Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday March 22.
There's nothing like a bull market that goes completely unnoticed by analysts, and Cramer says the bull market in shoes is a "real longhorn."
While Deckers (DECK) and Skechers (SKX) have been strong performers, Cramer likes best-of-breed Nike (NKE), which is "the global king of footwear, with the most market share and huge opportunities in emerging markets." Only 43% of its sales are domestic. Nike beat estimates and its sales were up 6.6%, but Cramer says the emphasis is on future orders which are strong. He noted an earlier pattern in which earnings acceleration followed several quarters of flat growth and continued for multiple quarters. Cramer thinks Nike is in a similar cycle now.
March Madness, the NBA Playoffs, Wimbledon, the Boston Marathon and the World Cup will boost Nike's sales in the coming months. The "most astonishing number" in the company's conference call, according to Cramer, was that inventory was down 13%. "The world does not have enough Nike," declared Cramer, "Now that's a quality problem."
The Healthcare Scare That Wasn't: Apple (AAPL), Broadcom (BRCM), Marvell (MRVL), Qualcomm (QCOM), TriQuint Semiconductor (TQNT), RF MicroDevices (RFMD), Cypress Semiconductor (CY), Skyworks Solutions (SWKS), Boeing (BA), Honeywell (HON), Cisco Systems (CSCO), JDS Uniphase (JDSU), Juniper (JNPR), Ciena (CIEN), Ford (F), Johnson Controls (JCI), Lear (LEA), Abbott Labs (ABT), Williams-Sonoma (WSM), TJX (TJX), Costco (COST), Best Buy (BBY)
The passage of big bad healthcare reform turned out to be no more scary to stocks than a Fed meeting, said Cramer; "We were soggy with a downward bias for no more than 20 minutes this morning" before the market moved up again. The real headaches come not in 2010, but in 2011, when taxes are going to go up, but until then, Cramer would buy freely among various bull markets.
It's time to buy Apple (AAPL) again and its component makers ahead of the iPad release. Cramer also likes other mobile internet tsunami plays: Broadcom (BRCM), Marvell (MRVL), Qualcomm (QCOM), TriQuint Semiconductor (TQNT), RF Microdevices (RFMD), Cypress Semiconductor (CY), Skyworks Solutions (SWKS).
"When Boeing (BA) announced that it was boosting production last week, that was a clarion call that a new bull market in aerospace is powerful, and multi-year, and will not be constrained by the lousy balance sheets of airlines," said Cramer, who praised an upgrade of Boeing and thinks Honeywell (HON) is also a buy.
In the race for faster internet, Cramer would buy Cisco Systems (CSCO), JDS Uniphase (JDSU), Juniper (JNPR) and Ciena (CIEN). Autos have been revving up, and with Ford's (F) orders increasing, Cramer thinks the stock is headed to $17. Cramer also likes Johnson Controls (JCI) and Lear (LEA).
With the passage of healthcare reform, Democrats "preserved their love of pricey biotech drugs." Generics will also gain from the new proposals. Cramer recommended Abbott Labs (ABT) which has been "savaged" lately. Retailers won't get hurt until higher taxes next year, so in the meantime, he would buy Williams Sonoma (WSM) as well as discount retailers Costco (COST) and TJX (TJX). He would pay special attention to Best Buy's (BBY) conference call this week.
After a long, dry spell, there is a renaissance in IPOs. How to choose the best IPO? Cramer is looking for IPOs that are not just vehicles to fund private equity firms but are profitable and offer original products. MaxLinear (which will trade under the symbol MXL) designs chips and outsources manufacturing to another company. These chips are high performance, low cost, radio frequency receiver chips which capture and process broadband signals. The technology allows broadband videos to be viewed on digital TVs and telelphones alike.
Cramer likes the fact that of the $65 million the IPO is expected to raise, $15 million is going to shareholders while $50 million is being used to fund the company. The company has "good bloodlines" with Morgan Stanley and Deutsche Bank as the leading underwriters. MaxLinear has a proprietary edge with 9 issued patents and 82 patents pending. Its chips are cheaper and use less power than receivers currently on the market. Demand is "red hot" and there is room to grow, especially in Asia where many of MaxLinear's biggest clients, such as Panasonic (PC) and Sony (SNE) are located. The company has a great track record with 65% revenue growth in 2009, and the operating margin is expected to increase from 7% in 2009 to 20% this year.
MaxLinear has $61 million cash on the books and no debt. Cramer thinks MaxLinear can be bought up to $18.50 from its IPO price which is expected to be in the $11 to $13 range. He would buy the IPO and not chase the stock in the open market or after hours.
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