Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday May 30.
The Great Gatsby Index Revisited: Michael Kors (NYSE:KORS), Tiffany (NYSE:TIF), Lululemon (NASDAQ:LULU), Coach (NYSE:COH), Panera (NASDAQ:PNRA), Starbucks (NASDAQ:SBUX), Nordstrom (NYSE:JWN), Toll Brothers (NYSE:TOL), Saks (NYSE:SKS), Whole Foods (NASDAQ:WFM), Estee Lauder (NYSE:EL). Other stocks mentioned: Wal-Mart (NYSE:WMT), Target (NYSE:TGT), J.C. Penney (NYSE:JCP), Chevron (NYSE:CVX), Dole Foods (NYSE:DOLE), Lincoln Electric (NASDAQ:LECO)
Although there are many challenges facing the middle and working class consumers, as signaled by disappointing numbers from Wal-Mart (WMT), J.C. Penney (JCP) and Target (TGT), high-end retail is on fire. Since Cramer formed the "Great Gatsby" index 2 months ago, its return has been double that of the S&P 500. Michael Kors (KORS) is up 30% and is even doing well in Europe. Lululemon (LULU) had a pants recall a few months ago, but the stock is doing so well that "no one can recall the recall." Those who were betting against Whole Foods (WFM) and assumed it would miss its numbers again were wrong when it surpassed expectations. Tiffany (TIF) has benefited from its popularity in Japan, and Coach (COH) rallied 17% thanks to its new line of high-end footwear. There were some disappointments in the index; Estee Lauder (EL) is up only 6%, while many of the other stocks have risen by double digits. Nordstrom (JWN) reported a disappointing quarter. The biggest winner in the index is Saks (SKS), which has risen 32%.
Cramer took some calls:
Chevron (CVX) is a remarkable stock and should perform well even if oil just hangs in there.
Dole Foods (DOLE) should be higher, but Cramer questions some decisions management is making; "The CEO should come on the show and explain."
Lincoln Electric (LECO) is a stock that should go higher.
Could The Royal Bank of Scotland (NYSE:RBS) Have the Same Upside as AIG (NYSE:AIG)? Other stocks mentioned: Banco Santander (NYSE:SAN), Banco Bilbao Vizcaya Argentaria (NYSE:BBVA), JPMorgan (NYSE:JPM), New York Community Bancorp (NYSE:NYCB)
AIG (AIG) has been roaring since the Treasury Department sold off its stake. A good indication of upside in a company that the government has bailed out is the government selling its stake; the move is seen as a vote of confidence that the company can stand on its own feet. AIG has risen 50%, double the rate of the S&P 500, since the government started selling its stake in 2010. Currently the British government owns 82% of the Royal Bank of Scotland (RBS). It is predicted that the U.K. government may begin selling off RBS within the year. Cramer thinks RBS may have similar upside to AIG. Cramer acknowledges that his bullishness on RBS is contrarian, since many are negative on the stock. The company has many strong divisions, including retail, corporate and commercial banking. However, its non-core and markets divisions are dragging RBS down. Some successful segments, such as the Irish business and the U.S. Citizens bank, could be spun off to create more value for RBS.
Cramer took some calls:
New York Community Bancorp (NYCB) had a dividend Cramer thought was worrisome at first, but now he is not concerned about the yield. Cramer prefers JPMorgan, since it still has to play catch-up with other banks, and is a holding in Cramer's charitable trust.
CEO Interview: Cheryl Bachelder, AFC Enterprises (AFCE)
AFC Enterprises (AFCE) is the owner of Popeye's and Louisiana Kitchen. The company has undertaken a huge effort to remodel its restaurants and revitalize its brand. Sales in refurbished stores increased an average of 4%. Earnings were in-line, revenues rose 14% and same store sales were up 4.5%. The stock has risen 54% since Cramer recommended it in August. "We want to keep the fizz in product innovation," said CEO Cheryl Bachelder. She added that the company could put up 1,000 more stores in the U.S. and not be saturated. "We expect good things from chicken (prices) this year," she said. Bachelder spoke of the popularity of the food offerings overseas, and the company has an advantage that chicken and rice are foods with global appeal.
CEO Interview: Sam Thomas, Chart Industries (NASDAQ:GTLS)
Chart Industries (GTLS) has risen 155% since Cramer got behind it in 2011 and 19% since CEO Sam Thomas last appeared on Mad Money in mid-March. GTLS makes equipment that aids in the production of liquified natural gas, or LNG, a form of the fuel that allows it to be exported more easily. The company also produces gases for industry and biotech. The latter two divisions, which together make up 45% of the company, have been performing particularly well. Sales in China are increasing dramatically. While there are obstacles to building new natural gas facilities, Thomas expects 5 or 6 to be built in the next decade.
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