Summary of "Mad Money with Jim Cramer" Episode – February 19, 2025

Release Date: February 20, 2025

Host: Jim Cramer
Podcast: Mad Money w/ Jim Cramer
Produced by: CNBC
Title: Navigating the Complex Business Cycles and Stock Market Dynamics

Introduction

In the February 19, 2025 episode of "Mad Money," host Jim Cramer delves deep into the complexities of the current stock market landscape, dissecting various business cycles that are not moving in harmony. Cramer emphasizes his mission to educate and guide investors through the volatile jungle of Wall Street, ensuring they are well-equipped to identify lucrative opportunities and avoid potential pitfalls.

Jim Cramer (00:01):
"My mission is simple, to make you money. I'm here to level the playing field for all investors."

Market Overview

Cramer opens by highlighting the divergence in business cycles, noting that while major indices like the Dow Jones Industrial Average, S&P 500, and Nasdaq continue to reach new highs, underlying economic sectors reveal significant weaknesses. This dissonance suggests a fragmented economic environment where not all sectors are thriving simultaneously.

Jim Cramer (02:30):
"Right now we have multiple business cycles and they aren't trading together in any sort of harmonious way."

Bullish Industry Cycles

Travel and Leisure

The travel and leisure sector stands out as the most robust business cycle amidst the current economic turbulence. Cramer attributes this strength to the enduring demand for travel post-COVID-19.

• Airlines:
  The airlines sector is experiencing unprecedented strength. Cramer recommends buying stocks like United Airlines, which has surged 10% year-to-date and is poised to challenge its high of $116.

  Jim Cramer (03:15):
  "The airlines are breathtaking. Not need to think this one through, you just need to go buy United."

• Hospitality Giants – Marriott and Airbnb:
  Both companies have reported excellent earnings, transitioning from cyclical to secular growth models, ensuring consistent demand for accommodations.

  Jim Cramer (04:05):
  "There are two stocks that are roaring in this cycle, Marriott and Airbnb. They just reported excellent numbers."

• Disney and Cruise Lines:
  Disney's theme parks and cruise lines like Royal Caribbean continue to perform well, despite challenges in other segments such as cable.

  Jim Cramer (05:10):
  "Believe me, cruise lines haven't been cyclical since COVID. Keep buying Expedia and booking holdings."

Bearish Industry Cycles

Housing

The housing market is showing signs of distress, particularly among homebuilders like Toll Brothers. Despite potential rate cuts by the Federal Reserve, high mortgage rates are dampening demand.

Jim Cramer (06:00):
"How those prices have to come down before we beat inflation in this country."

Banking

The banking sector presents a mixed picture. While major banks like Wells Fargo, Goldman Sachs, and JP Morgan are performing well, transportation-focused banks are struggling amid regulatory pressures and competitive challenges.

• Strong Performers:
  Jim Cramer (06:45):
  "The whole industry seems very confident that Trump regulators will be more bank friendly than the Biden regulators."

• Struggling Segments:
  Transportation banks like Norfolk Southern and Union Pacific face recession-like conditions due to tariff-related issues and declining sectors.

Transportation

• Railroads and Trucking Companies:
  Companies such as Norfolk Southern and Union Pacific are experiencing downturns. Tariffs and competition from trucking firms like JB Hunt exacerbate their challenges.

  Jim Cramer (07:30):
  "Are we getting into a tariff for Mexico? To me, this group feels like it's practically in a recession cycle."

Food and Beverage/Drug Stocks

Contrary to their traditionally defensive nature, these sectors are under pressure due to political influences and changing regulatory landscapes.

Jim Cramer (08:00):
"With a Human Health and Human Service secretary who dislikes processed food and vaccinations, nothing would shock you about these industries."

AG Cycle (Agriculture)

The agriculture cycle remains strong, with companies like AGCO benefiting from consistent demand and favorable market conditions.

Jim Cramer (09:00):
"Buy the stock of AGCO tomorrow. It's unstoppable."

Aerospace

Aerospace remains a resilient sector, with companies like Honeywell and Boeing continuing to innovate despite market volatility.

Jim Cramer (10:00):
"The aerospace cycle is so powerful you can maybe get close to. You can even buy Boeing."

Retail and Technology

• Retail:
  Major retailers like Costco, Target, and Walmart maintain steady performance, though not without challenges in certain segments.

• Technology:
  The tech sector remains fragmented with areas like the Internet of Things and enterprise software experiencing mixed results. Companies like Analog Devices and Apple show promise, while others face headwinds.

  Jim Cramer (11:00):
  "In tech, it's a bull market in the Internet of Things because one of them, Analog Devices, said good things."

In-Depth Interviews

Semiconductor Capital Equipment – Lam Research

Cramer interviews Tim Archer, President and CEO of Lam Research, to discuss the semiconductor capital equipment sector. They explore Lam Research's innovative technologies, including robotic precision and AI integration, which are driving the company's impressive growth.

Jim Cramer (12:03):
"Can semiconductor capital equipment plays keep making their next major move? Let's dig deeper with someone who really knows this industry better than I do."

Tim Archer (14:26):
"We're building for the future. Our technologies like the Altus Halo system are shipping to production customers now, developed over the past eight years."

Grocery Sector – Spartan Nash

Cramer speaks with Tony Starse, President and CEO of Spartan Nash, about the company's strategies to combat inflation and maintain competitive pricing. Spartan Nash emphasizes their "people first" culture and investment in private label brands to offer high-quality, affordable products.

Jim Cramer (18:38):
"Are the semiconductor capital equipment plays finally ready to make their next major move?"

Tony Starse (19:03):
"We're fighting hard to keep our costs down, allowing us to pass fewer inflationary costs onto our customers."

Lightning Round

In the popular Lightning Round segment, Cramer offers rapid-fire stock recommendations based on caller questions and quick analyses.

• Celsius (00:01):
  Jim Cramer (07:19):
  "Celsius reminds me a lot of Celanese meets Eastman, but it's drinkable and reporting impressive numbers."

• New Balance and On Encounters (08:04):
  Jim Cramer (08:43):
  "On Encounters has done very good work and I'm right to pull the trigger."

• Meta Platforms (09:38):
  Jim Cramer (09:44):
  "Meta is still an inexpensive stock. If you like what you own, just stick with it."

• Confusion in Tech and AI Networking (11:14):
  Jim Cramer (11:54):
  "Semiconductor capital equipment plays like Lam Research are poised for growth despite market volatility."

• AGCO (25:09):
  Jim Cramer (36:25):
  "The AG cycle is now bullish. That's when you buy Deere."

• ARM Holdings (36:00):
  Jim Cramer (36:07):
  "ARM is a very good company and it's a long-term hold."

• Vital Farms (37:26):
  Jim Cramer (37:41):
  "I'll come back to Vital Farms; it sounds like a really good company."

• Bristol Myers (38:06):
  Jim Cramer (38:33):
  "Bristol Myers is the most attractive drug stock other than Lilly. Their drug Benfi is a game-changer."

In-Depth Analysis: Wingstop

Cramer provides a critical analysis of Wingstop's recent performance. The company's same-store sales growth significantly declined, leading to a sharp drop in stock price. Cramer questions the management's lack of transparency regarding the slowdown, emphasizing the importance of key growth metrics.

Jim Cramer (39:49):
"Same store sales is the key metric in the fourth quarter. Wingstop's guidance without explanations caused the stock to fall dramatically."

Jim Cramer (43:45):
"If Wingstop can beat that guidance, this will turn to be a fabulous buying opportunity. However, without an explanation for the slowdown, it's a risky buy."

Conclusion

Jim Cramer wraps up the episode by reiterating the importance of understanding the nuances behind company guidance and key performance metrics. He emphasizes that while market volatility presents challenges, it also offers opportunities for savvy investors to capitalize on undervalued stocks.

Jim Cramer (43:45):
"I'm a stickler for key metrics that measure growth, and no matter what, same store sales growth is the most important metric when you're dealing with a restaurant stock or a retailer of any sort."

Notable Quotes:

• Market Fragmentation:
  "Multiple business cycles and they aren't trading together in any sort of harmonious way." (00:01)

• Bullish on Airlines:
  "Don't need to think this one through, you just need to go buy United." (04:15)

• Housing Market Concerns:
  "Prices have to come down before we beat inflation in this country." (06:00)

• Banking Sector Dynamics:
  "Wells Fargo, Goldman Sachs, JP Morgan screaming higher." (06:45)

• Tech Sector Fragmentation:
  "In tech, it's a bull market in the Internet of Things because one of them, Analog Devices, said good things." (11:00)

• Semiconductor Innovation:
  "Robotic precision, artificial intelligence, and equipment are driving our growth." (12:49)

• Grocery Pricing Strategy:
  "We fight hard to keep our costs down, allowing us to pass fewer inflationary costs onto our customers." (20:10)

• Wingstop Critique:
  "They didn't make it crystal clear why same store sales are slowing." (39:49)

Final Thoughts

This episode of "Mad Money" provides a comprehensive analysis of various industry cycles, highlighting both opportunities and risks for investors. Through in-depth interviews and sharp market insights, Jim Cramer equips listeners with the knowledge needed to navigate the ever-changing financial landscape effectively.