Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday January 6.
The Worst of the S&P 500 in 2013: Newmont Mining (NEM), Cliffs Natural Resources (CLF), Edwards Lifesciences (EW), Peabody (BTU). Other stock mentioned: Randgold (GOLD)
Cramer discussed the worst performers of the S&P 500 for 2013. Newmont Mining (NEM) looked promising with a new mine and spending cuts, but its growth is paltry, and gold got hammered last year. Those who want to buy a miner should look at Randgold (GOLD).
Cliffs Natural Resources (CLF) is suffering because of oversupply of iron ore. Cramer doesn't think this problem will be remedied soon. It has the highest short interest of the S&P 500 for a good reason.
Edwards Lifesciences (EW) might be a buy because it has been battered so mercilessly. It seems that any good news at all could move the stock up. However, there is a lot of competition in the medical devices space. It might be a spec, but Cramer would do thorough homework on it before buying.
Peabody (BTU) is the best house in a bad neighborhood, but coal is a "horror story." Half of its revenues come from the U.S., and President Obama seems determined to wage a war against coal. Cramer would stay away.
2014 is likely to be the year that hiring picks up, and a great way to play the trend is through uniform rental stocks. Cintas (CTAS) is the main player and rose 55% in 2013, but it is so well-known that it is unlikely to have much upside. Aramark (ARMK) is another uniform rental company, but uniforms are only a small part of its business. Unifirst (UNF) specializes in higher-end uniforms, but Cramer would not recommend it because of execution issues. His pick is G&K (GK), which is a relatively unknown company that has seen a dramatic improvement since it cut costs during the recession. Management expects to see margins up 12-13% this year. The company expects aggressive earnings growth and may issue a special dividend. It sells at an inexpensive 19 times earnings with a 12% growth rate.
Liberty Media (LMCA), Sirius XM Radio (SIRI), Charter Communications (CHTR), Pandora (P), Barnes & Noble (BKS)
On Friday, it was announced that Liberty Media (LMCA) is going to buy a 48% stake in Sirius XM Radio (SIRI). The company already owns 52% of the company and is a diversified media powerhouse: it owns the Atlanta Braves, a part of Barnes & Noble (BKS) and recently bought a stake in Charter Communications (CHTR). As part of the deal, Liberty is releasing special shares. Those who hold Sirius shares will get special Liberty shares in addition. Citigroup downgraded Liberty, but Cramer couldn't disagree more with the downgrade. Cramer has much confidence in Liberty's management, which has a proven track record of unlocking value from its acquisitions. Cramer called CEO John Malone a "genius" and thinks this acquisition will lead to others, perhaps Pandora (P). Even though Liberty is up 7% on the news, Cramer thinks it is worth buying.
The Dow closed down 45 points, but opened up. Cramer made the observation that usually when the market opens up on Monday, there is a buyable dip. Monday was a good time to buy Celgene (CELG) which was unfairly downgraded by Goldman Sachs. The analyst felt it had risen too far too fast, but Cramer thinks Celgene's jump is justified and it may have further upside with its Revlimid franchise and its new drugs for cancer and arthritis. Goldman Sachs is worried about competition, but Celgene, under the leadership of CEO Bob Hugin, will continue to deliver. It has risen from $50 to $162 since Cramer first got behind it.
Cramer took a call:
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