Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday December 10.
Many might assume that a maker of video games would do well over the holiday season. However, GameStop (GME) gave weak holiday numbers, with sales down 4.6%, and guided down on same store sales, predicting a 4-7% decline. This isn’t new for GameStop, which has been a serial disappointer, for at least for 8 consecutive quarters. The stock is down 8.6% on the news, and Cramer does not see any potential upside, because the industry is in secular decline. Mobile and social networking have so dramatically changed the video game sector that GameStop’s games are seen as obsolete. Even the company’s used video games are not selling well. While some may believe that GameStop can breathe life into its old game model, Cramer thinks the company cannot compete with the likes of Amazon (AMZN). With GameStop’s business in secular decline, Cramer would put GameStop on the Sell Block.
Dow Chemical (DOW), PPG Industries (PPG), Georgia Gulf (GGC), Cheniere Energy (LNG), Oracle (ORCL), SAP (SAP), Salesforce (CRM), Qualcomm (QCOM), Broadcom (BRCM), Sirius XM Radio (SIRI), Apple (AAPL), Nokia (NOK)
On Thursday, the Dow rose 82 points, mainly thanks to a bullish export number from China. Cramer discussed 2 more themes that will be major movers in 2013.
Energy is a huge theme domestically with increasing discoveries and production. The glut of natural gas has brought prices low. Chemical companies like Dow (DOW) benefit from cheap natural gas, which is used in plastics and chemicals. While Cramer usually prefers proprietary chemical companies like PPG (PPG), he thinks that Georgia Gulf (GGC) may be a stock with upside in 2013. Georgia Gulf bought PPG’s commodity chemicals business. While Georgia Gulf is more economically sensitive than PPG, because its chemicals are not proprietary, there is enough demand for its products to bring the stock up in the near-term. Cheniere Energy (LNG) is building out export terminals for natural gas. Since natural gas is not being fully exploited in the U.S., exporting it is the logical move, and LNG is the leader in this space.
Technology is a major theme with many strong companies in the sector. Cramer likes Oracle (ORCL) and SAP (SAP) which reported a strong quarter. These two companies tend to lock horns, so investors should be careful with these stocks. Salesforce (CRM) has a high multiple, but is the leader in the cloud space. Cramer is not “pounding the table" about Apple (AAPL), but it is still a long-term hold. The one reliable abiding theme in tech is cellphones. Even laggard stock Nokia (NOK) reported a decent quarter. Qualcomm (QCOM) and Broadcom (BRCM) make chips for the next generation of phones, and show promise.
Cramer discussed the two top performers of the S&P 500 in 2012: Sprint (S), up 188% and Pulte Homes (PHM), which also saw a dramatic rise. Cramer got behind Sprint when no one else seemed to believe in it, and CEO Dan Hesse orchestrated an impressive turnaround. Sprint cleaned up the balance sheet and caught a bid from a Japanese tech firm that agreed to buy a 70% stake in Sprint, purchasing 55% of outstanding shares. Cramer thinks it is time to take profits in Sprint, especially as the stock price might decline when the deal is actually done.
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