Cramer's Morning Take: DuPont 11/1/23

SPEAKER_1 (0:00)

What's on the horizon for financial markets?

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Jim Cramer (0:33)

Jim Cramer here to share with you a sample of my take on the market from today's CNBC Investing Club morning meeting.

And I think that what people have to recognize is that we're getting to a plateau.

Let's use the term that we're getting to a position where the negatives are known and we get the negatives, and so therefore you get an initial down.

Now, there's situations where you have no negatives. Eaton had no negatives, Trane had no negatives, and those are true winners. I'll talk about those tonight. Then you have a caterpillar where you had many divisions that were good and one that wasn't. So that gets hit yesterday. Next day there's revaluation. AMD, a division that wasn't good, gaming, and then the next day people feel we should look at artificial intelligence. I think the same thing's going to happen with DuPont and Umana. I think that both of them, Umana was very good. It had one line item that wasn't that good. DuPont had green shoots. This is a very inexpensive stock. You're buying what I think is a quality cyclical at a very good price, and I would be inclined to buy down 1% some DuPont after this meeting.

Jeff Marks (1:37)

Yeah, look, the key thing is that their electronics and industrial business, that is bottoming revenues down 13%, but bottoming you had the interconnect solutions part was up 8% sequentially.

Semiconductor technology's flat, but the big thing is that they see this D-stock over by Q2, then you'll get a nice volume lift here, and as volumes improve, margins will improve as well, back to the mid to low 30s. And by the way, this E&I recovery, it's not just PCs and smartphones. They also benefit from server demand and AI. So there's a lot of good semiconductor tailwinds here that should play out over the next couple of quarters. Yeah, China was weak in the water and protection side, so that's why they shaved their full-year guidance just a little bit.

But still a very cheap stock. We know the company will buy back every single share of stock that they can basically get their hands on.

Jim Cramer (2:30)

I would be a buyer of this. Now, remember, the way things work is that stock gets hit. It's not going to rally today.

No one's going to come to its defense because no one comes to defend a stock that's down when you could have an eat-in that you could defend or you could defend very easily a train. But we like to buy on discount. And this is the discount. So we don't run from discount. This is a very high quality company that has said things are going to get better. So we buy this stuff.

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