Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday November 6.
Growth Is Not Enough: Tesla (NASDAQ:TSLA), Twitter (NYSE:TWTR), NPS Pharma (NASDAQ:NPSP), Pioneer Natural Resources (NYSE:PXD), Chevron (NYSE:CVX), Exxon (NYSE:XOM), Hain Celestial (NASDAQ:HAIN), Microsoft (NASDAQ:MSFT), Ford (NYSE:F), Hertz (NYSE:HTZ)
Stocks cannot live on growth alone, but the underlying companies also need to execute. The problem with high-flying growth stocks is that one thing could go wrong, and the stock will get hit. Tesla (TSLA) reported better than expected numbers, but the company is facing supply, rather than demand, issues. Since Tesla had run up 346%, management could not afford to say anything negative. Twitter (TWTR) is another growth stock that might get taken down on any question about slowing. Cramer thinks it is likely that Twitter will jump up Thursday morning on its IPO and drop back down. He would "flip" Twitter. NPS Pharma (NPSP) reported a decent quarter, but a bit of negativity brought it down along with other biotechs. Even though Pioneer Natural Resources (PXD) said positive things, it had run up 100% going into earnings and was sold off. Larger oil companies like Chevron (CVX) and Exxon (XOM) saw their stock prices rise. Open Table (NASDAQ:OPEN) was one growth stock that rallied dramatically after a positive report, as well as Hain Celestial (HAIN). Microsoft (MSFT) was up on news that Alan Mulally might leave as CEO of Ford (F) and run Microsoft. Cramer is not confident about tech here, and would take gains in MSFT.
Cramer took a call:
Hertz (HTZ) got hit on earnings. Cramer thinks HTZ needs to change its business structure.
CEO Interview: Pioneer Resources, Scott Sheffield
Pioneer Resources has seen a tremendous rise, but was ripe for a pullback. Earnings per share rose 54%, but were less than what the street expected, and production was slightly lower than the company projected. The stock fell from $213 to $210 after earnings and fell another 5.4% on a downgrade. "This is the pullback we've been waiting for," said Cramer. Pioneer has significant assets in the Spraberry Wolfcamp shale, the second largest oil shale in the world. CEO Scott Sheffield discussed expanding assets in the shale and expects 14% production growth.
CEO Interview: Gary Evans, Magnum Hunter (MHR)
"Accounting irregularities equal sell," Cramer says often. However, when those accounting regularities are cleared up, the stock can be a buy. This is the case with Magnum Hunter (MHR) a company with exposure to the major shales in the U.S.: Bakken, Utica and Marcellus. The company had problems with its balance sheet and accounting issues that caused its stock to drop to $2. The company fired its accounting firm and replaced it with an improved one, and its accounting problems were cleared up relatively quickly. Now the stock is at $7, and MHR is a leaner, meaner company. When asked why the company doesn't reduce its exposure to natural gas, CEO Gary Evans replied that he is bullish on natural gas for the long term. The oil and gas are hedged, so the company is protected from fluctuations in price.
CEO Interview: Dr. Francois Nader, NPS Pharmaceutical
Cramer recommended NPS Pharmaceutical last year when it was trading at $8 because of its revolutionary treatment for short bowel syndrome. The company announced another drug, this one to treat hypoparathyroidism, but when the stock had already risen to $32, Cramer suggested taking at least half the position off the table. NPS reported a strong quarter and raised guidance, but the street's expectations were so high, the stock fell 15%. NPS is still up 188% from where Cramer recommended it, and has strong revenues and significant demand for its treatments. CEO Francois Nader discussed finding multiple applications for the treatments, including the use of the short bowel syndrome for pediatric care.
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