Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday May 13.
Whole Foods (NASDAQ:WFM), Disney (NYSE:DIS), Domino's Pizza (NYSE:DPZ), Williams Sonoma (NYSE:WSM), Restoration Hardware (NYSE:RH), 3M (NYSE:MMM), Caterpillar (NYSE:CAT), Emerson (NYSE:EMR), Apple (NASDAQ:AAPL), DirecTV (NASDAQ:DTV), Amazon (NASDAQ:AMZN).
Although the Dow dipped 27 points, it has been going strong. Cramer thinks the bull market will continue, given three trends:
1. Stocks run up into a good quarter, and with excellent results, the stock goes higher. Usually people sell off after a good quarter, especially if there has been a run-up. Whole Foods (WFM) reported a strong quarter, but the profit-takers were absent. Disney (DIS) usually sells off like "clockwork" after a strong quarter, but not this time. Domino's (DPZ) went up 5 points ahead of the quarter, but after successful earnings, it has risen another 4 points.
3. Pullbacks aren't lasting, even if the company's fundamentals merit a pullback. 3M (MMM) reported a quarter that was "widely panned" with a "gloomy outlook." The stock is now 3 points above where it reported. Caterpillar (CAT) gave lackluster earnings and a lowered forecast., but its pullback hasn't been a disaster. Emerson Electric (EMR) seemed like the "short of a lifetime" but the stock rose $1 after its disappointing earnings. Apple (AAPL) reported a disappointing quarter, but that was 70 points ago. Amazon (AMZN) might be the next to rise after not-so-good earnings.
Cramer took some calls:
DirecTV (DTV) is a good company, but is at a 52 week high. Cramer would wait for a pullback.
Cramer spoke to the CEO of Charles River Labs (CRL) on Mad Money. He indicated that more Research and Development spending is being allocated to late-stage testing than to early stage testing of drugs. Cramer thinks this is an indication that the recent IPO, Quintiles (Q) is a buy. The company focuses on late-stage testing and has rallied only 7.5% since its IPO last Thursday. Quintiles has been involved in the late-stage testing of 85% of central nervous system drugs and 75% of cancer drugs that have been approved in recent years. Cramer thinks the stock is undervalued and should be trading at 16% higher.
CEO Interview: Matt Ouiment, Cedar Fair (NYSE:FUN)
There is a bull market in theme parks, and Cedar Fair (FUN) is a main beneficiary. FUN yields 5.88% and has gained 173% since Cramer got behind it in 2011, and 43% since the CEO last appeared on Mad Money last July. The company beat earnings estimates and reported that deferred revenue was up 30%, although there were some losses that were seasonal in nature. CEO Matt Ouiment said the company had its best opening weekend in 144 years thanks to the new Gatekeeper rollercoaster. Even though the weather was not fantastic, the crowds came out. Ouiment said that gasoline prices don't impact the company as much as employment, and since the jobs number has improved, he expects more upside. When asked about expansion, Ouiment noted that there are huge barriers to building new theme parks since markets are already taken and there are stringent environmental regulations involved; "You will not see another amusement park built in this country." Still, FUN focuses on attracting larger crowds to its existing parks.
Applied Materials (NASDAQ:AMAT)
Corporate breakups can yield significant gains if executed properly. Cramer thinks the next company that should split itself up is Applied Materials (AMAT). It has a semiconductor business which should thrive as demand returns to the sector, but it also has an LCD display segment and a solar business. While solar is coming back slowly, these latter two segments are a drag on AMAT, which is underperforming its peers in the semiconductor space. Cramer thinks AMAT could trade at 25% higher if it spun off its solar and LCD segments.
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