Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday August 29.
Zillow (Z) jumped 6 dollars on Thursday. It is valued at $3.6 billion and has no real earnings, while its peer Realogy (RLGY) is a $6 billion company with significant profits. Why is Zillow up 245% for the year while Realogy, which is involved with 26% of residential real estate transactions with a broker, is up only a few percentage points? Zillow has the shorts to thank. So many shorts were betting against Zillow (18% of its stock is sold short), that now they are having to cover their short positions and the stock is rising higher. Buyers need to know what they are buying, but shorts should know what they are betting against.
Vodafone (VOD) needs a pullback before it can be bought.
Yelp (YELP) has the best revenue growth of almost any company. It is expensive, but it should go higher.
Salesforce.com (CRM) is the ultimate cloud computing firm that is eating into traditional tech. The software as a service company has all encompassing solutions for enterprise clients. The stock has risen 676% since Cramer got behind it in 2008. CRM reported a 2 cent earnings beat with revenues that rose 31% and deferred revenues increasing 34%. CRM is number one in sales and in service. The company has an alliance with Oracle (ORCL) to help the latter expand into the cloud. CEO Marc Benioff expects the upcoming Dreamforce Conference to be the world's largest, with 120,000 people in attendance and many more viewing it online.
Wendy's (WEN) and Rite Aid (RAD) have at least 2 things in common; they are both number 3 in their categories and both may be turnaround stories. Wendy's has rallied 62% for the year and RAD has gained 150%, but Cramer thinks both may have further upside. Wendy's has undertaken a massive turnaround, with a 2 tiered menu that appeals to higher end and lower end customers, and has items that appeal to both healthy and to more indulgent eaters. WEN is revamping its stores and has seen a 25% increase in sales from those locations that have received makeovers. It is making more of its stores' franchises and will use the extra cash to expand abroad. The stock trades at a multiple of 28 with a 17% growth rate; it is not cheap, but Cramer would wait for a pullback.
Rite Aid has gone from "zero to hero" in less than a year; it has remodeled stores, cleaned up its balance sheet is focusing more on health and wellness and has improved efficiency in filling prescriptions. The stock has a multiple of 13.2 and an 8% growth rate; Cramer would buy on any decline.
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