Cramer's Mad Money - The Wild West of After Hours Trading (2/12/10)

by: Miriam Metzinger

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

Beware of After Hours Trading: Panera (NASDAQ:PNRA), Buffalo Wild Wings (NASDAQ:BWLD), Chipotle Mexican Grill (NYSE:CMG), Chesapeake Energy (NYSE:CHK), Whole Foods (WFMI), Agnico Eagle Mines (NYSE:AEM), Bucyrus (NASDAQ:BUCY), First Solar (NASDAQ:FSLR)

"I used to call after hours trading the Wild West because there are no rules," said Cramer. Apparently, the Wild West hit Buffalo Wild Wings (BWLD) last week, when the company's disappointing quarter sparked melodramatic headlines as journalists speculated about a "fast food epidemic" plaguing the sector. Chipotle Mexican Grill (CMG) and Panera (PNRA) were brought down after hours because of this overreaction, but were up again the next day as Chipotle's price target was revised upwards. However, not all stocks that are "guilty by association" will be so lucky and recover so quickly from after hours beatings.

Some earnings to look forward to in the coming week: Look for WholeFoods (WFMI) to indicate the health of the consumer. On Wednesday, Chesapeake Energy (CHK) should discuss drilling costs and new discoveries, and Agnico Eagle Mines (AEM) will likely indicate a rise or fall of its mining costs. Cramer thinks Bucyrus' (BUCY) comments on China will be more important than its numbers and First Solar (FSLR) will discuss how much of its business needs government subsidies to stay afloat.

Wyndham Worldwide (NYSE:WYN)

Wyndham's (WYN) 200% dividend increase, which will triple the amount from 4 to 12 cents a share, is a confirmation of statements from its peers that leisure stocks are performing much better than expected. Cramer likes the fact that Wyndham is buying back stock and has adjusted its business model to a fee-based structure. While the balance sheet is not perfectly clean, the company still has $870 million borrowing power compared to $3.5 billion in debt. In any case, the huge dividend increase makes Wyndham Worldwide a "screaming buy" according to Cramer.

Entegris (NASDAQ:ENTG)

Citigroup and Bank of America disagree about Entegris, which provides thousands of products to keep chips and disk drives contamination-free during the manufacturing process. Citigroup sees an oversupply danger and thinks the recent rally is setting the stock up for as much as a 30% decline. Bank of America thinks Entegris is more leveraged than its peers and the internet tsunami will put any concerns about oversupply at bay. The fact that inventory has been slashed by 20% and sales have grown by 30% make Entegris' prospects look brighter. Entegris could also be an attractive takeover target, and Cramer predicts the stock will go from $4 to $9.

CEO Interview: Herbjorn Hansson, Nordic American Tanker (NYSE:NAT)

The Street was disappointed by Nordic American Tankers' (NAT) earnings, but Cramer would give the stock another chance, since it is continuing to build its fleet, day rates are rising and the company has increased its dividend 150% from 10 to 25 cents per share. The company is free of debt and while some complain that share offerings are diluting stock prices, the money is being used to build the fleet and ultimately benefit the company and stockholders.

Hansson says the company's strategy is to make money during boom times and to use down times to expand the fleet. He is excited by NAT's potential in BRIC countries. Hansson says the good old days of $30,000 day rates for tankers are likely to come again. Cramer is bullish on Nordic American.


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