Cramer's Mad Money - Cramer Loves Martha (9/15/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday September 15.

Apple (AAPL), Nokia (NOK)

Cramer revised his $200 target for Apple, since an expected change in the FASB (Financial Accounting Services Board) regulations will benefit Apple. Currently, Apple can recognize earnings on its iPhone and other products only after a 24 month period, and this two year delay has been penalizing the company unfairly. Less successful competitors like Nokia are not tied down by the rule. Fortunately this rule is expected to be revised in the next few days, which will mean earnings should rise from $9 to $11 per share. Cramer sets his new target for the stock at $264, and urged investors to get into the stock before the rest of The Street gets wind of this news.

Off the Charts: Flextronics (FLEX)

Technician Dan Fitzpatrick says Flextronic's chart is a thing of beauty; after testing its 50-day moving average 5 times in the past few months, the stock has surpassed it and is most likely headed higher. Cramer likes Flextronics' fundamentals: its utilization rate is 60-70%, inventories are down, it has a diverse customer base spread across the globe, and is not at the mercy of any single country's economy. The company should expect higher margins from higher-end products and 21% of its business is in mobile devices, a group that is on fire. At 12 times 2011 earnings, Flextronics is cheap and is best of breed.

CEO Interview: Charles Koppelman, Martha Stewart Living Omnimedia (MSO), Home Depot (HD), Macy's (M), Costco (COST)

Cramer invited Charles Koppelman onto the program to discuss MSO's new partnership with Home Depot, and continued partnership with Macy's as well as plans to distribute products at Costco. The company has reinvented itself, and instead of having its main focus on publishing, has been branching out into retail, merchandising and media. The main challenge, says Koppelman, is the media doesn't understand merchandising and vice versa, but juggling the company's various elements is part and parcel of making Martha Stewart Living Omnimedia work. Even in an economic downturn, the company's magazines have been popular and have attracted a broad and loyal readership.

CEO Interview: James Taiclet, American Tower (AMT)

Given the desire for the average wireless consumer to have the same internet capability on the go as they do in their offices, demand for bandwidth is growing in leaps and bounds, and with it, demand for towers. Taiclet says his company is ready to meet the challenge and is able to execute new concepts quickly. Given the complex depreciation rules, Taiclet says American Tower should be valued based on its generous amount of cash rather than on earnings. He points out the company's 70% gross margins are very high for the industry. When asked if Obama's stimulus plan will benefit the company, Taiclet said the plan is too fragmented to affect American Tower dramatically.

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Comments

[HChang:]

Don't agree. I do business with Flex. They are in deep shit and agressively cutting costs to stay afloat. The price has over run too much from fair value of $4.

Sep 16 08:54 AM