Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday December 14.
12 Things To Watch In The Week Ahead: General Electric (NYSE:GE), Oracle (NYSE:ORCL), General Mills (NYSE:GIS), Accenture (NYSE:ACN), Bed, Bath & Beyond (NASDAQ:BBBY), Paychex (NASDAQ:PAYX), CarMax (NYSE:KMX), Darden Restaurants (NYSE:DRI), Discover Financial (NYSE:DFS), Nike (NYSE:NKE), Walgreen (NYSE:WAG) Other stocks mentioned: Dollar General (NYSE:DG), Express Scripts (NASDAQ:ESRX), CVS Caremark (NYSE:CVS), Sherwin Williams (NYSE:SHW), Pfizer (NYSE:PFE), First Solar (NASDAQ:FSLR), SolarCity (NASDAQ:SCTY)
With the end of the year drawing near and not a compromise to the fiscal cliff issue in sight, Cramer would invest with caution.
Empire State Manufacturing Report should indicate if businesses are improving and how they are allocating funds.
General Electric (GE) Analyst Meeting: GE is a terrific play on several international bull markets, including energy conservation, aerospace and healthcare. The fact that GE boosted its dividend by 12% on Friday is a show of confidence. Cramer expects a good story from GE.
Oracle (ORCL) is usually a good stock to buy going into earnings, but there is so much talk of a better than expected quarter, and the stock has already rallied 25% for the year, that Oracle's quarter had better be perfect, or the stock will get hit.
General Mills (GIS) is a defensive play that has hardly moved. Given its strong dividend, it might be worth holding, because GIS doesn't seem to get hammered.
Accenture (ACN) is the one stock Cramer would buy as a trade in the week ahead. He would pick some up on Tuesday ahead of its report, since ACN consistently guides up.
Bed Bath & Beyond (BBBY) is a "worrying situation." The stock is acting badly, even on strong days. Some might wonder how much worse it can do, but given Dollar General's (DG) news about margin pressure, Cramer is concerned about BBBY. It has a good balance sheet, is too late to sell, but it has a terrible chart.
Paychex (PAYX) should discuss whether the fiscal cliff anxiety is crimping small businesses more than they have already been squeezed by the economy. It might be a hold, because the dividend pays investors to wait for an eventual move up.
CarMax (KMX) might benefit from the shortage of cars in the East coast. With the mainstream auto industry picking up, KMX's used car sales might be ready to run. The need to replace cars because of Hurricane Sandy should be a driver for KMX.
Darden (DRI) is one of the few restaurant stocks that hasn't moved up, and the company can't seem to get its act together. DRI has poor same store sales, and the performance is becoming so disappointing that investors might not even want to own it for its dividend anymore.
Discover Financial (DFS) is the cheapest of the credit card companies, with a multiple of 8. The stock is up 65% for the year and might have room to run. Cramer would buy DFS on weakness.
Nike (NKE) was running on the strength of China, but that situation seems to have reversed with an inventory build in China. The U.S Nike market is looking weaker for Nike. Cramer would not buy or sell Nike based on earnings, but future orders is the metric people should be looking at.
Walgreen (WAG) might post strong numbers because CVS Caremark (CVS) is doing well, and WAG's conflict with Express Scripts (ESRX) has been resolved. Cramer doesn't like WAG's planned acquisition of Boots pharmacy, but aside from that, the stock is a buy on a decline.
Cramer took some calls:
Sherwin Williams (SHW) is a terrific stock and is a great play on housing. Cramer thinks the stock will rebound even if the worst happens with the fiscal cliff.
Pfizer (PFE) has a strong animal health segment, and Cramer has "warmed up" to PFE. While he usually is wary of Big Pharma's slow growth, he thinks PFE will go higher.
VirnetX (NYSEMKT:VHC). Other stocks mentioned: Apple (NASDAQ:AAPL), Cisco (NASDAQ:CSCO), Siemens (SI)
Cramer discussed Virtnext (VHC), an "Intriguing speculative play" with high risk and potentially high reward. The stock has risen a staggering 15,000% since Mad Money began airing in 2005. VHC specializes in intellectual property and has a host of patents for products that allow secure communications over the internet. Many of these patents are behind 4G wireless. The company licenses patents and goes after companies for patent infringement in intellectual property lawsuits. The next catalyst for VHC is a lawsuit against Apple (AAPL). VHC was awarded a settlement already, and the second case could determine if the damages will be increased or decreased. The result could by a royalty deal, which will be a boon for VHC. The company has upcoming lawsuits against Cisco (CSCO) and Siemens (SI) in 2013. Cramer warned viewers that this approach may be "reasoned gambling," but since he recommends that a speculative stock should only take up 10% of a portfolio, VHC might be an exciting stock to watch. Chances are good for some kind of increase, since VHC has already won against Apple. The ideal way to play VHC is with deep in the money call options for June 26 at $12.
Eaton (NYSE:ETN), PPG (NYSE:PPG), Honeywell (NYSE:HON), Google (NASDAQ:GOOG), Research in Motion (RIMM), Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN), J.C.Penney (NYSE:JCP), Phillips Van Heusen (NYSE:PVH), Briggs & Stratton (NYSE:BGG), Best Buy (NYSE:BBY)
Cramer discussed stocks viewers obsessively ask him about:
Apple was down 20 points on heavy volume on Friday, and to those who ask where Apple is headed, Cramer says, "lower," at least for the short-term. Apple is a stock Cramer owns for his charitable trust, but he did some trimming some time ago. Although Cramer thinks Apple is a great long-term investment, he sees a near-term shortfall as investors sell the stock ahead of the expected increase in capital gains taxes. There are rumors of an inventory glut, and the iPhone is not selling as well as expected in China. While Apple remains a good company, it may continue to slow a bit.
Google (GOOG) may have rallied a bit on the news that Googlemaps is back on the iPhone, but the company's recent quarter was so disappointing, that Cramer could understand the desire to scale out of it, given the ongoing problem of advertising margins for mobile.
Research in Motion (RIMM) has a new Blackberry which is popular with those who are already fans of the devices. The company has taken out a lot of costs and is cash flow positive, but Cramer thinks it is more of a sell than a hold.
Netflix (NFLX) has a large client base, but is a battleground between the longs and the shorts.
Amazon (AMZN) is spending more so it can become the lowest priced and most convenient department store in the world. Cramer thinks it goes higher.
J.C. Penney (JCP) was in a slump until Emmanual Chirico, CEO of Phillips Van Heusen (PVH) discussed the fact that JCP is buying a lot of merchandise from PVH for its store within a store concept. Cramer thinks it can go higher.
Best Buy (BBY) might be taken private, and its fundamentals are on the decline. Cramer would stay away.
The above-mentioned stocks are those over which investors tend to obsess, and these names tend to be battlegrounds. Cramer prefers stocks that might not seem as exciting, but are improving their top and bottom lines and are great for shareholders: Eaton (ETN), Honeywell (HON), PPG Industries (PPG) and Briggs & Stratton (BGG).
3D (NYSE:DDD), Stratasys (NASDAQ:SSYS), Lexmark (NYSE:LXK), Intel (NASDAQ:INTC), Applied Materials (NASDAQ:AMAT)
Cramer discussed 3-D printing as an investment idea; he doesn't view it as a flash in the pan, but an industry that could be in bull market mode in a few years. There are two main players in 3-D printing: 3D (DDD) and Stratasys (SSYS), which have climbed 218% and 125% respectively. SSYS just closed a deal to acquire Objet, a 3-D printing company that focuses on high tech ways to reproduce fine details in images and models. Cramer likes both DDD and SSYS, but prefers the latter, given the fact that this acquisition gives SSYS exposure to many new clients, and because SSYS is slightly cheaper; SSYS sells at a multiple of 37 (Cramer thinks 33 would be more accurate) compared to a 20% growth rate. DDD has a multiple of 29.5 and has a 14% growth rate. while DDD is seeing a 57% rise in revenues and an organic growth rate of 26%, Cramer slightly prefers SSYS on a decline.
Cramer took some calls:
Lexmark (LXK) is a declining secular story. "I don't want you to go near it."
Intel (INTC) is not a stock worth owning, given the decline of the PC.
Applied Materials (AMAT) is not a buy, even though it has gotten hit along with the rest of tech.
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