Stocks discussed on the in-depth session of Jim Cramer's Mad Money, Friday March 19.
BP (NYSE:BP), Verizon (NYSE:VZ), Kinder Morgan Partners (NYSE:KMP), Eli Lilly (NYSE:LLY), DuPont (NYSE:DD), Altria (NYSE:MO), Williams-Sonoma (NYSE:WSM), Tiffany (NYSE:TIF), KB Home (NYSE:KBH), General Mills (NYSE:GIS), Treehouse Foods (NYSE:THS), Ralcorp (RAH), Best Buy (NYSE:BBY), Hewlett-Packard (NYSE:HPQ), Apple (NASDAQ:AAPL), Oracle (NYSE:ORCL)
Cramer cautioned viewers that on Monday, they could wake up to "a totally different stock market universe...I wish we didn't have to focus on Washington on Mad Money...but right now, Washington matters more to the market than anything else out there."
If Obama's healthcare proposals pass, the President will be empowered to pursue the rest of his "less-than-Wall-Street-friendly-game-plan." Healthcare will have negative ramifications for employment, and to pay for the expensive proposals, Obama will raise taxes, a move that will hurt investors and businesses.
Cramer's game plan involves buying high-dividend stocks such as BP (BP), Verizon (VZ), Kinder Morgan Partners (KMP), Eli Lilly (LLY), DuPont (DD) and Altria (MO). He would also look at upcoming earnings reports.
"On Monday, we get a total litmus test of how the rich are doing" from Williams-Sonoma (WSM) and Tiffany (TIF). Tuesday, Carnival's (NYSE:CCL) earnings will give an indication of how the middle class and travel are faring. Numbers for home sales are coming out on Tuesday, and Cramer is concerned that excessive supply is keeping down pricing. While KB Home (KBH) is also reporting on Tuesday, he thinks the general home sales number is a better gauge on housing in general than KB Homes' report.
Darden's (NYSE:DRI) report on Tuesday is also significant, because "nothing tells you more about the strength in the economy than knowing if Red Lobster and Olive Garden have picked up. They appeal to everyone." Cramer wants to hear from Darden about how the Capital Grille and Longhorn Steak acquisitions are doing.
General Mills (GIS), "one of the most consistent companies out there" reports Wednesday. If GIS says customers are going back to brand names, then Cramer recommends taking profits in private-label plays Treehouse Foods (THS) and Ralcorp (RAH). Numbers for durable goods will also go public on Wednesday and Cramer says these need to be strong, but too high a number might mean a rise in interest rates.
While Best Buy (BBY) has been stuck at $40, Cramer is hoping Goldman Sachs' prediction of strong numbers will be correct. Highlights of the call will include what is selling in stores, Apple (AAPL) products, 3-D TVs, netbooks, Hewlett Packard (HPQ) products and video games.
Oracle (ORCL) reports after the close on Thursday, and Cramer wants to see what the company says about cloud computing and its Sun Microsystems acquisition. Cramer thinks Oracle has a dynamite chart and says he might cancel all of his above recommendations, except for Oracle, if there is a huge selloff on Monday morning.
Sonus Networks (NASDAQ:SONS)
When it comes to the mobile internet tsunami, one detail has been overlooked which might seem old-fashioned in a world of constant, feverish texting: voice. A true speculative stock at a mere $2.57, Sonus is a pure play on voice IP infrastructure. Its main product is GSX 9000, which is a bridge between legacy circuit-based networks and modern internet-based networks. GSX 90000 eliminates delays and enhances voice quality. Its customers include Verizon (VZ), L-3 (NYSE:LLL) Communciations, Qwest (NYSE:Q) and AT&T (NYSE:T); none of which comprises more than 10% of its revenues.
The stock is so low because its several restructurings have not been well received. Sonus beat estimates by 4 cents per share, but gave disappointing guidance for 2010. However, in addition to its cutting-edge technology, Sonus has a lot of cash on the books, and although it is close to its 52-week high, its historical high was close to $8 in 2007. Cramer would speculate with Sonus.
Sandridge Energy (NYSE:SD)
With major oil and coal companies expanding their natural gas holdings, Cramer is looking for the next takeover target. He advised viewers to think about companies in terms of how much they can be worth if taken over, not on their current stock prices. While natural gas prices are low, Cramer likes the fact Sandridge Energy (SD) has 48% natural gas and 52% oil as a hedge. The company has 1.3 trillion cubic feet of reserves in West Texas, Permian Basin and Oklahoma, so why is the stock trading at just $7.44. Sandridge natural gas reserves aren't hedged after 2010 and it has $2.59 billion in debt. However Sandridge is "priced for disaster" but is likely to be "headed for success" given its huge reserves. Even with its problems, the average target price for Sandridge is $12.50, 70% higher than where it is now.
When a viewer asked Cramer about IRM, he replied; "Iron Mountain's (IRM) difficult because this is a storage play, including digital storage. I think it requires more business formation than we're going to be able to get in this country, and so therefore I think the stock is just a flatliner."
To another viewer who said he had doubled his money in Boeing (BA), Cramer said to hold onto the stock because it is planning to double its production in 2011 and is on a multi-year high. He would increase the position on any decline.
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