Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday October 31.
Bubble Talk: Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), SolarCity (NASDAQ:SCTY), Facebook (NASDAQ:FB), Starbucks (NASDAQ:SBUX). Other stocks mentioned: Chart Industries (NASDAQ:GTLS), Expedia (NASDAQ:EXPE), US Airways (LCC), Delta (NYSE:DAL)
The street is obsessed with bubble talk. Cramer doesn't think in terms of the market as a whole as overvalued, but individual stocks like Amazon (AMZN), Netflix (NFLX) and SolarCity (SCTY) that have rich valuations. Some of these valuations might be justified, since "cult stocks" have a tendency to go higher, and those who have positions in these stocks care more about growth trajectory than short-term profitability. The bubble talk brought down Facebook (FB) and Starbucks (SBUX), even as both reported strong quarters. Cramer sold some FB from his charitable trust ahead of earnings, but he thinks that either stock can be bought after Thursday's decline. There is no need to be nervous about high-flying stocks; just take profits now and again.
Cramer took some calls:
Chart Industries (GTLS): Cramer was surprised by the disappointing quarter and would wait on GTLS.
Expedia (EXPE) has been in the wilderness, but now it is in "The Promised Land of travel."
CEO Interview: Craig Jelinek, Costco (NASDAQ:COST)
Costco (COST) reported a 6 cent earnings miss on weaker than expected revenues and same store sales that rose 3% -- less than the street was expecting. However, Cramer recommended digging deeper into the report; Costco is doing well. Traffic is rising, markets are strong and Costco plans to double its store count. Holiday items, apparel, hardware are all strong. CEO Craig Jelinek admitted that TV sets and computers were weak and that Costco needs to expand its cosmetics offerings. Organic and natural foods are selling well; "That trend is going to be big for us."
CEO Interview: Dinesh Paliwal, Harman (NYSE:HAR)
Harman (HAR) is the number one player in all of its businesses, from high-end speakers to dashboard interface systems. Europe is Harman's largest market, and the comeback on the Continent should benefit HAR. The company reported an 11 cent earnings beat on revenues that increased 70.4%. Orders and backlog are rising, and the stock jumped 13% in a single day. Even after this epic move, the stock still trades at a multiple of only 17 compared to its 18% growth rate. CEO Dinesh Paliwal discussed strong productivity in its Mexican and Hungarian factories and the high barriers to entry which enable it to be best of breed in its industry.
Jim Cramer's Action Alerts PLUS: Trade right alongside a Wall Street pro! Start your 14-day FREE trial today.
Get Cramer's Picks by email - it's free and takes only a few seconds to sign up.