Lightning Round: Take-Two Interactive is going much higher, says Jim Cramer

Lightning Round Summary

Key Concepts:

• Bottoming Stock
• Catalyst
• Dividend Aristocrat
• Earnings Multiple
• Cybersecurity
• Trade War

1. Lululemon (LULU): Potential Buying Opportunity

• Caller's Situation: Caller Sean bought Lululemon (LULU) three months ago at $368, and it's now at $268. He wants to know if it's a good time to buy more.
• Cramer's Analysis: Cramer emphasizes focusing on where the stock is going, not where it has been. He notes that LULU is trading at 17 times earnings and is "frantically trying to bottom."
• Recommendation: Cramer suggests initiating a small position in Lululemon now. This is a notable statement as he hasn't said this before.

2. Take-Two Interactive (TTWO): Riding the Grand Theft Auto Wave

• Caller's Question: Caller Swami asks about Take-Two Interactive (TTWO).
• Cramer's Analysis: Cramer points out that Take-Two is going up due to the upcoming release of a new edition of Grand Theft Auto.
• Perspective: He uses TTWO as an example of a stock with strong momentum, questioning why investors might focus on other stocks when TTWO presents a clear opportunity.

3. PRK Rubric: Cybersecurity Play

• Caller's Question: Caller Jay asks about PRK Rubric.
• Cramer's Analysis: Cramer refers to Paul Sinha's appearance on the show, highlighting the compelling story of Rubric in the cybersecurity sector.
• Argument: He questions the need to focus solely on "Magnificent Seven" stocks when companies like Rubric offer potential in growing sectors like cybersecurity.

4. Micron (MU): Lacking a Catalyst

• Caller's Question: Caller Paul is considering starting a position in Micron (MU).
• Cramer's Analysis: Cramer acknowledges that Micron is trading near its low end.
• Concern: However, he expresses uncertainty about a catalyst that would drive the stock higher.

5. Erie Indemnity: Needs Further Research

• Caller's Question: Caller Jim asks about Erie Indemnity, a Dividend Aristocrat celebrating its 100th anniversary.
• Cramer's Response: Cramer admits he needs to do more research on Erie Indemnity, noting that he's heard both positive and negative opinions. He mentions Herb Greenberg's coverage of the company.
• Action: He acknowledges the company's long-term status and mentions discussing it with Ben Stoto, the chief scientist and research director, suggesting potential interest.

6. First Energy: Undervalued Energy Play

• Caller's Question: Caller Howard asks about First Energy.
• Cramer's Analysis: Cramer acknowledges that First Energy isn't the best energy company.
• Recommendation: However, he believes it's a buy because it sells at a lower valuation compared to its peers.

7. Conclusion of Lightning Round

• The Lightning Round is sponsored by Charles Schwab.
• The segment concludes with a teaser for the next topic: whether American companies can still win in the trade war with China.

Main Takeaways:

The Lightning Round provides quick stock recommendations based on current market conditions and specific company catalysts. Cramer emphasizes the importance of identifying catalysts for growth and considering undervalued stocks. He also highlights the need for further research on certain companies before making investment decisions.