Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday January 30.
Change of the Natural Gas Guard: Chesapeake Energy (NYSE:CHK), Kinder Morgan Partners (NYSE:KMP), Copano Energy (NASDAQ:CPNO)
Cramer thinks it is ironic that, the day Aubrey McClendon announced he is leaving his position as CEO of Chesapeake Energy (CHK), Kinder Morgan Partners (KMP) announced it was acquiring its partner, Copano Energy (CPNO). McClendon's vision was of a scenario in which natural gas would be used as a fuel for vehicles, but with the fulfillment of this plan a long way off, and as natural gas prices fall, things were difficult for McClendon at Cheaspeake. KMP is acquiring more natural gas resources, but the main purpose is to use gas for plastics, since there isn't enough demand for it as a fuel domestically. Cramer thinks these two events happening together might mark the bottom in natural gas prices, and it is possible that Rich Kinder, CEO of KMP, will reach the natural gas "Promised Land," that McClendon dreamed of.
"There is no such thing as equal justice under the market," said Cramer, introducing his discussion of why there seems to be a double standard for Apple (AAPL) and Amazon (AMZN). Apple fell 12.4% on the day it reported, because iPhone numbers were 47.8 million rather than the expected 48 million and fears of competition. The fact that gross margins and iPad sales were better-than-expected was ignored by The Street. However, Amazon missed earnings by 6 cents and fell short of revenue targets, and AMZN rose 10% in the aftermarket. Amazon has such a rich valuation, one would have expected it to get punished. Amazon is getting brownie points for the fact that it is investing in its business and doesn't have any significant competition. Apple, on the other hand, isn't growing as fast as it once did, and people are buying other smartphones and tablets. Ebooks are a major driver for Amazon, but Cramer noted that management didn't disclose the kind of numbers investors should expect to hear. However, that didn't matter to analysts, who are more gentle in their judgment of Amazon than of Apple. Apple has "lost its invincibility," a trait that Amazon now has, or at least, that is the perception. The only thing Apple can do now to reverse this state of affairs is to use its $137 billion in cash to buy Amazon at $123 billion.
Core Labs (CLB) is Cramer's "favorite tech company in the oil and gas industry," which provides tools to help drillers determine the places to drill and ways to increase production. CLB beat earnings by 4 cents on higher revenues and raised guidance. The stock has risen 10% since Cramer recommended it a year ago, and 228% since he first discussed the stock in 2006. CEO David Demshur discussed the ramping in oil production and predicted there could be more major discoveries in North America. He also discussed opportunities for offshore drilling in Mexico. Core Labs' technology helps find additional oil in older wells that were thought to have run dry. The company has a strong exposure to oil: 80%, compared to natural gas, 20%. Cramer thinks this is the best quarter Core Labs has reported since the CEO first appeared on Mad Money, and would look for a decline in the stock to buy.
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