Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday June 4.
Mad Mail: TriQuint Semi (TQNT), Apple (AAPL), RF Micro (RFMD), Skyworks Solutions (SWKS), Qualcomm (QCOM)
One viewer asked Cramer why he advocates "schnitzeling" (selling some of a stock on a gain and letting the rest ride) rather than making stop loss orders. Cramer says he finds stop loss orders too rigid and schnitzeling allows the investor to have more control over investments. When another viewer asked Cramer about the strategy of taking profits with a limited amount of stock, he suggested selling 25% of a position on a ten point gain, selling another 25% an another 10% gain and letting the rest run. Cramer told another viewer that he doesn't like TriQuint Semi or RF Micro as much as he likes Skyworks Solutions, but Qualcomm his favorite in the group, and he declared the company is going to have "bust-out earnings."
Boeing (BA), Allegheny Tech (ATI), United Technology (UTX), Alcoa (AA)
Cramer thinks aerospace is ready to take off thanks the the long-delayed release of Boeing's 787 airplane at the Paris Air Show on June 16. The stock has suffered from the delay of this release and fears Obama will cut defense, but Cramer expects an upgrade before the air show. Although Airbus has also produced a new plane, the weak dollar will help Boeing. Allegheny tech, which makes the titanium skin, United Technology, which makes the fasteners and jet-engine producer Alcoa will benefit when the aerospace sector starts flying. Cramer discussed Boeing's strong cash supply and 3.3% yield. While it would have been better to buy Boeing lower, at $50, Boeing is still significantly lower than its $78 peak last year. Cramer would go ahead and buy Boeing and then take a look at its suppliers.
Joy Global (JOYG) CEO Michael Sutherlin
In spite of his company's beating earnings estimates by 28 cents a share and earnings projections by $52 million, Joy Global CEO refused to rest on his laurels. While the company has a backlog of projects which should keep the company busy for a year, if recovery isn't around the corner, there might be a dearth of new projects. China has been voracious in its demand for commodities, yet U.S. coal production is slowing significantly; “I’m just reluctant to go out on a line and say that the commodities markets are turning right now,” Sutherlin said. “So we continue to be cautious [and] manage our business for all possible outcomes.”
Sutherlin did say that there are "very early" signs of recovery for Joy Global and the economy in general, but he expressed this hope with caution. One bullish sign is that demand is outstripping supply, which was reduced dramatically in anticipation of a continued slowdown.
Cramer suggested Sutherlin's projections could be too low if the recent commodities rally is legitimate; "We hope they're too low. That's for sure," Sutherlin replied. Cramer is bullish on Joy Global, which is now 57% off its high.
No one is Buying Da Vinci: Intuitive Surgical (ISRG)
What's the use of having a great product if there aren't any buyers? Intuitive Surgical's robotic surgery system for hysterectomies and prostrate disorders is not the attracting the kind of demand that was initially expected. Hospitals are cutting costs dramatically and simply don't have the budget for this state-of-the art surgery technology. Intuitive Surgical is being left high and dry and has suspended guidance for 2009 so it can regroup. Hospitals that can afford Da Vinci technology have already bought it, and Intuitive Surgical has reached saturation among Tier 1 hospitals. Cramer thinks it's time to sell Intuitive Surgical.
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