Don’t be alarmed by IAC’s spin-off talk

CNBC’s Jim Cramer on Tuesday advised investors not to fret over IAC‘s move to divest from Match Group and ANGI Homeservices.

The conglomerate of media, internet and tech businesses earlier this month announced it would consider selling off its large interests in the two companies. Match Group owns a portfolio of dating sites including Tinder and OkCupid, while ANGI Homeservices is the holding company of Angie’s List and HomeAdvisor.

The “Mad Money” host noted that IAC’s digital platforms Vimeo and Dotdash are both growing at faster clips than Match. Shares of ANGI have lost nearly half its value in 2019, he added. In its latest quarter, IAC posted $1.19 in earnings per share, topping analyst estimates of less than $1.

“I think IAC is still terrific. I believe they can turn around ANGI Homeservices … and I wouldn’t be alarmed at all by the spin-off talk,” Cramer said. “That’s just what IAC does, and they’re very good at it. But the key here is simple: as long as IAC’s stock is worth less than the sum of its parts, it’s a screaming buy.”

Cramer breaks down the math behind IAC here

Key economic indicator?

A employee at a Home Depot store in Brooklyn, New York.

Ramin Talaie | Bloomberg | Getty Images

revealed in its quarter report how the ongoing trade war could hurt consumer confidence in America.

Cramer called the company the “perfect microcosm for the U.S. economy” and put his trust behind outgoing-Chief Finance Officer Carol Tome’s perspective on the state of the market.

In a Tuesday morning conference call with investors, Tome, who is set to retire at the end of the month, said “consumer confidence is near record high levels” but “consumer demand could be impacted” by lingering U.S.-China trade tension.

Accounting for the potential impact of tariffs on consumer spending, Home Depot reduced its full-year sales growth outlook to 2.3% from 3.3%.

“As someone who’s always been in favor of cracking down on China, like the president, I think we still need to take her concerns to heart,” Cramer said, “and I hope the president takes this opportunity to make a deal while the Chinese are feeling the pain from our tariffs, but before we’re getting the full impact on our side of the aisle.”

Go deeper here

The Bill Belichick of beauty

A sales assistant arranges lipsticks at an Estee Lauder Companies Inc. store in the Raffles City shopping mall in Shanghai, China.

Qilai Shen | Bloomberg | Getty Images

Cramer compared a cosmetics company to one of the country’s most dominant sports franchises.

The host likened Estee Lauder CEO Fabrizio Freda to Bill Belichick, who has led the New England Patriots to six NFL Super Bowl titles in less than two decades.

“He’s the Bill Belichick of cosmetics. He gets the job done. He does his assignment,” Cramer said. “Estee Lauder’s the stock market equivalent of the Patriots.”

Those comments come after the makeup, fragrance and hair care products maker posted strong quarter results on Monday. Estee Lauder’s share price has surged more than 15% since Wednesday’s close last week. The stock traded at an all-time high of $206 on Tuesday.

Read more here

Cramer’s lightning round: Cronos, Aphria have eclipsed Canopy in the cannabis business

In Cramer’s lightning round, the “Mad Money” host zips through his thoughts about callers’ favorite stock picks of the day

Okta: “This is a company that’s been one of the greatest companies of all time. … I think Okta’s real good, it’s too hot right now. Let it come in a little.”

: “That was a terrible quarter. It was a terrible quarter, they still have a lot of money. I think they’ll be fine, but Cronos has now eclipsed them in my mind as has Aphria … because that quarter was just, wow.”

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