Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday December 13.
10 Earnings To Watch In The Week Ahead: Jabil Circuit (JBL), Fedex (FDX), General Mills (GIS), Lennar (LEN), Oracle (ORCL), ConAgra (CAG), Darden (DRI), Nike (NKE), Pier One Imports (PIR), Finish Line (FINL). Other stocks mentioned: Toll Brothers (TOL), Myriad Genetics (MYGN), Tesoro (TSO), Apple (AAPL)
During the weekend, PMI numbers will be released from China and later from Europe. These numbers might set the tone for the week. In addition, there is a Fed meeting on Wednesday. Cramer does not fear taper as much as others, but the meeting may have an effect on stocks. Cramer discussed earnings to watch in the week ahead.
Fedex (FDX) made a journey from the $80s to the $130s and has been rebounding on global growth and restructuring.
General Mills (GIS) has gone from being a strong defensive stock to one that has a large short position. With bond equivalents suffering because of the possible end of ultra low interest rates, Cramer thinks GIS might get sold no matter what.
Oracle (ORCL) is not worth owning because cloud plays are taking serious market share from Oracle.
ConAgra (CAG) might have bitten off more than it could chew with the Ralcorp acquisition, but it is worth checking in to see if things are going well. Cramer would not bet on it ahead of the quarter.
Darden (DRI) has significant potential growth with new management. Darden tends to get hit on earnings, and Cramer would buy it after it reports.
Nike (NKE) has come down nicely and should give strong earnings. Cramer would buy it ahead of earnings.
Pier One Imports (PIR) disappointed last time, but Cramer thinks it will deliver. PIR is a buy ahead of earnings.
Finish Line (FINL) will probably report a strong quarter.
Cramer took some calls:
Myriad Genetics (MYGN) has exposure to cancer research, which is a space that is working. Cramer would buy, but only as a spec.
Tesoro (TSO) benefits from the price differential in oil, and Cramer likes Tesoro.
Know Your IPO: AMC Entertainment (AMC). Other stocks mentioned: Restoration Hardware (RH), Hilton (HLT)
Cramer discussed AMC Entertainment (AMC), the second largest cinema operator in the U.S. It will be having its IPO this week and is expected to price between $18-20, although Cramer believes in the story so much, he would pay up to $23 in the aftermarket. Many people believe that movie theaters are in secular decline, but attendance this past year was at an all-time high. AMC has 36% market share in most of the major American cities and can charge more for tickets and refreshments. It has the highest concession sales per moviegoer in the industry and is building out Imax theaters. The company is installing electric recliner seats, and although the restructuring is expensive and reduces capacity, the changes have dramatically increased attendance in AMC's theaters to the point where the remodeling is paid for in the first year. AMC is also beginning to offer seatside food service, bars and lounges. Cramer thinks this is one of the few IPOs worth buying in the aftermarket.
Cramer took some calls:
Restoration Hardware (RH): Investors panicked when the co-CEO left, but "everything was on target" in the conference call. "That was a good quarter," said Cramer.
Hilton (HLT) dipped after its IPO, and Cramer thinks it has at least another 4 points. It is not too late to buy Hilton.
CEO Interview: Doug Tough, International Flavors and Fragrances (IFF)
International Flavors and Fragrances (IFF) produces flavors and fragrances for personal care items, foods and household products. The company uses technology to develop proprietary tastes and smells. It is currently 5 points off its 52 week high and has given a 41% return since Cramer got behind the stock 18 months ago. IFF is partnering with biotech companies to perfect its innovation. CEO Doug Tough thinks the next quarter is going to be strong; "The pipeline is as good as it has ever been."
CEO Interview: Tarek Sherif, Medidata Solutions (MDSO)
Medidata Solutions (MDSO) is a cloud play for pharma and biotech companies. MDSO runs clinical trials on cloud-based software, and can dramatically cut the time required for trials and save companies money. The stock has risen 193% year to date and has a large multiple of 70 compared to its 23% growth rate. While Cramer doesn't usually like to recommend a stock with a valuation more than double its growth rate, MDSO's addressable market is huge, and it has accelerated revenue growth. The stock has risen 50% since Cramer last spoke to CEO Tarek Sherif in July. Cramer thinks the stock could go higher.
A Lesson From Adobe (ADBE)
Adobe (ADBE) reported a quarter that seemed like a huge earnings miss, but those who know Adobe know that it trades off of cloud orders and subscriptions and not earnings per share. Sure enough, subscriptions were strong, the shorts had to cover, and the stock gained $6.90, or 12%. The moral of the story; not all stocks trade on earnings per share. Investors need to know what metrics move their stocks the most.
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