During the October Monthly Meeting , we took questions directly from Investing Club members. Here are Jim Cramer’s and portfolio director Jeff Marks’ responses. Their answers have been edited for clarity. 1. Why do rising interest rates have such a negative effect on technology stocks? (Rod) Jim Cramer: When the Federal Reserve started raising rates, we made sure to reiterate that we prefer companies that are profitable, generate cash flow, and return cash to shareholders because these characteristics help mitigate the risk of higher funding costs associated with higher rates. Mega-cap tech names have been holding up because they earn a lot of money. As an example, during the period when rates started to soar, Nvidia (NVDA) initially got hurt but the company proved resilient as it kept getting more orders from customers. Jeff Marks: It’s frequently viewed that the present value of a company is based on the sum of future cash flows discounted back at a certain rate – the rate often used to discount back is based on Treasury yields. The higher the interest rate, the lower the present value of each cash flow and thus, a low stock price. Funding costs also matter for growth companies, which are often in tech. If rates are higher, it becomes more expensive to borrow to fund growth and expansion plans if the company doesn’t have the cash. That’s why we made the change last year and said you have to own profitable companies that generate cash flow when the Fed starts hiking rates. 2. Why haven’t the stocks of oil companies risen at the same rate as the price of oil? Is this just a lag effect or are fears about a slowdown offsetting the higher oil prices? (Todd) Jim Cramer: I believe that the rally in oil was a short squeeze that is now over. I don’t think it deserved to be in the $90’s because it didn’t have the economic growth. President Joe Biden mistakenly did not refill the strategic petroleum reserve so he was not able to offload oil. I do think Russia ordered oil and sent it to China which kept it off the market. Our own producers surprisingly did not break ranks. What has happened is the artificial nature of the short squeeze engineered by traders and whole countries came apart when we realized that there were no bids and there was not enough oil in the market. We own Coterra (CTRA), our play on natural gas, which keeps edging higher. CEO Tom Jorden was right when he said that he was putting his bet on natural gas and he’s crushing it. If you don’t own Coterra, I think you’re making a mistake. Jeff Marks: I think the market sniffed out that oil was closer to making a near-term top and that’s why the stocks weren’t being priced like oil was making a run to $100. But if the price of oil stocks remains disconnected from the price of the commodity for long, then what tends to happen is you get some M & A chatter around one of the bigger fishes looking to acquire an independent. That’s exactly what played out last week when the story about Exxon’s interest in Pioneer (PXD) was renewed. And, that deal was announced Wednesday. We plan to sell our PXD stake as soon as our trading rules allow. 3. I am concerned with Apple’s decline. Is it time to begin trimming or still “own it, don’t trade it?” (Donald) Jim Cramer: Many years ago when Apple (AAPL) traded in the $20s and $30, Shark Tank investor Daymond John came on “Mad Money” and recommended the stock, saying “stick with it, it’s a winner.” John appeared on “Mad Money” on Tuesday and said he believes the upcoming Vision Pro from Apple is going to be a winner too. There’s an opportunity for Apple to create a partnership with ESPN and pull content onto the miraculous Vision Pro mixed reality headset. Jeff Marks: Still in the “own it, don’t trade it” camp. It’s served us well for many years – through rate hiking cycles, pandemics, and trade wars – and it’s been better to hold it through all those events instead of trying to time the sell-point but also the re-entry level. Our Club analyst Zev Fima recently showed us the math behind it . 4. I’ve had Salesforce for quite a while on your recommendation and have a solid gain. But It’s fallen roughly 10% in the past month – more or less in line with the Nasdaq. Do you still think this is a long-term hold? (Peter) Jim Cramer: Marc Benioff, co-founder and CEO of Salesforce (CRM), is determined that artificial intelligence is going to produce more profits for companies which will then produce more money to hire people. The stock jumped after it announced a better-than-expected quarter . There are people who say their business is weak but this business is on fire. Jeff Marks: Yes, I do, the company has made great strides expanding margins and increasing free cash flow, while keeping its steady cadence of around 10% revenue growth despite the uncertain macro. Salesforce has gotten better at managing dilution with its buybacks. The company is still the leader in customer relationship management and its generative AI tools could add a layer of incremental growth. 5. In light of the government’s anti-trust challenge, is Amazon “dead” money? (John) Jim Cramer: FTC chair Lina Khan does not have a strong antitrust case against Amazon (AMZN) – her arguments don’t make sense. Khan has had it out for Amazon since she was in law school and the case is garbage and it will be thrown out rather quickly. Jeff Marks: I don’t think so because I don’t think anything is going to come of it. And if anything, we’re in the camp that a breakup of Amazon into different parts could unlock value for shareholders. And by the way, I know Amazon recently has made great strides on the cost side and improving profitability, but if Amazon’s different businesses – the AWS cloud unit and retail – were independent, there would be increased scrutiny on each to expand margins and grow profits. 6. Over/Under in the next 12 months that Costco distributes a special cash dividend. (David) Jim Cramer: I spoke with Costco CFO Rich Galanti and he said it’s only a matter of “when, not if” the company distributes a special dividend. We love Costco (COST) because, unlike its retail peers, it doesn’t have theft problems. Costco is one of my absolute favorites in the portfolio. Costco is crushing it. Jeff Marks: I’m going to take “the over” on the special cash dividend because I think Costco likes collecting the 5% interest on its cash. But I’m going to “take the under” on a membership fee hike. 7. Can you review the concept of trading around a core position and give an example of how and when to do so? (Peter) Jeff Marks: What we did with Eli Lilly (LLY) recently is a great example. It’s been a core name since we bought it because we’ve been believers that Lilly had the best growth profile of any large-cap pharma name due to the value of its pipeline. But periodically, when everyone gets bulled up around one idea, the stock becomes a “crowded trade” and gets extended in the short term, which is why we recently trimmed some a few dollars below $600. Sure enough, the stock pulled back to the low $500s over the next few weeks. We didn’t pull the trigger and repurchase what we sold higher at those lower levels, but that cash became of good use when the whole market was getting clobbered last month. And, now with all the positive attention GLP-1s — those diabetes/weight loss drugs like Mounjaro — have gotten recently, the stock looks ready to break above that $600 price. Diabetes drug Mounjaro is expected to get approval to treat obesity soon. Jim Cramer: When you have a core position in a company where you have a long-term thesis, when the stock makes a huge move, you take a little bit of and redeploy it somewhere else in the portfolio. We did this in Humana (HUM) when we sold some HUM shares to secure a 12% gain. With the extra cash on hand, we felt that we had the case to buy, and traded around Procter & Gamble (PG). 8. Why do you like Stanley Black & Decker when you currently state invest in stocks that are making money and not losing money? (Norman) Jim Cramer: We like to have something related to the housing cycle that could make money. The decline in the stock is kind of ridiculous because this is the premier tool company in the world valued at $12 billion, has a strong 4% annual dividend yield, a management team that’s focused, and has gotten its costs down. Jeff Marks: Yes, Stanley Black & Decker (SWK) has had a few unprofitable quarters this year, but this is a special situation. Over the past year, the company was plagued by too much inventory, a bad cost structure, and a complex supply chain. But, the company is in the process of fixing all three. After losing money for three straight quarters, the company is expected to return to profitability in the upcoming reported quarter and the earnings recovery is expected to pick up into 2024 with expectations that it earns more that year than it did in 2022. 9. When you speak of buying on the way down and waiting for the next level, how do you determine what the next level down is? (James) Jim Cramer: This is more of an art, not a science. I learned a strategy from Michael Steinhardt, who is an unbelievable hedge fund manager, called a pyramid style of buying. It’s where you start small and build up, but only if it means it lowers your cost basis. Jeff Marks: You can do this a few ways. Sometimes we use a percentage basis – so on every 3% to 5% pullback. You could also use dividend yields – so if you bought a stock at a 3.75% yield, the next level could be at 4%. But conviction levels matter and what’s happening in the market is important as well. 10. I had a sizeable position in Honeywell for years and the stock is well off its 2021 highs. Should I continue to hold it? (Rhonda) Jim Cramer: We were expecting business changes at Honeywell (HON) and management followed through Tuesday when it announced a reorganization of the company. CEO Vimal Kapur, who replaced Darius Adamczyk earlier this year is reorganizing the business into different divisions starting in the first fiscal quarter next year. We want to see what he does with these changes but need to give the new leader some time to show us how he can bring out value for shareholders. Jeff Marks: I know CEO Vimal Kapur is early in his tenure, but I think the clock is ticking on Honeywell to bring out value and that’s worth owning it for. Yesterday (Tuesday) he announced the strategic reorganization of the company – that’s a positive first step. Next, I’d like to see acquisitions that accelerate growth and dispositions of non-core assets. Otherwise, I wouldn’t be surprised to see chatter around an activist wanting to break the company up, based on the success of the General Electric (GE) and Raytheon Technologies splits. (Jim Cramer’s Charitable Trust is long NVDA, CTRA, AAPL, CRM, AMZN, COST, LLY, HUM, PG, SWK, HON. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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During the October Monthly Meeting, we took questions directly from Investing Club members. Here are Jim Cramer’s and portfolio director Jeff Marks’ responses. Their answers have been edited for clarity.
This fall marks the 25th anniversary of the US launch of the first-gen Toyota Prius — a car that, arguably, has done more to more to shift the market away from fossil fuels than any other single vehicle (more on that in a minute). That means that, in many states, you can now get “antique” or “historic” plates for a modern hybrid.
If that sounds appealing to you, here’s what it might cost to keep that OG Prius on the road for many more years to come.
“When the Prius burst into the US market, it was nothing short of a revolution,” reads the breathless Toyota PR copy. “A true trailblazer in the world of hybrid vehicles, (Prius) set the stage for the electrification movement, captivating environmentally conscious drivers with its innovative spirit.”
I think that’s true. And, as for that claim in the header that the Prius did more to shift the US auto market away from fossil fuels than any other single vehicle, ask yourself this: would there even bea Tesla Roadster (much less an “affordable” Model Y) without the Toyota Prius bringing the conversation about electric cars into the mainstream zeitgeist fully eight years earlier?
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I spent enough time behind the wheel of a seriously quick and capable US Electricar Consulier to tell you this much: no, there wouldn’t.
They’re still out there
2001 Prius, via Toyota.
The inspiration for this article was, predictably enough, a first-generation Prius sighting in my own neighborhood. One of more than 52,000 first-generation Priuses (Prii?) sold in the US, this one was green, with a straight body, glossy paint, and the woman driving it turned out to be the car’s original owner. Her Prius – Toyota’s first gas-electric hybrid – continued to give her great service from its 1.5-liter four-cylinder ICE and high-torque electric motor, and the car’s nickel-metal hydride battery pack seemed serviceable enough, though she couldn’t tell me if it was original (her husband took care of all that).
That, along with the possibility of trolling boomers with an antique-plated Prius, led me to ask myself, “What would it really take to keep one of these on the road?”
Even if your Prius spent its entire life in a garage and has only 60,000 miles on the clock, 25 years is still twenty-five years, and rubber doesn’t care about mileage. That’s not just the rubber in the tires, either. The factory struts, bushings, CV joints, belts – even the engine mounts will surely need to be replaced. Ditto for the door and window seals.
Along with a 12V battery, fresh oil and filter change, and a thorough cleaning, that’s the kind of stuff you should budget for on day one. Here’s a quick estimate on what that would run (parts only, of course, because you work on antiques yourself):
tires – Michelin Energy Saver A/S or Bridgestone Ecopia EP422 Plus in 195/65R15, plan on spending about $150/tire
shocks and struts – KYB Excel-G, commonly sold in pairs, expect to pay about $200/ea.
control arm bushings and sway bar links – MOOG control arm bushings and sway bar end links, $25-50/link
engine and transmission mounts – Dorman or Westar makes replacements at roughly $60–120 each, depending on which mount(s) you need
CV boots / axle rebuild kits – GSP or SKF kits typically sell $25–75/boot
Serpentine / accessory belt – Gates makes an OE-quality replacement belt for about $40
This is the big one
Under the hood; via Toyota.
You’ll notice, by now, that I’ve avoiding one particular bill. The one repair item that makes anyone looking at an older EV or hybrid think twice – the high-voltage battery. And, if you’ve done any kind of research into the cost of replacement batteries for older electric cars, you already know why that is. I haven’t mentioned it, becauseit’s not that bad.
The costs of replacing a high-voltage EV battery in older model year cars continues to go down – and that’s true for newer EVs, too. “We’ve seen about $12-18K as an average replacement cost for a Tesla battery,” says KJ Gimbel, founder and CEO of extended EV warranty firm, Xcelerate Auto. “(At that number) we’re confident that we’ll be able to support the vast majority of claims that arise, regardless of the model.”
In other words, if you’re the type of gear head who expresses a midlife crisis by buying a sensible, reliable daily driver, you could do a lot worse than a historic Prius.
That’s my take, anyway – what’s yours? Let us know what you think of the Prius’ 25th American birthday, its role in the EV revolution, and whether or not it’ll ever gain true classic status in the comments section at the bottom of the page.
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Orange EV may not be a household name like Mack or Kenworth, but this small-ish maker of all-electric heavy duty terminal tractors is making a name for itself where it matters: on the job. And this week, the company’s deployed fleet logged its ten millionth hour of operation!
Despite claims from oil-backed “efficiency” groups and fossil-backed hydrogen propaganda to the contrary, battery-powered heavy-duty EVs are proving themselves more than capable of getting the job done today, with millions upon millions upon millions of over-the-road miles as proof. Now, Orange EV is throwing its own data into the mix, with a deployed fleet of HDEVs that’s logged ten million hours of operation across more than 27 million low-speed, extreme duty miles.
“Ten million hours makes one thing clear: Orange EV has taken electric terminal trucks from possible to proven,” said Kurt Neutgens, President and CTO of Orange EV. “Our 340 customers are operating at an average of 97% uptime, with no compromises, proving you can cut costs, boost performance, and improve health and safety all at once.”
What might be more impressive than the miles covered, though, is how few trucks Orange has deployed to get to that number. The company reports that multiple units have already surpassed 30,000 hours of active service while others still are approaching a full decade of daily use — and all of them are still running on their original Orange-designed LFP battery packs.
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“Diesel yard trucks rarely achieve this level of durability, but Orange EV delivers with every truck,” adds Neutgens, a former Ford engineer. “Every hour of safe, reliable operation raises the bar for what fleets should expect from their equipment.”
Since delivering its first customer truck back in 2015, Orange EV has deployed more than 1,600 trucks across 40 states and four Canadian provinces. Together, these trucks have eliminated approximately 200,000 tons of carbon dioxide and saved fleets over $100 million (US) in fuel and maintenance costs alone. And, in more than 10 million hours of duty, not a single Orange EV yard truck battery has experienced a thermal event.
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EUNICE, NEW MEXICO — Paul Lorskulsint was a shift manager at a brand new uranium enrichment facility deep in the American Southwest when catastrophe struck Japan in 2011.
A massive tsunami and earthquake had caused a severe accident at the Fukushima Daiichi Nuclear Power Plant. Thousands of miles away in Eunice, New Mexico, Lorskulsint turned on the television to make sure his team could witness what was happening across the Pacific Ocean.
Lorskulsint knew the disaster in Japan was a watershed moment for the nuclear industry. The plant where he was leading an operations shift had just opened in 2010, after the European uranium enricher Urenco had spent years building the facility in anticipation of growing demand.
Over the ensuing decade, public support for nuclear power diminshed and a dozen reactors closed in the U.S. as the industry struggled to compete against a flood of cheap natural gas and renewable energy. Demand for the low enriched uranium that fuels nuclear plants dwindled.
“The price of what we sold basically went through the floor,” Lorskulsint, who is now the chief nuclear officer at Urenco USA, told CNBC. Urenco’s long-term contracts with utilities insulated the facility during the downturn, he said, but the price drop put further expansion plans on hold.
Paul Lorskulsint, Chief Nuclear Officer, Urenco USA talks about the uranium enrichment process.
Adam Jeffery | CNBC
Headquartered outside London, Urenco is joinly owned by the British and Dutch goverments and two German utilities. Its New Mexico facility is the only commercial enrichment facility left in the U.S. The last U.S.-owned commercial facility in Paducah, Kentucky, closed in 2013 and its owner the United States Enrichment Corporation went bankrupt during the downturn after Fukushima.
Fourteen years later, the situation has reversed once again. Urenco USA is racing to expand its enrichment capacity. The nuclear industry is gaining momentum as electricity demand in the U.S. is projected to surge from artificial intelligence and the push to expand domestic manufacturing. Doubts persist about whether U.S. power supplies will ramp up quick enough to meet the needs. Increasing uranium enrichment will be a key part of the process, despite the history of past disappointments.
Also, U.S. enriched uranium supplies are at risk. The U.S. still imported 20% of its enriched uranium from Russia in 2024, a legacy of the now shattered hope for friendship between the two countries after the collapse of the Soviet Union and end of the Cold War.
The U.S. will completely ban the import Russian uranium by 2028 in repsonse to Moscow’s full-scale invasion of Ukraine, leaving a gapping supply deficit just when Washington, the utilities and the tech sector are developing the most ambitious plans in decades to build new reactors.
Nuclear plants like Palisades in Michigan, Crane Clean Energy Center in Pennsylvania and Duane Arnold in Iowa are planning to restart operations this decade after closing years ago. The tech sector is investing hundreds of millions of dollars to bring advanced reactors online in the 2030s to help power their computer warehouses that train and run AI applications.
“It is a pivotal moment, the next five to 10 years for the nuclear industry,” Lorskulsint said. “We’re going to have to have to deliver on time, on schedule and continue to maintain that momentum, which is a significant challenge.”
Employees at Urenco USA receive a cylinder of feed material for enrichment process.
Adam Jeffery | CNBC
Expansion plans
In deeply divided Washington, support for nuclear power is one of the few issues that can still muster some bipartisan support. President Donald Trump wants to quadruple nuclear power by 2050, a significant increase over President Joe Biden’s previous goal to triple it by that date.
The U.S. has only built one new nuclear plant from scratch in the past 30 years, raising doubts about whether such ambitious plans can be realized. But any effort big or small to expand nuclear power in the U.S. will run through Urenco’s facility in New Mexico.
The plant currently has capacity to supply about a third of U.S. demand with $5 billion invested in the facility to date. Urenco is expanding its capacity in New Mexico by 15% through 2027 as utilties replace Russian fuel. It has installed two new centrifuge cascades for enrichment this year. But Urenco’s expansion alone won’t fill the Russian supply gap, Lorskulsint said.
“Our competitors will have to expand in order to make sure that as a whole the industry is still supplied,” he said. “We’re building quickly as we can to make sure that the the industry is not short handed.”
As Russian fuel is banned from the U.S., the Trump administration is pushing for 10 new large reactors to start construction this decade. Alphabet is investing in about 2 gigawatts of new nuclear, Amazon has committed to more than 5 gigawatts, and Meta wants to bring up to 4 gigawatts online.
Urenco USA Facilities in Eunice, New Mexico.
Adam Jeffery | CNBC
The industry is worried about the supply gap, Lorskulsint said, but filling it “is not an insurmountable task.”
Urenco USA is a candidate to receive a contract from the Department of Energy to produce more low-enriched uranium, part of U.S. efforts to standup a domestic nuclear supply chain. The contract would allow the New Mexico facility to expand further with the construction of a fourth production building.
Urenco’s competitors are also seeking support from the Energy Department to build out U.S. enrichment capacity. France’s Orano is planning to build a facility in Oak Ridge, Tennesse, with operations potentially starting in the 2030s.
Publicly traded Centrus has a facility in Piketon, Ohio, where it plans to produce low-enriched uranium, but it hasn’t yet started commercial operations. Centrus is the successor company to the United States Enrichment Corporation that went bankrupt in 2013.
Centrus stock has gained more than 400% this year as investors bet on a growing demand for enriched uranium due to U.S. plans to expand nuclear power.
Paul Lorskulsint, Chief Nuclear Officer, Urenco USA talks about the uranium enrichment process next to centrifuge cascade.
Adam Jeffery | CNBC
Supply chain bottlenecks
But enrichment is just one stage in a long supply chain that will be stretched by growing demand. Uranium delivered to the U.S is often mined in Canada and it is then converted into intermediate state called uranium hexafluoride that is the feedstock for enrichment.
The feedstock is spun in Urenco’s centrifuges to increase the presence of the isotope Uranium-235 to 5%, the level needed for most nuclear plants. The enriched uranium is then shipped to fuel fabricators that manufacture the pellets that go into reactors in power plants.
U.S. nuclear plants are facing cumulative supply gap of 184 million pounds of uranium through 2034, according to the Energy Information Administration.The biggest bottleneck right now for Urenco is the conversion of uranium into the feedstock for enrichment, Lorskulsint said. There are only three facilities in the Western world located in Canada, France and Illinois that convert uranium into feedstock.
“Every portion of the supply chain is going to have to expand, it’s not just about enrichment,” Lorskulsint said. “We need more of everything but conversion right now is the bottleneck.”
The nuclear supply chain may not be the biggest challenge in the end, the executive said. The ageing U.S. electric grid could prove to be the real constraint on building new nuclear due how long it takes to complete upgrades, he said. While this could slow Urenco down, it won’t stop the expansion, he said.
“We came here when the market demanded it,” Lorskulsint said of Urenco’s investment in the U.S. “We were here when the market didn’t demand it. And we are now expanding to make sure that we can still support as much as the market needs from us.”