Mad Money w/ Jim Cramer – Episode Summary (11/21/24)

Host: Jim Cramer
Podcast: CNBC’s Mad Money with Jim Cramer
Release Date: November 22, 2024

Mad Money with Jim Cramer delivered a dynamic and insightful episode on November 21, 2024, navigating through various market updates, in-depth company analyses, and engaging interviews. Below is a comprehensive summary capturing all key discussions, insights, and conclusions from the episode.

Market Overview and Nvidia Spotlight

[01:03]
Jim Cramer kicked off the episode with a vibrant market update, highlighting significant movements in major indices:

• Dow Jones: Jumped 462 points.
• S&P 500: Gained 0.53%.
• Nasdaq: Advanced 0.03%.

He drew attention to the fierce competition between Apple and Microsoft to remain the largest company by market capitalization, noting Apple's slight edge with a market cap of $3.5 trillion compared to Microsoft's $3.45 trillion.

Nvidia’s Stellar Performance

Cramer passionately discussed Nvidia, celebrating its remarkable growth and strategic positioning:

• Market Cap: Rose from $500 billion two years ago to a staggering valuation.
• Revenue: Recorded $35 billion last quarter.
• Net Income: Achieved $20 billion with 75% gross margins.

Notable Quote:
"In retrospect, it was cheap, cheap, cheap. That's what happens when a company outruns the estimates." – Jim Cramer [04:20]

He attributed Nvidia's success to its dual focus on accelerated computing and artificial intelligence, crediting CEO Jensen Huang and his team for their visionary leadership. Cramer emphasized Nvidia's pivotal role in transforming industries with its cutting-edge technology, foreseeing a $1 trillion investment in computing power replacement and significant advancements in AI-driven applications.

Caller Segment: Chipotle Success Story

[09:05]
Cramer received a call from Robert, who lauded his accurate stock recommendations, specifically highlighting Chipotle:

• Caller’s Success:
  "You made me 103% in the last six months." – Robert [09:10]

• Cramer acknowledged the oversight regarding Chipotle's new CEO, Scott Boatwright, humorously admitting he was momentarily embarrassed but reaffirmed the stock’s upward trajectory.

Notable Quote:
"I never thought I'd say this, but I too am out of super." – Jim Cramer [08:00]

In-Depth Analysis: Elf Beauty vs. Muddy Waters Report

[13:32] – [21:04]
The episode delved into the controversy surrounding Elf Beauty following a critical report by Muddy Waters Research, a renowned short-selling firm.

Muddy Waters’ Allegations:

• Claimed Elf Beauty’s imports had sharply declined, suggesting inventory manipulation and revenue overstatement.
• Alleged potential criminal charges, including misrepresentation of revenue figures.

Jim Cramer’s Investigation:

• Cramer meticulously reviewed Muddy Waters’ report, questioning the validity of their import data analysis.
• Presented Elf Beauty’s CEO, Tarang Amin, who refuted the allegations, explaining that the decline in public import data was due to a confidentiality request with U.S. Customs and Border Protection for competitive reasons.

Key Points from Tarang Amin:

• Market Performance:
  "We just finished our 23rd consecutive quarter of net sales and market share growth." – Tarang Amin [15:44]

• Inventory Management:
  "We built up inventory to meet the strong demand we’re seeing both in the US and internationally." – Tarang Amin [18:01]

• Market Position:
  "Our mission is to make the best of beauty accessible to every eye, lip, and face." – *Tarang Amin [18:46]

Cramer highlighted the strength of Elf Beauty’s market share growth and its robust relationships with key retailers like Target and Ulta, effectively countering Muddy Waters’ claims. The CEO emphasized the company's healthy financial status and strategic market expansion, leading to a rebound in stock performance following the clarification.

Notable Quote:
"Their report was absolute nonsense." – Tarang Amin [15:25]

Interview: Kyndryl Holdings’ Impressive Turnaround

[21:59] – [27:57]
Cramer interviewed Martin Schroeder, Chairman and CEO of Kyndryl Holdings, focusing on the company’s remarkable transformation since spinning off from IBM three years prior.

Key Achievements:

• Stock Performance:
  "A stellar quarter sent the stock up 14% in a single day, followed by another 14% after investor meetings." – Martin Schroeder [22:41]

• Financial Turnaround:
  Transitioned from an $356 million pre-tax loss in fiscal year 2022 to projecting a $4.6 million pre-tax income gain.

• Strategic Investments:
  Emphasized investments in skills and capabilities, resulting in significant revenue streams from hyperscalers like Microsoft Azure and Google.

• Future Outlook:
  Announced a share repurchase authorization, indicating strong confidence in future prospects.

Notable Quote:
"We have the best engineers doing the most complex work on the most important workloads." – Martin Schroeder [25:28]

Schroeder outlined Kyndryl’s strategic focus on sustainable growth, triple cash flow, and doubling profits through a robust financial model. The CEO highlighted the company’s ability to secure large deals and expand its customer base globally, attributing success to newfound freedom post-spin-off.

Spotlight Interview: Disney Experiences’ New Horizons

[39:15] – [38:58]
Cramer featured an illuminating interview with Josh DiMero, Chairman of Disney Experiences, showcasing the latest addition to Disney’s cruise fleet, the Disney Treasure.

Highlights of Disney Treasure:

• Unique Storytelling:
  "Everything we do here is steeped in a story from the Walt Disney Company." – Josh DiMero [33:20]

• Entertainment Excellence:
  Features Broadway-quality shows, including Moana and integrated Disney IP from parks like Haunted Mansion Parlor.

• Guest Experience:
  Emphasized tailored experiences for families, with dedicated areas for children and premium services for adults, ensuring flexibility and satisfaction for all guests.

• Expansion Plans:
  Announced seven more ships by 2031, including the Disney Adventure sailing out of Singapore to tap into new international markets.

Notable Quote:
"Guests tell us they want to come back again, and they do." – Josh DiMero [34:45]

DiMero shared insights into the high occupancy rates (98%) and strong demand driving Disney’s cruise operations. He highlighted the strategic use of Disney’s rich intellectual property to create unparalleled guest experiences, positioning the Disney Treasure as a flagship in the company’s growing cruise division.

Lightning Round: Quick Takes on Various Stocks

[39:15] – [46:33]
In the lightning round, Cramer swiftly addressed multiple caller queries, offering succinct opinions on a range of stocks:

• Oscar Health Incorporated:
  "Mark Bertolini is a winner and a hitter. Let’s take a hard look at it." – Jim Cramer [40:00]

• John Deere (DE):
  Praised as a best-of-breed stock, highlighting its robust performance despite recent volatility.

• BGS and PFE:

  • PFE (Pfizer): Described as a "utility of great renown and terrific."
  • BGS: Called a "total loser" with an unsafe dividend.

• Rocket Lab:
  "One of those stocks that people are just going to buy because they love the name, they love the business."

• MicroStrategy (MSTR):
  Endorsed as a strong Bitcoin play, albeit with a preference for direct Bitcoin ownership.

Short Seller Dynamics:

Cramer elaborated on the phenomenon of short covering, where heavily shorted stocks like Snowflake, Williams Sonoma, and John Deere experience dramatic price surges following positive news, forcing short sellers to buy back shares to mitigate losses. This dynamic creates explosive upward momentum in stock prices, benefiting long-term investors.

Notable Quote:
"When the shorts no longer have a leg to stand on, they must become buyers. If you're a shareholder, they're your worst enemy when they're talking about a stock going to zero. But once the stock starts soaring, the shorts are your best friend." – Jim Cramer [45:00]

Conclusion

Jim Cramer's episode of Mad Money on November 21, 2024, provided listeners with a wealth of information ranging from deep dives into high-performing stocks like Nvidia and Elf Beauty to strategic interviews with industry leaders from Kyndryl Holdings and Disney Experiences. The session was enriched with real-time market analysis, actionable investment advice, and engaging discussions on the interplay between company performance and short-selling dynamics. Throughout the episode, Cramer maintained his signature enthusiasm and insightful commentary, empowering investors with the knowledge to navigate the complexities of the Wall Street landscape.

Notable Quotes with Timestamps:

• "In retrospect, it was cheap, cheap, cheap. That's what happens when a company outruns the estimates." – Jim Cramer [04:20]
• "Their report was absolute nonsense." – Tarang Amin [15:25]
• "We have the best engineers doing the most complex work on the most important workloads." – Martin Schroeder [25:28]
• "Guests tell us they want to come back again, and they do." – Josh DiMero [34:45]
• "When the shorts no longer have a leg to stand on, they must become buyers. If you're a shareholder, they're your worst enemy when they're talking about a stock going to zero. But once the stock starts soaring, the shorts are your best friend." – Jim Cramer [45:00]

This detailed summary encapsulates the essence of the Mad Money with Jim Cramer episode, providing a clear and engaging overview for those who missed the live session.