Mad Money w/ Jim Cramer – Episode Summary (12/12/24)

Release Date: December 13, 2024

Overview

In the December 12, 2024 episode of CNBC's "Mad Money" hosted by Jim Cramer, the show delves deep into the current state of the stock market, the anticipated impact of the newly elected President Donald Trump on Wall Street, and features insightful interviews with industry leaders Marvin Ellison, CEO of Lowe's, and Kevin Plank, Founder and CEO of Under Armour. The episode culminates with Jim Cramer's dynamic Lightning Round, where he offers stock buy, sell, and hold recommendations to callers.

1. Market Overview and Presidential Influence

Donald Trump's Impact on the Market

Jim Cramer opens the episode by discussing the market’s reaction to President-elect Donald Trump's visit to the New York Stock Exchange (NYSE). Despite the market experiencing a decline—Dow Jones sinking 234 points, S&P 500 dropping 0.5%, and NASDAQ falling 0.66%—Trump's optimistic message about business resonated strongly on the trading floor.

• Cramer (02:23): “But there's something to be said about optimism toward business, and that is what I saw today...”

Cramer emphasizes that Trump's pro-business stance aims to create a favorable environment for investors by advocating for tax cuts and supporting corporate growth. He compares Trump's approach to that of former President Reagan, highlighting the positive impact of presidential support on investor confidence.

• Cramer (05:29): “Here's the bottom line. Biden continually underestimated the sheer number of people who built trillions of dollars in wealth in these last four years...”

Quotes Highlighting Trump's Economic Policies

• Trump (05:29): “Any company that spends $1 billion in this country will be rewarded with lightened regulation.”

Cramer interprets Trump’s policies as a bolster for the stock market, suggesting that an administration focused on business-friendly policies will likely lead to higher stock prices and, consequently, benefit investors.

• Cramer (05:44): “Of course, even with the President's backing, it's insanely hard to build things in this country...”

2. Interview with Marvin Ellison, CEO of Lowe's

Transformative Leadership at Lowe's

Marvin Ellison shares his strategic vision for Lowe's, focusing on technological integration and enhancing customer experience. Under his leadership, the Brooklyn Lowe's store has seen significant improvements in product offerings and operational efficiency.

• Ellison (20:16): “We redesign our labor management system... which helps to create a frictionless customer experience, which is what it's all about.”

Innovative Initiatives

Ellison discusses Lowe's new initiatives, such as the "PPI" productivity loop, which optimizes every aspect of the store—from labor management to supply chain processes—primarily through technological advancements.

• Ellison (22:12): “We are testing something else that we're calling Dwell...”

Addressing Market Challenges

Lowe's is strategically preparing for future market shifts, particularly in housing turnover. With housing turnover at its lowest since the mid-1990s, Ellison anticipates a surge once mortgage rates become more favorable, positioning Lowe's to capitalize on increased consumer spending in home improvement.

• Ellison (24:34): “We have $35 trillion in home equity in the marketplace right now, and it's literally frozen...”

New Private Brand: Lowe's Essentials

To cater to budget-conscious consumers, Lowe's is launching "Lowe's Essentials," a private brand offering high-quality products at affordable prices. This move aims to attract customers who might otherwise shop at dollar stores, thereby increasing store traffic and sales.

• Ellison (26:46): “We created our own brand that's going to create that opening price point...”

Commitment to Veterans

Lowe's prides itself on its commitment to veterans, employing 26,000 current or former military personnel. This initiative not only supports the veteran community but also leverages their strong work ethic and loyalty to enhance the company's operations.

• Ellison (28:30): “We are extremely proud of them and we're proud to be a company US based...”

3. Interview with Kevin Plank, Founder and CEO of Under Armour

Strategic Reinvention at Under Armour

Kevin Plank discusses his return to Under Armour and the measures taken to realign the company’s strategy. Over the past eight months, Plank has focused on simplifying the product line, enhancing workforce efficiency, and strengthening the brand identity.

• Plank (31:03): “We defined who we were... What are we going to do about it?”

Brand Identity and Market Positioning

Under Armour is repositioning itself as a "sports house," emphasizing versatility across various sports and athletic endeavors. This strategy aims to differentiate the brand from competitors like Nike and Adidas by showcasing its ability to support a wide range of athletic activities.

• Plank (34:44): “Under Armour can outfit everything from Notre Dame football...”

Global Expansion and Marketing

Plank highlights Under Armour's global strategies, particularly focusing on regions like APAC and Europe. Hiring industry veterans, such as Eric Litke from Adidas, underscores the company's commitment to enhancing its market presence and brand appeal.

• Plank (36:01): “We brought in someone like Eric Litke to our team...”

Financial Restructuring

Under Armour has undertaken significant financial restructuring to improve margins, including reducing discounted sales and increasing full-price offerings. This shift has positively impacted the company's gross margins, signaling stronger financial health.

• Plank (38:10): “We've been incredibly accretive...”

Future Outlook

Plank expresses confidence in Under Armour's future, citing team diversity and strategic initiatives as key drivers for sustained growth. The company is poised to leverage its enhanced brand identity and operational efficiencies to regain market competitiveness.

• Plank (40:15): “We're about to reinvent a new chapter...”

4. Lightning Round – Stock Recommendations

Caller Interactions and Stock Picks

Jim Cramer engages with callers, providing buy, sell, and hold recommendations based on his analysis of various stocks. Notable discussions include:

• Applied Materials (AMAT): Despite a poor performance, Cramer advises buying due to anticipated order growth.

  • Cramer (42:39): “Let's forget about the chart... buy.”

• Navitas Semiconductor (NVTS): Cramer acknowledges the stock as speculative but notes its losing trend as a cautionary sign.

  • Cramer (43:51): “That's okay for a spec, but they're losing a lot of money.”

• Vah (VAH): Facing competition from Elon Musk, Cramer advises against buying.

  • Cramer (44:09): “I'm going to say no.”

Key Insights from Lightning Round

Cramer's recommendations emphasize the importance of long-term investments over short-term trading, particularly highlighting the stability and growth potential of subscription-based companies.

• Cramer (46:21): “Any company that can raise price at will is a company with a stock that I love...”

Featured Stock Picks

• Costco (COST): Cramer praises Costco's subscription model for providing a steady income stream and enabling price flexibility.
• Netflix (NFLX): Anticipated price hikes are seen as positive, allowing the company to maintain profitability.
• Spotify (SPOT): Continues to be a bargain with its subscription-based model.
• Amazon (AMZN): Despite regulatory challenges, Cramer supports Amazon for its disruptive pricing and market dominance.

5. Key Insights and Conclusions

Strength of Subscription Models

Cramer underscores the resilience and profitability of subscription-based companies, noting their ability to generate predictable revenue and adapt pricing strategies to sustain growth.

• Cramer (46:30): “With these subscription-based companies, there's no reason to trade in and out of their stocks at every data point.”

Economic Policies and Market Confidence

The episode highlights the significant influence of political leadership on market sentiment. Cramer's analysis suggests that a pro-business administration can enhance investor confidence and stimulate market growth.

• Cramer (05:44): “A president who consults with big business over one who seems to enjoy watching endless prosecutions...”

Strategic Leadership in Business

Interviews with Ellison and Plank showcase the critical role of strategic leadership in navigating market challenges, implementing technological innovations, and reinforcing brand identity to drive business success.

Long-Term Investment Strategies

Cramer advocates for patient, long-term investment strategies over reactive trading, emphasizing that understanding a company's foundational strengths and market position is key to building wealth.

Notable Quotes with Timestamps

• Jim Cramer [02:23]: “But there's something to be said about optimism toward business, and that is what I saw today...”
• Jim Cramer [05:29]: “Any company that spends $1 billion in this country will be rewarded with lightened regulation.”
• Marvin Ellison [20:16]: “We redesign our labor management system... which helps to create a frictionless customer experience, which is what it's all about.”
• Kevin Plank [31:03]: “We defined who we were... What are we going to do about it?”
• Jim Cramer [46:21]: “Any company that can raise price at will is a company with a stock that I love...”

Conclusion

The December 12, 2024 episode of "Mad Money" provides a comprehensive analysis of the current market dynamics influenced by political developments, strategic business leadership at Lowe's and Under Armour, and actionable investment advice through the Lightning Round. Jim Cramer's insights emphasize the importance of long-term investment strategies, the impact of economic policies on market confidence, and the critical role of innovation and brand identity in business success. For investors seeking to navigate the complexities of Wall Street, this episode offers valuable perspectives and actionable recommendations to enhance portfolio performance.