Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday, January 18.
11 Earnings To Watch In The Week Ahead: Freeport McMoRan (FCX), Johnson & Johnson (JNJ), Google (GOOG), Apple (AAPL), Netflix (NFLX), 3M (MMM), Celgene (CELG), Microsoft (MSFT), Honeywell (HON), Kimberly Clark (KMB), Weyerhaeuser (WY)
Freeport McMoRan (FCX) reports, and "has some explaining to do." The stock should be roaring back because of China, but it has done nothing, because FCX overpaid for an acquisition. "I smell a Wall of Shame," said Cramer.
Johnson & Johnson (JNJ) has a new CEO, great brands and might break itself up. "Don't you dare sell it," said Cramer, who would buy JNJ on any decline, even before it reports.
Google (GOOG) reported a terrible quarter last time around, but management might have some good news. Cramer would listen for information on Android monetization and search.
Apple (AAPL) is an essential earnings report to listen to for the company and for the market as a whole. With downgrades and talk of lackluster iPhone sales, Apple's management has been as "inscrutable as ever" ahead of earnings. Cramer has a position in Apple for his charitable trust, and recommends not buying or selling it until management gives more information.
Netflix (NFLX) is on a roll, and has become the preferred method of watching movies and TV. Cramer expects management to sound confident.
3M (MMM) reports. Management should refute the notion that the stock's valuation is stretched, as the company continues to innovate and is on the way to becoming the quintessential growth stock in the Dow. Cramer would buy the stock on a decline.
Celgene (CELG) management gave a sensational presentation at the JPMorgan Healthcare Conference, and CEO Bob Hugin told a great story on Mad Money. The stock is up 23 points, and Cramer wonders what else Hugin is going to say to make the stock go higher. Cramer would buy CELG on a decline.
Microsoft (MSFT) has been punished so much and expectations are so low that Cramer thinks it may have some mild upside.
Honeywell (HON) is a buy ahead of the quarter if it declines, because all of its segments are humming.
Kimberly Clark (KMB) is one of Cramer's favorite stocks, and he expects it to go higher.
Weyerhaeuser (WY) is a stock Cramer sold for his charitable trust because it had a generous rise, but he would consider buying back the position if it declines 2 or 3 points. The company is levered to timber and housing and should benefit from the housing boom.
CEO Interview: Bryan Jordan, First Horizon (FHN)
Cramer has been talking about the rebound in regional banks, but First Horizon (FHN) got hit hard on its quarter, because its net interest margin and fee income were disappointing. While FHN's other metrics are going strong, including the 12% rise in deposits, increased loan growth and its recent buybacks, Cramer wanted to know if there was a reason to be concerned about FHN. CEO Bryan Jordan said that net interest margin might decline a bit in 2013, but it is likely to stabilize by the middle of the year and be offset by other strengths. While fee income was lower, Jordan said it was well within the range of expected numbers; "I think we've got good coverage, and we will do well in 2013." Jordan said he might consider buying back more stock and increasing the dividend. Cramer concluded the lack of confidence in the economy might be keeping FHN back, and thinks it is a good candidate to consider for a portfolio.
Krispy Kreme (KKD) is cooking, up 75% since November after reporting a healthy 4 cent earnings beat. The main driver of the upside is talk that KKD may be a takeover target, and Cramer thinks that, considering similar deals, the company could be bought at a 35% premium. Even without a takeover, the stock still should see more gains, since it is relatively undervalued compared to its peers. After surviving accounting problems and the recession, KKD is undertaking an aggressive overseas expansion strategy, and is planing to increase its footprint globally by 77%. The stock trades at a multiple of 21 with a 25% growth rate, and has reported positive same store sales for 16 consecutive quarters. Cramer thinks KKD is a buy on a decline, but given the extent of its run, he would use limit orders.
Cramer took some calls:
Yum Brands (YUM) has strong management and is a buy at its current level.
Dunkin Brands (DNKN) is a stock people deserted, but Cramer thinks it will go to $40.
CEO Interview: Barry Davis, Crosstex energy (XTEX)
Crosstex Energy (XTEX) is an oil and gas MLP with an 8% yield. The company got crushed during the recession, but it is a comeback story that is moving away from natural gas and getting more exposure to oil. The company has gone from having 90% exposure to natural gas to 50%. In addition, XTEX is moving to a fee-based model with less volatility; in 2008, XTEX was 65% fee-based, and now the percentage is 90%. CEO Barry Davis plans to increase the distribution significantly, and is confident that demand will continue to grow.
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