Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday March 28.
On Thursday, the S&P 500 took out its all-time high and the Dow gained 52 points. For the first quarter, the Dow finished up 11%. Since 1950, there have only been 8 times the Dow rallied more than 8% the first quarter, and in each instance, the Dow closed up dramatically higher for the entire year. Another good sign is the transport sector is leading the rally; health in transports is a reliable sign of a bona fide bull market. However, there might be some bad news next week that might send stocks down: worries about sequester, and Slovenia's possible bank collapse. In addition, bears are saying people should sell in "April" and go away instead of "May" this year, because of concerns that stocks have risen so dramatically (However, Cramer notes that April tends to be the strongest month of the year for stocks). Cramer looked at earnings and other news that may move the market next week:
China PMI Report: If this number is poor, there may be a wave of selling in industrials and commodity stocks.
March ISM: Hopefully, this number will not be so strong as to fuel worries about the Fed raising rates, and will not be so weak that it will threaten confidence in the economy.
McCormick (MKC) missed its last quarter. Cramer said to buy the stock on the weak earnings, and it has since shot up 10 points. Since it has rallied so much, Cramer would countenance taking profits ahead of the quarter.
Monsanto (MON) just settled a lawsuit with Dupont (DD), and the stock has rallied. Cramer isn't sure good earnings can match this success, and since grain has been a weak area, he suggests taking some off the table prior to earnings; "But don't sell all of it, because it is good."
ConAgra (CAG) is reporting and should guide up on the success of the Ralcorp acquisition. Cramer would buy if it comes down.
Bank of Japan Announcement: Japan has been "on a warpath against its own currency" so its cars can be more competitive internationally. Many see this as an unfair advantage. Cramer wants to see what the Bank of Japan says about the future of the yen.
ECB Announcement should not inspire much hope. The ECB doesn't seem to have a coherent plan for growth, proactive measures or a strategy for rescuing Europe's banks; "I see nothing good coming out of here."
Non-Farm Payroll: If the number is good, it will be considered the "last good number" because of sequestration. If it is poor, people will be less worried the Fed will raise rates.
Cramer took some calls:
MetroPCS (PCS): Cramer would take gains in this stock.
Halliburton (HAL) is a stock Cramer wants to come down so it can be bought for the charitable trust. Even though management says North America is not strong, Cramer thinks the stock could go to $45-$46.
CEO Interview: Marty Mucci, Paychex (PAYX)
Paychex (PAYX) is the leading payroll processor. It reported earnings a penny above the Street's estimates and re-affirmed guidance. The stock is close to its 52-week high and has a 3.76% yield. The company is facing headwinds from the slow growth in new businesses, but is seeing more checks per payroll reported. CEO Marty Mucci is confident that if new business and housing picks up, the company will see a growing base of clients. Mucci expressed hope that Paychex will transfer fully into a software-as-a-service company. Cramer notes that analysts have been against the company for the last 7 points of its gain. He predicts that when small business recovers, the stock will be "to the moon."
Regeneron's price tag of $176 might intimidate some prospective buyers, but REGN is a winner that could have more upside. The stock has seen a 3,400% gain since Cramer recommended it 8 years ago in the first weeks of Mad Money. It was the best performer in the Nasdaq for 2012, up 209%, and while it has had a slow start for 2013, up only 3%, Cramer thinks the stock has room to run, given its robust pipeline. The multiple is at a high 30, but its growth rate is 29%. REGN's macular degeneration drug has generated strong sales, because it is more effective and requires fewer injections than a similar treatment. REGN is seeking approval for new indications of the drug, which is expected to bring a 50% increase in sales this year. REGN is also working on a drug against bowel tumors and a new cholesterol drug for patients who cannot tolerate the other treatments. In addition, REGN is working on drugs for asthma and arthritis. Cramer thinks REGN will continue to be a winner.
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