Cramer's Morning Take: Linde 5/2/24

Jim Cramer (0:01)

Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club Morning Meeting.

We have an action-packed morning meeting, and you want to get your pen out and be ready for this one, because we've got some action that we're going to be taking. First, I just want to say, the markets are now reacting with the way they should have reacted yesterday until the close, which is we had a Fed that basically said, listen, we're not going to raise rates. Take that off the table. That had been a narrative that a lot of the media had bought into. And with that off the table, we know we're either going to have them flat or down. And that's a win. It's a win for stocks.

Jeff Marks (0:37)

Yeah. Next move cut. Jobs report tomorrow obviously will be key in terms of watching not only wage growth, job growth, but the unemployment rate as well. You got Apple tonight, another big event, too. We've got to get through. But why don't we just start getting into earnings? Because I think it's so important.

Let's start off with Linde.

Down because they end the streak of these beat in raises.

EPS wasn't beat up 10% year over year with sales mass. Volumes down 1% year over year over sequentially. Margin's big improvement. Why is it down? Well, they didn't raise. QQ guide a little bit light. But I think this guidance is conservative. I'm going to explain why.

Jim Cramer (1:16)

Okay, good.

Jeff Marks (1:16)

So they're talking about electronics on the conference call. Up 1%. They've pointed out some softness in the fab production volumes.

Not undifferent from what we heard from Taiwan Semi.

Jim Cramer (1:27)

No.

Jeff Marks (1:29)

They did pull it back a little bit. However, they do believe it's bottomed out. They expect volumes to pick up in the second half of the year, partly driven by demand for AI chips and new data centers. Same thing we heard from Japan yesterday.

But they said they didn't include this in their guidance. Now, I don't know why they didn't bake this recovery in.

But they wanted to air a little bit more on the cautious side. It's still guiding for growth of about 10% FX.

Jim Cramer (1:53)

Which is hard to find in this market.

Jeff Marks (1:54)

But I think because it kind of ended the streak of beaten raises, which, by the way, Linde for the last four years has beaten the market's return every single year.

So it's pulling back. Now, we did sell some at 465 in March.

Jim Cramer (2:07)

Let's buy that back. So sell at 465

Why do we do that?

Jeff Marks (2:11)

25 shares we sold.

Jim Cramer (2:12)

So that if it does drop, we can get right back in. Let's buy that 25 after this.

Jeff Marks (2:18)

There's a very high quality company. I mean, they basically, it's an oligopoly with a couple other companies.

Jim Cramer (2:25)

You should never allow that to happen.

Jeff Marks (2:26)

They could basically set their prices.

Jim Cramer (2:28)

Don't forget Carbon Capture. You'll be talking about that with Darren Woods when he goes out next week to Milken.

Jeff Marks (2:32)

That's their product. They have this formula of 10% growth. They do think green energy, decarbonization, that theme will be another kicker to earnings growth long term. So the stock's down 5%, I know.

But I think it's a good opportunity, very high quality company we've been waiting to pull back.

Jim Cramer (2:53)

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SPEAKER_3 (3:04)

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