Chris.

[Unknown Guest]

What's going to happen to your Eagles Sunday?

[Jim Cramer]

I'm not worried. How about that?

[Unknown Guest]

Okay.

[Jim Cramer]

All right. Thank you very much, Chris. Get money back here for the break.

[Unknown Host]

Coming up, is beauty in the eye of the investor? Kramer sitting down with Elf Beauty CEO, fresh off the company's earnings report. Next.

[Jim Cramer]

Is the cosmetics market falling apart? I thought this was just an Estee Lauder problem, but after the close today, Elf Beauty turned in a distinctly suboptimal quarter and the stocks getting obliterated after hours trading. Elf has always had a great reputation for selling solid products at a significant discount to the high end stuff for a long time as one of the best growth stories out there. Last summer, the stock started rolling over on slowing growth worries. It's had a hard time stabilizing ever since. It was only up a few bucks from its 52 week low at the close and that was before the stock got pulverized in the wake of earnings. Speaking of numbers, Elf delivered a big top line beat, but a small earnings miss which would have been fine except management disclosed that January was softer than expected and they cut their forecast for the 2025 fiscal year pretty substantially. So what is happening here? Let's dig deeper with Tarang Amin, who's the chairman CEO of Elf Beauty to find out more about the quarter and what comes next. Mr. Me, welcome back to Mad Money.

[Tarang Amin]

Well, thank you for having me.

[Jim Cramer]

So training, I've got to tell you, I was a little, I have to admit, distressed because in your conference call tonight you talked about how frankly that January was not good. And I'm trying to get a sense of a softer January. What that may mean is is the entire industry not doing well because you're kind of joining Estee Lauder and saying that things aren't that good right now.

[Tarang Amin]

Well, first of all, I'm proud of our Q3 that we reported. We reported net sales growth of 31% over 220 basis points of market share gains and it was our 24th consecutive quarter of net sales growing above 20%. You're right, we did say that January was softer than we expected. We're seeing that across the industry and we really think there are three factors. One, the category experienced declines in January. Two, we're launching our biggest viral launch of 2024, our loop oils. I think I was on your show just last year as we were launching them. And then three are some of our a couple of our new products are off to a slow start, but it's still very early. I would say we still have marketing activations coming for those. Our shelf resets won't be complete until the end of February, including picking up major space at Target and Walgreens. So I remain bullish on the business. But our approach is always, we have a high degree of transparency. If we see something, we pass it through. And I think it's one of the reasons why we've consistently delivered.

[Jim Cramer]

Why would a category have this kind of decline? I mean, people don't suddenly just decide they. They're going to wear a lot less makeup. I'm confused.

[Tarang Amin]

Yeah. Well, I think there's two things that happen. One is the December period was highly promotional. Sometimes you have like this consumer hangover after they loaded up on a lot of product in December. Now we're not promotional. The industry was. And you sometimes have a trough after that. I think the second thing that happened in January is the social commentary was much less, I think down by almost 20%. And two things happened there. One, I think with the wildfires in L. A, people didn't want to be tone deaf of posting things while that devastation was going on. And so you also had a lot of uncertainty on TikTok. It seemed like the only thing people were posting on TikTok is would it stay open or wouldn't it? So we see, we see those things normalizing over time. We think the category is not nearly as promotional. That should help going forward. Same with social. Social really helps really propel new products. And we, we absolutely see that also increasing over time.

[Jim Cramer]

One of the reasons I have been enamored of your business is because you have the lowest price. But I don't think people can really tell the difference in quality. Obviously there are other people who disagree with that, but you do have a potential tariff problem. And I wanted to know if the president goes ahead with or steps up the tariff, at what point would it hurt your ability to be able to compete against some of these bigger companies that frankly do charge a great deal?

[Tarang Amin]

Well, we have an incredible price umbrella. If you look at our average Unit retails on ELF, they're $6.50 versus close to $10 for the legacy mass players and over $23 for prestige brands. And so the way I answer the tariff question is we've been facing 25% tariffs since 2019, and we use a very balanced plan. We, we selectively price one third of our SKUs up a dollar. We had cost savings, supplier concessions, affects moved in our favor. And this time around, it's just an additional 10 points. Right now we could use that same balanced plan. Plus we have greater supplier diversification and a much bigger international business. So I feel confident that we can maintain our extraordinary value and address tariff.

[Jim Cramer]

I glad you brought up the international. Your net sales grew 66% year over year. Now this could be a terrific way to offset whatever is weaker in the United States and obviously wouldn't have the tariff. How can you, how can you accelerate what the international business?

[Tarang Amin]

Well, we've been making great progress. As you mentioned. The quarter we were up 66% in international and we had strength both in our existing markets of the UK and Canada, as well as some of the recent markets we just entered. We entered back half of the year with Rossman in Germany, ATOS in the Netherlands, Douglas Italy and a number of other customers. And one of the things I'm really proud of is in all of those customers that we launched and we're already a top three brand. And so we're seeing pent up consumer demand for Elf. And our strategy is very much a disciplined, sequential rollout in additional countries. So we definitely see that as one of the major white spaces ahead. Along with color cosmetics, we're the number one unit share brand in the U.S. number two in dollar share with a clear line of sight to clear market leadership. We have two of the fastest growing skincare brands in Elf Skin and Atorium. A long way to go there. And our digital business continues to be quite strong.

[Jim Cramer]

Now the. I saw that you're in Dollar General now. I thought that was a little down. The Dollar General right next to me I like to go to, but a little down market versus where you've been before. But I guess they have a huge number of stores and I know that you do offer inexpensive cosmetics. How is that working out?

[Tarang Amin]

You know, that's been working out great. We entered a subset of their doors in the last quarter quarter and we've been really pleased with what we saw. And part of it is the strategy really aligns. Dollar General strategy is to serve the underserved. 80% of their stores are in rural areas with less than 20,000 people. Previously, those consumers only could get the legacy brands. Our ability to get the best of beauty at incredible prices is really resonating. So in fact, we're so happy with what we're seeing at Dollar General, we're going to expand in the next subset of doors this spring.

[Jim Cramer]

Wow. Okay, good. Because I know that that look, I think it's a great market because they keep putting up stores constantly. I do want to ask you about your marketing expense and what's necessary for higher sales growth. Would you have to start spending more if these trends from January continue?

[Tarang Amin]

Well, we're really satisfied with our marketing. We have marketing. ROI is well above industry benchmarks, multiples above industry benchmarks. It's been one of the ways we've been able to engage and entertain our community, how we're the number one brand amongst Gen Z, Gen Alpha millennials. So we feel great about marketing. I think, you know, we did debate should we spend a little bit more in marketing given how effective it is. But I think with this broader consumer macro, consumers being cautious, maybe a little bit worried about inflation, maybe worried about the economy, we thought, you know, let's, let's let the macro get a little bit better before we, we fuel even more marketing. But we love the marketing we're doing. We're constantly disrupting, we're constantly engaging consumers and, and like I said, it's really working well.

[Jim Cramer]

Last question. I do hope that it's too early, I guess to say it's only been a few days in February, but did the end of January get a little better as we got further from the fires?

[Tarang Amin]

You know, it did start getting better, particularly on the social commentary. I feel like, you know, we're still up against that big lip oil launch last year, but we'll face that from cycle to cycle. Overall, if you look at our back half of our fiscal year, we're still projecting 14 to 16% net sales growth on a category that's down 5% and we continue to build a ton of market share. Even in January, which was a weak month for us, we still built 90 basis points of market share. So I'm highly confident of our ability to drive industry leading growth and continue to take market share.

[Jim Cramer]

Excellent. That's Terry Amin is the CEO of Elf Beauty. Thank you so much. Good to see you, sir. Good to see you. Mad money's back.

[Unknown Host]

Coming up, Kramer takes your calls and the sky's the limit. It's a fast fire lightning round next.

[Jim Cramer]

It is time for the lightning round cruise runs. We're rap coast more the same asos the course not great access to my stampers will play this out and then the lightning round is over. Are you ready Ski daddy time the light round cruise over Tony in Florida. Tony. Hey Jim.

[David Bouzouki]

I just want to thank you and Jeff. I'm a loyal club member since day.

[Jim Cramer]

One and you make something funny and.

[David Bouzouki]

Interesting for us that don't know a lot about stocks.

[Jim Cramer]

All right. We're trying to get everybody to be better educated. I thank you for saying that. Want some more people joining the club? How can I help?

[David Bouzouki]

Yeah, I have a stock here that basically I pay to them every month and they're the top in renewable energy energy and everything. And they're a utility and give you a 3% dividend. I would like to stick with them since I've given them, like I said, money every month. What do you think about Terra Energy?

[Jim Cramer]

And I like them. I think it's good. I think it's a growth utility. I wish I had a little bit better yield but that's because the stock has moved so much. I think you've got a good one. Let's go to Ryan in Ohio. Ryan. Booyah, Jimbo, booyah. Hey brother.

[David Bouzouki]

I found a stock that looks good, fundamentally looks good financially. About to actually be cash flow positive. What are your thoughts on fastly?

[Jim Cramer]

No, I mean they've missed the quarter too often. If you want to be in that, you want to be in Cloudflare which just reported tonight Matthew Prince doing an absolutely terrific job. Let's go to Doug in Ohio.

[David Bouzouki]

Doug, good evening Jim, how are you?

[Jim Cramer]

I am good. How are you?

[David Bouzouki]

Good, thank you. I'm calling about danaher.

[Jim Cramer]

Danner's been bad for me. I've known the company for so long but that last quarter was terrible and frankly they were very smug on the call talking about how good it was and that was a very ill advised strategy that they adopted and I don't like it. Let's go to Ben in Wisconsin. Ben, what is up?

[Trey]

Mr. Kramer?

[Jim Cramer]

How's it going man? What's going on?

[David Bouzouki]

Good.

[Trey]

So I got a company I've been following for a while and I'd love to get your input. It's electrical, communications and infrastructure solutions provider that is a major beneficiary of the data center, build out and long term theme of the housing market shortage. It just reported another strong quarter of earnings. 20% revenue growth, 30% increase in operating income and 45% increase in EPS. It has a great management team making strategic acquisitions and it's starting to buy back share. The ticker symbol is iesc.

[Jim Cramer]

That's Jeffrey Gandel's company. He is just an amazing man. He's had a long history in understanding about this kind of business and I salute him. Gandel is a buy. Okay. That's the way I look at ies. It's Gandel and he's a winner. Let's go to Joe in New Jersey. Joe, hello Mr. Kramer. Thank you Joe, how you Been, of course.

[David Bouzouki]

And go Eat me.

[Jim Cramer]

Go Birds. Yeah. I've owned this stock in the past.

[David Bouzouki]

And I want to know if Schlumberger is a buy.

[Jim Cramer]

You know what? Look, it's the best house in a bad neighborhood, and we don't want to be in bad neighborhoods. And I'm so sorry. Really great company, but I don't want to recommend the stock. Let's go to Scott in Florida. Scott.

[David Bouzouki]

Hey, Jim. Big booyah from the Sunshine State.

[Jim Cramer]

Oh, thank you. What's happening?

[David Bouzouki]

Oh, not much. Longtime viewer club member, first time caller.

[Jim Cramer]

Oh, thank you. Thank you.

[David Bouzouki]

I've got a stock I've been in for a couple years now. I've been able to reap my core expenses out of it, and I've made some good money on it.

[Jim Cramer]

All right.

[David Bouzouki]

And I was getting ready to liquidate it on their last earnings report, and then I was on their conference call and they've got like over a billion dollars in back order, and it's a $3.6 billion company.

[Jim Cramer]

Interesting. Interesting. Go ahead. Which one is it?

[David Bouzouki]

You've seen their work. You've been to the Salesforce Tower out in San Francisco. Their company is Techno Glass.

[Jim Cramer]

Wow. That's theirs? I did not know that. And I did not know them. You know, I'm for the club. We've been buying Home Depot every chance we can get. Every time it dips. I want to look at Techno Glass before I make a judgment. But that sounds like a very interesting situation. Situation. So stay tuned for that one. Let's go to Howard in Washington. Howard. Hey, Jim.

[David Bouzouki]

How's it going?

[Jim Cramer]

Well. How about you, Howard?

[David Bouzouki]

I'm doing great. I'm doing great. I'm hoping you can make me some candies. So I got a 10. Networks just reported strong Q4 earnings and the stock is up about 40 since November at a market cap of about 1 1/2 billion. They aren't as big as some other highly regarded cyber or AI stocks. I think they could have multi bagger potential.

[Jim Cramer]

And it's. It's which one? Oh, a ten. A ten. Okay, look, a ten is up in a straight line. It's a parabolic move. It's a good company, but I can't recommend parabolic stocks. Let that one come in a little. And that, ladies and gentlemen, is the conclusion of the Lightning Round.

[Unknown Host]

The Lightning Round is sponsored by Charles Schwab. Coming up, are some investors getting things wrong? Kramer's laying out some key points he's Learned from the CEOs of Honeywell and ARM Holdings.

[Jim Cramer]

Next. Look we gotta stop getting obvious things so wrong. It's costing us too much money. This morning I interviewed Vimal Kapoor. He's the CEO of Honeywell. And Renee Haas, the CEO of Armhole holdings spent a considerable amount of time just correcting the headlines I read about both companies. Headlines distorted everything. Took you right off the scent. If you got a pro this morning and you watch the crawl, the line of the pictures, it tells you what's trading, you might have seen Honeywell trading at $235 fully $13 above where it closed yesterday. Frank Holland, the excellent host of our 5am show immediately said that the rally is because the company split into three different businesses. Automation, aerospace and specialty chemicals. Fundamentals. Totally true. But somehow people went nuts when they saw this news. They didn't wait to see how the company was doing the fundamentals. Now we've known about the breakup for ages. Who was surprised by this? What Longcat brought it up in the 230s. I knew it could head right back down if the earnings or the forecast were below expectations. We've been telling that to club members for ages. How much down? Look when Honeywell reports it has an unfortunate habit of falling short of what the analysts expect for the next quarter. I wasn't on air but I finished my early morning workout, took my shower, got dressed and looked at the tape again. Suddenly the stock was back down to $211. And I knew the euphoria the split was going because it shouldn't have been there to begin with. Replaced by the cold hard facts of the guidance shortfall. $235 down to $211. That's a lot of money lost. And by the end of the day it finished down $12.53 off more than 5%. Now if they had simply guided conservatively last quarter, I think that the stock would actually ended higher. But they did it again with that over promise and then under deliver signature reporting now when I got to speak to CEO Vimal Kapoor on squawk on the Street, I asked him to explain how his breakup could be the next ge. One of the greatest splits of all time. In the G scenario you got an aerospace company, a medical equipment company and a power plant equipment company. For years GE's power business had been a real dog. But thanks to the data center revolution, the whole world desperately needs more electricity. And GE Vernova builds power plants, sell these fantastic coming. How about the Honeywell breakup? Right now their automation division is doing poorly. I think that can change. Laser focused the aerospace business where they make the cockpits for every major aerospace company. It's a gem. Plus, they own a piece of a quantum computing company. It's actually the real deal and they get to sell that, too. In short, I believe Honeywell will be worth far more than the sum of its parts once it's broken up. It's a serious buy down here. I say at $205, you pull the trigger. That's when we'll come back to it and buy back what we sold for the trust. All right, how about ARM Holdings? Complicated story. The stock's been a horse ever since I pounded the table on it after speaking to CEO Rene Haas. After the last quarter, I pushed it. I pushed it hard back then, but this time I just wanted to use the call to get a little more information about ARM's close relationship with Nvidia, which benefits both companies. In video, you know, stock's been horrible. Specifically, I want blatantly, I want to know how Nvidia is doing ever since we heard the deep seat that Chinese AI outfit claims it can compete with the major players using far less hardware. Haas explained that this situation is much better for Nvidia's latest Chip Blackwell, because that one comes with the software you need to take deep seek to the next level. This is something that Ben Racist Ben understands. He's a research analyst familiar, he told me could be happening rather than doing badly and it is actually going to be doing better with it. No wonder Video stock went higher today, rallying almost four bucks. They just can't talk about it because they're in a quiet period. As for aam, terrific quarter, but the stock had run in the semis, are brutal. If they have run ahead of the quarter this year, they have become a very tough group to own. So two interviews, two perspective changers. It's why you must watch the interviews on our network because how else do you know what you need to course correct after getting something wrong? I like to say, as always, Marcus Summer, I promise I'd find it just for you right here. Mad Money. I'm Jim Cramer. See you next time.

[Chris Swift]

All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBCUniversal or their parent company or affiliates and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer Is it time.

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