Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday October 29.
9 Zombie Stocks: Chipotle Mexican Grill (NYSE:CMG), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX), Deckers (NASDAQ:DECK), Intuitive Surgical (NASDAQ:ISRG), Express Scripts (NASDAQ:ESRX), Salesforce.com (NYSE:CRM), Amazon (NASDAQ:AMZN), F-5 Networks (NASDAQ:FFIV). Other stocks mentioned: Walgreen (WAG), Millennial Media (NYSE:MM)
Cramer revisited his CANDIES and FADS CAN indexes he formed in 2010. CANDIES and later FADS CAN (formed when he replaced Intuitive Surgical (ISRG) and Express Scripts (ESRX) with F-5 Networks (FFIV) and Amazon (AMZN)), are comprised of high momentum growth stocks, and in honor of Halloween, he revisited these "zombie" stocks to find that some have come back from the dead, some never died and a few just barely seem to be alive.
Chipotle Mexican Grill (CMG) has been a comeback story and has risen 285% since 2010. Last July, its same store sales were less than expected, and many felt CMG's growth days were over. Since then, the stock has bottomed and has been roaring higher. CMG can double its store count, and while its multiple is high -- 40 compared to a 21% growth rate-- the stock is worth it, but Cramer would wait for a dip to buy.
Apple (AAPL) is up 101% since 2010, and after peaking at $700, got poleaxed on worries about competition. Apple fell to $400, but is working its way higher on news that it is taking market share and its gross margins are improving. Apple is cheap, with a multiple of 8 and a 15% growth rate.
Netflix (NFLX) has risen 225% since 2010 and has seen one of the biggest comebacks. It is growing subscriber count rapidly.
Deckers (DECK) has been a disappointment, and is up 50% since 2010. DECK was a high flyer, but it fell dramatically as the unseasonably warm winter affected Ugg boot sales and the sheepskin used to made the boots rose in price. Since then, it is using alternate material and it seems that Deckers may come back.
Salesforce.com (CRM) has been a controversial stock and has risen 155% since 2010. It has a high multiple but has rebounded every time it has been hit. Billings have increased by 38% and revenue might reach $4 billion. Its Deamforce conference next month may be a major catalyst.
Amazon (AMZN) has risen 115% since Cramer got behind it in 2010, and it has risen consistently. Amazon is unstoppable, and reported accelerated revenue growth of 27% and a 240 point improvement in gross margins.
F-5 Networks (FFIV) is a network equipment company that declined at first, but has rallied. It reported a strong quarter with the biggest product refresh in 3 years. The company is brimming with cash, trades at a multiple of 13.6 with a 14% growth rate. FFIV is a buy right here.
Intuitive Surgical (ISRG) was removed from CANDIES and is up just 17% since 2010. It has fallen 200 points from February. Cramer thinks it is still a good company, but it lacks the growth it used to have, and its da Vinci sales have been disappointing.
Express Scripts (ESRX) is a pharmacy benefit manager that had a long battle with Walgreen (WAG) that was eventually resolved. ESRX is good, but it is no longer a momentum stock.
Cramer took some calls:
Millennial Media (MM) is in the penalty box, because it has missed a few quarters. MM has a good business model, but has been too disappointing.
10 Good Stocks Gone Great: Best Buy (NYSE:BBY), Boeing (NYSE:BA), Bristol Myers (NYSE:BMY), Chipotle Mexican Grill (CMG), Core Labs (NYSE:CLB), Federal Express (NYSE:FDX), Gamestop (NYSE:GME), Kimberly Clark (NYSE:KMB), Schlumberger (NYSE:SLB), Whirlpool (NYSE:WHR)
Cramer discussed 10 stocks that have been performing well and may see even more upside:
Best Buy (BBY) is a stock people thought would drop, because it made a huge move. BBY reported a strong quarter and has run from $24 in June to $42.
Boeing (BA) is up 71% for the year and the shorts suffered, because, in spite of some issues, its Dreamliner has been a success. BA is headed for a multi-year move.
Bristol Myers (BMY) faced patent expiration, but the stock has taken off on news of a new drug. BMY gained 5 points in just two days.
Chipotle Mexican Grill (CMG) has accelerating growth and is the strongest stock in the restaurant space.
Core Labs (CLB) did not move for almost a year, but reported a breathtaking, breakout quarter.
Federal Express (FDX) is a stock that worried many because of the crisis in consumer confidence, but in spite of that, it reported a remarkable quarter, jumped from $110 to $133, and is a cheaper and leaner company.
Gamestop (GME) has had an "insane" run from $31 in May to $55. GME is still getting upgrades and is benefiting from the new game cycle.
Schlumberger (SLB) has risen from $71 to $94 even though oil prices have been declining. SLB creates technology to make it easier and cheaper to find oil. SLB reported a stellar quarter.
Whirlpool (WHR) has taken market share, has been upgraded and reported a good quarter.
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