Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday January 10.
11 Earnings to Watch in the Week Ahead: JPMorgan (JPM), Wells Fargo (WFC), Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), Capital One Financial (COF), PPG Industries (PPG), United Health (UNH), General Electric (GE), Morgan Stanley (MS), Schlumberger (SLB). Other stocks mentioned: Lennar (LEN), Toll Brothers (TOL), PulteGroup (PHM), Gildead (GILD), Biogen Idec (BIIB), Celgene (CELG), Regeneron (REGN), Intercept Pharmaceuticals (ICPT), American Airlines (AAL), Chevron (CVX).
The jobs report Friday was worse than expected, but that is good news for stocks that do well in a low interest rate environment. Cramer would look at homebuilders Lennar (LEN), Toll Brothers (TOL) and PulteGroup (PHM). The JPMorgan Healthcare Conference is a highlight of the week, and although biotechs have been laggards, this conference has historically created upside for the sector. Cramer's favorite biotechs are still Biogen Idec (BIIB), Regeneron (REGN), Celgene (CELG), Gilead (GILD). With the monster move from Intercept Pharmaceuticals (ICPT), Cramer would keep an eye out for under the radar biotechs, and he suspects a growth-challenged large pharma might consider buying ICPT. Cramer discussed earnings to watch in the week ahead.
JPMorgan (JPM) and Wells Fargo (WFC) kick off earnings season with their reports. JPM is stilled mired with lawsuits, but that doesn't seem to affect its stock price. Cramer hopes that 2014 will be the year that JPM's fundamentals are the main concern for shareholders.
Bank of America (BAC) is currently Cramer's favorite bank stock, and with plenty of cash, it might issue a dividend or a buyback.
Capital One Financial (COF): Cramer expects a strong quarter.
United Health (UNH) is winning in the new world of healthcare.
PPG Industries (PPG) has been performing well and should report a strong quarter.
Schlumberger (SLB) is the oil service king and is a great gauge on where oil is going, but since oil prices have been falling, its results are uncertain.
Cramer took some calls:
American Airlines (AAL): In spite of the many winter cancellations, Cramer thinks airlines "are printing money." He would buy AAL, because many of the other major players have moved up.
Chevron (CVX): Not excellent, but "pretty darn good."
Cramer discussed long-term multi-year themes that make certain stocks and sectors more viable than they seem. One of his favorite themes is "stealth technology," as shown by companies that use innovation to create value. These are not "traditional" tech companies, but often they are underestimated because the street doesn't understand how they are using technology to get ahead. Colgate Palmolive (CL) has proprietary whiteners, innovative cleansers and healthy pet foods. This is the reason why customers prefer its brands. Under Armour (UA) creates sports clothes that keep away moisture, regulate body temperature and dry faster. There is no reason to wonder why the Notre Dame football team is switching to UA's products. RPM (RPM) makes revolutionary plastic that is stronger. Dominos Pizza (DPZ) has gained 600% since Cramer got behind it four years ago. It has changed the way people order pizza, and now it is possible to place an order via Facebook.
Cramer took some calls:
Darden (DRI) is not doing well, and management is talking about spinning off Red Lobster, which Cramer thinks would be a bad idea. The dividend may be a reason to put up with it until it goes to $55, and on that uptick, Cramer would ring the register.
BlackBerry (BBRY): Cramer doesn't want to short it. The new management might be right. "I'm impressed and the chatter has gone positive. I believe there are good things happening at BlackBerry."
What The Employment Number Says About the Market
The jobs number on Friday was terrible, and "out of synch with everything we have been hearing" from companies about good fundamentals. Interest rates pulled back from 3% to 2.86% on the news. Cramer thinks the jobs number is the most important data point for the market, and he sees a rotation out of cyclicals and back into growth stocks. A trend in employment can only be established by two back-to-back jobs numbers indicating the same thing; until then, declaring a trend may be a kneejerk reaction.
Mad Tweets: United Therapeutics (UTHR), Anika Therapeutics (ANIK), Ryman Hospitality (RHP), Starwood Hotels (HOT), Wyndham Worldwide (WYN), Hilton (HLT), CommVault Systems (CVLT), Whole Foods (WFM), Google (GOOG)
United Therapeutics (UTHR) is a profitable biotech company with a treatment for hypertension. The stock spiked on FDA approval, but it has a lot of naysayers. Cramer would take some off the table and buy it back if it dips.
Anika Therapeutics (ANIK) has had a monster run and is a very small speculative biotech. It has a multiple of just 24 compared to its 30% growth rate. It is not for the faint of heart, but could be a decent spec with limit orders.
Ryman Hospitality (RHP) is a niche REIT with 4 hotels. RHP got crushed last year on higher interest rate fears, but has been bouncing back and may see more bookings. The stock has a nice 4.7% yield, but since it only has four hotels, Cramer prefers Starwood Hotels (HOT), Wyndham Worldwide (WYN) and Hilton (HLT),
CommVault Systems (CVLT) has had a slew of negative data points but has a high multiple. Cramer would stay away.
Whole Foods (WFM) has rebounded every time it has been hit. Cramer would buy it and is not worried about competition.
Google (GOOG) is the largest position in Cramer's charitable trust, and is a buy.
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