Cramer's Mad Money - Costco Hits the Big Apple (11/12/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday November 12.

CEO Interview: Jim Sinegal CEO Costco (COST), BJ's Wholesale (BJ)

Although he preferred BJ's Wholesale (BJ) to Costco (COST) in August, Costco is up 20% since then and is close to its 52-week high, while BJ's Wholesale has risen just 12%. Cramer congratulated CEO Jim Sinegal on the grand opening of Costco's first Manhattan store. The Costco store has expanded offerings of products that appeal to the shoppers in the Big Apple, in keeping with Costco's tradition of giving every one of its stores a regional touch. Sinegal says the company is always looking for new ways to discount items; some of its merchandise is 30% less than the same products sold by competitors such as Nordstrom (JWN); its televisions are around $100 less than those found at Best Buy (BBY).

Costco reported a better than expected quarter with a 5% increase in same store sales. The company has strong international exposure with 153 out of 562 of its warehouses operating outside of the U.S. The company turns inventory faster than any other major chain in the country. After talking with Costco's CEO, Cramer declared Costco is a "buy, buy, buy."

A Perfectly Rational Selloff

Cramer dismissed concerns over Thursday's 94 point decline in the Dow and the S&P 500's 11 point dip with the comment; "After a six day rally, it's rational to take profits." While there is no need to worry about profit-taking, the bears insist on using the selloff as a sign of a larger trend down. Cramer evaluated the bearish position.

The bears say the government is concerned about healthcare at the expense of creating jobs. Cramer says that, while true, this isn't exactly news. The large deficit is also not news, and is not a reason for Thursday's decline in stocks. While the bears insist that retail is weak, Cramer points out the sector is much stronger than anyone would have expected a year ago. Oil and copper were down mainly because they had previously enjoyed such huge runs. Homebuilders' conference calls indicate that housing isn't as bad as the bears think, and it will take time for the sector to recover.

The bears yet again are trying to get attention by whining about the market, but Thursday's drop was just a result of investors taking profits; "It would be irrational not to sell something," said Cramer.

CEO Interview: T.J. Rodgers, Cypress Semiconductor (CY)

Cypress Semiconducter (CY) is down 13% since Cramer included it among his mobile internet picks in August. T.J. Rodgers focused the discussion on the company's technology. Cypress produces configureable micro chips that can create a touch-based operating system for smartphones, key cards for hotels, and technology for vending machines to alert the owner when products need to be replenished. Rodgers described Cypress Envirosystems, the company's environmental division which is currently working on special thermostats that can be controlled by a PC. Cramer wouldn't be discouraged from buying Cypress after its decline and would instead consider it a bargain, given the company's cutting edge technology.

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