Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday October 30.
Buffalo Wild Wings (BWLD) roared 9% after a "grand slam" quarter. BWLD reported a 10 cent earnings beat and a 27.9% rise in revenues with same store sales up 4.7%, more than double what the street expected. Those who held onto the stock after its last earnings beat have seen a 36% gain, and the stock has risen 167% since Cramer got behind it in 2011. McDonald's (MCD) rolled out its own wings offering, but did not seem to take market share from BWLD, because of the unique sports, wings and beer experience the restaurant offers.
Given the higher price of wings and the larger sizes of the wings, BWLD introduced the concept of selling portions based on weight rather than on the number of wings, and this has met with success. Its new beer offering from Red Hook is popular, and BWLD's fantasy football parties bring in more customers. While BWLD is focusing on store expansion, CEO Sally Smith said volume growth is more important, and volume has doubled in 10 years. Even on its uptick, Cramer would not take profits and would buy more if it drops.
The market can rally on a Fed policy and fall when the Fed gives the reasons for the policy. Lower interest rates cause stocks to rise, but poor economic numbers, which increase bond buying and lower interest rates, cause the market to fall. Cramer thinks that in a couple of days, stocks may move up again, but he would consider high-yielding bond equivalent stocks.
Cramer took some calls:
Incyte (INCY) has a treatment for rheumatoid arthritis, and Cramer noted that any company that has a drug for this condition tends to rise. If the drug is approved, INCY could see a multi-year move.
Verizon (VZ) was unfairly punished through its guilt by association with the glitch-filled healthcare website. "That is ludicrous," said Cramer. Verizon is a buy under $50.
Agco (AGCO) is suffering from low corn prices, but may be good long term, if commodities recover.
CEO Interview: Nick Akins, American Electric Power (AEP)
Falling interest rates are making bond alternative stocks more attractive. Utilities like American Electric Power (AEP) may be worth buying, but one caveat is that AEP uses a lot of coal and might be vulnerable to government regulations. The company reported a 2 cent earnings beat and raised guidance. The stock has rallied 8% in the last 2 weeks. CEO Nick Akins says the industrial part of the business has been weak and the company is feeling the consequences of sequester. AEP is making the transition from coal to natural gas and so far, has been able to cope with regulations on the use of coal. Cramer likes the fact that AEP yields 4.25%.
CEO Interview: David Wenner, B&G Foods (BGS)
B&G Foods (BGS) has been a consistent performer, but it reported a disappointing quarter, missing earnings and revenue estimates. Management said the reason was increased competition from private label brands and discounts from competitors. The stock fell more than $3. CEO David Wenner acknowledged that the environment is "challenging." Consumers seem to be snacking more, and BGS is moving into snacks, which are expected to comprise 25% of sales next year. Wenner expects the grocery section of the business to be flat or up next year and plans to grow the company organically and through acquisitions. The stock has risen 212% since Cramer got behind it 3 years ago. He would hold BGS and buy more on a decline.
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