Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday April 24.
National Lemming Day: Apple (AAPL), Eli Lilly (LLY), Amgen (AMGN), Celgene (CELG), Biogen IDEC (BIIB), Bristol Myers (BMY), Gilead (GILD), AT&T (T), Verizon (VZ), Procter & Gamble (PG), Pepsico (PEP), Colgate Palmolive (CL), Hershey (HSY), McDonald's (MCD), Yum Brands (YUM), Starbucks (SBUX), Boeing (BA), Honeywell (HON), Delta Air Lines (DAL), US Airways (LCC), Bank of America (BAC)
Cramer declared Wednesday "National Lemming Day," as the Dow shed 43 points. Cramer noted that stocks that declined brought other stocks off the cliff, like lemmings. Apple (AAPL) is a stock that hope has abandoned, as it received downgrades. Even though management talked about new products, it is clear that many analysts are not going to wait for results. Eli Lilly (LLY) beat earnings estimates and masterfully handled a leading anti-psychotic drug losing patent protection, but analysts found excuses for LLY's positives, and didn't think the good news would last. As a result, many other drug stocks were taken down along with LLY. Cramer's charitable trust took profits on Bristol Myers (BMY) recently; investors who decided not to be greedy and sold a bit of their pharma holdings did not feel the pain so much.
Amgen (AMGN) was down more than 7 points, the worst decline in 3 years. This was the company's first revenue miss, and its anemia franchise could be losing steam. AMGN has run 22% for the year, but hit a wall and might not be done going down. Along with Amgen, other high-flying pharmas saw declines, including Gilead (GILD), Biogen IDEC (BIIB) and Celgene (CELG), not least because they have risen 38%, 41% and 51% respectively so far this year.
AT&T (T) reported no real revenue growth and implied a tapering off of its buyback. AT&T is losing cell phone subscribers and is seeing weakness in wirelines. Cramer wonders if Verizon (VZ), which reported great numbers, will be unfairly punished, even as it seems to be taking market share from AT&T.
There was a "vast suicide wave" among consumer packaged goods. Even though Procter & Gamble (PG) beat its numbers, Wall Street seems to see it as "a beat with no soul." Cramer is concerned that Colgate Palmolive (CL) and Kimberly Clark (KMB) will be considered as guilty by association. Even though Pepsico (PEP) has a great story, investors should beware, since even Hershey (HSY) has been clobbered.
Cramer took some calls:
Bank of America (BAC) received an upgrade and may go higher, perhaps to $20 or $21.
Cramer has long been a supporter of the widespread adoption of natural gas as a cheaper, cleaner alternative to diesel fuel. An article in The New York Times discussed the increasing number of trucks that run on natural gas. Clean Energy Fuels (CLNE) creates fueling stations for natural gas. The stock is up only 6%, and Cramer thinks it can go higher, although he cautions it is a speculative stock.
CEO Andrew Littlefair discussed how many major companies are interested in the natural gas station buildout, including General Electric (GE) and UPS (UPS), which expects to add 7 times more natural gas trucks to its fleet than last year. Five years ago, hardly any refuse trucks ran on natural gas; now 63% of refuse trucks have natural gas engines. A full 95% of Waste Management's (WM) truck purchases are natural gas trucks. Littlefair added that 35% of buses produced today will run on natural gas. While companies seem to be going with the trend, the government is slow to support the effort; "I don't think we can count on having a tax incentive this year." However, Littlefair is bullish on natural gas; "It's on its way."
CEO Interview: Rick Goings, Tupperware (TUP)
Tupperware (TUP), the famous direct sales company, reported a 5 cent beat, but the stock was taken down on revenues that were slightly below analyst estimates and lowered guidance. The stock has returned 384% with re-invested dividends since Cramer got behind it in 2006. The company has been seeing weakness in Europe, but since 62% of its sales come from emerging markets, TUP can offset its losses. When asked about his commitment to the dividend, CEO Rick Goings said, "When we move the dividend forward, it is a permanent thing." Cramer asked Goings if the recent questions raised about direct sales companies have hurt TUP. The CEO responded that Tupperware recruits people who can sell Tupperware products, not mere consumers; "our people are here to build a career."
Jim Cramer's Action Alerts PLUS: Trade right alongside a Wall Street pro! Start your 14-day FREE trial today.
Get Cramer's Picks by email - it's free and takes only a few seconds to sign up.