Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday April 24.
The Bear Whisperer: Conco Philips (COP), Black & Decker (BDK), Caterpillar (CAT), Yum! Brands (YUM)
Bearish whispers were the cause of the dramatic upsurge in stock prices on Thursday. The rumors that ConcoPhillips, Black&Decker, Caterpillar and Yum were not supposed to do so well were proven false; COP reported earnings that were twice as high as expected and Black&Decker rose 8% on better-than-expected results. The bearish rumors might have costs investors money if they sold prior to earnings, so Cramer suggested doing homework as an antidote to rumor mongering.
Sell Block: The Hot Hand: Toll Brothers (TOL), Lowe's (LOW)
Cramer sees a selloff coming and urges investors to take profits, if only to consolidate the gains that have been accumulating from successive rallies in the past few weeks. He cited Doug Kass' "Hot Hand" theory that when too many stocks are above their 50-day moving averages, a selloff usually follows. Cramer says that the time to buy Toll Brothers and Lowe's has passed and he agrees with Kass that investors should prepare for a temporary decline, even though long-term the market is headed up.
Vicious Rotation: Parker Hannifin (PH), Procter&Gamble (PG)
Action in Parker Hannifin and Procter&Gamble represent "one of the most vicious sector rotations I've ever seen," said Cramer. Big money is buying cyclical stocks in droves and are dumping defensive stocks. Parker Hannifin's stock price rose $2 in spite of performing well below estimates and cutting guidance, and Cramer predicts no one will care about what he expects will be a great quarter when PG reports next week. While Parker Hannifin's aerospace division performed respectably during the downturn, that is no reason to be so enthused about the stock, and excessive bullishness is trampling on decent defensives like Procter & Gamble. Cramer would buy PG on the way down and expects and upside in the stock when some of the euphoria wears off.
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