Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday July 31.
CEO Interview: Sally Smith, Buffalo Wild Wings (BWLD)
Buffalo Wild Wings (BWLD) is opening its 1,000th location early next year and, after its stock got hit, roared back following a strong earnings report. BWLD beat earnings estimates by 9 cents on revenues that grew 27%. The Street was worried about higher chicken wing prices, but BWLD managed food costs well. It reported a 4% rise in same store sales, slightly below the Street's expectations of a 4.6% gain. With football season approaching, same store sales are likely to improve. The company is shifting towards a more franchise-based model, which insulates the parent company from fluctuations in food costs.
The stock has delivered a 95% gain since Cramer got behind it in 2011. CEO Sally Smith discussed the strong sales to costs ratio and is confident that the football season will be a catalyst for BWLD: "We like to think we are the destination to watch the NFL." The company has adjusted its portions for greater consistency. Customers are given more wings if the wings are small and slightly fewer if the wings are jumbo size. BWLD has bought a minority stake in PizzaRev as it looks for other growth opportunities for the future. Its craft beer, Red Hook, is selling well. "Sally Smith is a bankable CEO," said Cramer, "and this is a bankable stock."
Celgene (CELG), Trius Therapeutics (TSRX), Cubist Pharmaceuticals (CBST), Anheuser-Busch Inbev (BUD), Diageo (DEO), Boston Beer (SAM), Air Products and Chemicals (APD), Questcor (QCOR), Herbalife (HLF), Netflix (NFLX), Tesla Motors (TSLA), Facebook (FB), Apple (AAPL), AT&T (T), AGCO Corporation (AGCO), Ford (F)
Cramer discussed the performance and earnings of individual stocks to make the point that fundamentals of companies are moving the market at least as much, if not more, than concerns over the Fed's next move. Celgene (CELG) is up 89% for the year, and Cramer thinks it can go even higher if approvals for drugs come through. Trius (TSRX) is working on special antibiotics that will kill "superbugs," and it rose dramatically on news that it will merge with Cubist Pharmaceuticals (CBST). Trius has seen a 116% gain in just three months. Questcor (QCOR) is a heavily shorted biotech, but it keeps moving higher. Beer and spirit companies like Anheuser-Busch Inbev (BUD), Diageo (DEO) and Boston Beer (SAM) reported strong results.
Air Products and Chemicals (APD) jumped on news that Bill Ackman may be buying a large stake in the company, and the controversial stock Herbalife (HLF) rose on reports that George Soros will be buying shares. Netflix (NFLX) and Tesla Motors (TSLA) may be "cult stocks," but may give further rewards for those who don't mind risk. Facebook (FB) has pulled back slightly, but Cramer thinks this holding for his charitable trust is going to go higher. Apple (AAPL) might see an uptick if a ban on its selling its iPhone 4 to AT&T (T) is lifted. AGCO (AGCO) is a strong stock in a rather weak agriculture sector.
Cramer took a call:
Ford (F) may go to $20 or even to $22 and could raise its dividend.
How could Expedia (EXPE) and TripAdvisor (TRIP) report such wildly divergent results when Expedia was once the parent company of TRIP? Shouldn't their performances be similar? TRIP blew away the numbers and the stock rose 16% in a single session. EXPE missed estimates and the stock fell 27% the following day. TRIP is an entirely different company than EXPE; it is a social media travel play while EXPE is an online travel agent. Does that mean that selling ads for hotels and flights is more profitable than selling actual hotel reservations and airline tickets? It's not that simple. TRIP's main advantage is that visitors to the site spend a lot of time there, and there is significant traffic. By the time visitors go to an online travel agent, they have already made up their minds from browsing TRIP, and may pay less attention to EXPE's ads. In addition, EXPE is experiencing growing pains from a recent acquisition. Cramer doesn't think EXPE is in a position to compete successfully with TRIP right now.
Cramer would buy Priceline (PCLN), which has been his favorite in the industry. The company has strong exposure to Europe and it appears that Europe is bottoming. In addition PCLN has Kayak and a great mobile app. Cramer would buy a portion of a position in PCLN before it reports earnings next week. While it carries an $875 price tag, the stock is inexpensive, and trades at a multiple of 18. For the risk averse, Cramer recommends buying PCLN with deep-in-the-money call options.
Cramer took some calls:
Wyndham Worldwide (WYN) may be facing competition, but is performing well and is buying back stock.
MGM Resorts (MGM) is a strong casino stock that will benefit from the Las Vegas comeback.
Disney (DIS) doesn't usually suffer off-season because ESPN is as major a component of the company as its theme parks.
CEO Interview: Jonathan Bush, Athenahealth (ATHN)
Athenahealth (ATHN) provides cloud-based software for collecting and storing healthcare data. The company helps hospitals and doctor's offices save time and cash and facilitates collecting from insurance companies. ATHN has 35% market share in the medical records business. Earnings were not as strong as expected, but one issue could be new contracts the company has to integrate. The stock has risen 35% since Cramer recommended it in January. With its acquisition, CEO Jonathan Bush believes that ATHN can double the number of doctors it works with. The main driver for ATHN is orders, which are steadily increasing.
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.