Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday February 5.
Apple (NASDAQ:AAPL) Isn't Scary. Other Stocks Mentioned: Sprint (NYSE:S), Rockwell Automation (NYSE:ROK), T-Mobile (NYSE:TMUS)
People are scared of Apple (AAPL), but Cramer's suggestion: "Just take Apple for what it is." It is no longer a super momentum stock with a glittering array of new products, but is a slower growing stock with a decent product line, significant cash flow, a clean balance sheet and a dividend. Momentum and cult stocks may be worth worrying about, but "the worst enemy of Apple shareholders are other Apple shareholders." Once investors stop looking for huge moves and dramatic product releases and realize that Apple has settled down into being just a basically good company, then there is no room for fear.
Cramer took some calls:
Rockwell Automation (ROK) has been a "stalwart, and it isn't done." This great American machinery company is "fantastic at what it does."
Buffalo Wild Wings (NASDAQ:BWLD), Polo Ralph Lauren (NYSE:RL), Estee Lauder (NYSE:EL), Wynn Resorts (NASDAQ:WYNN), 3D (NYSE:DDD), Twitter (NYSE:TWTR), Alliant Techsystems (NYSE:ATK), Radian (NYSE:RDN), Genworth (NYSE:GNW), Southwest Airlines (NYSE:LUV), American Airlines (NASDAQ:AAL)
Stocks have been volatile lately, with the Dow closing down 5 points on Wednesday. Cramer thinks traders who see a fall ahead are making the market volatile and are turning around stocks quickly. Many are making the mistake of buying stocks based on initial news from earnings without paying attention to the guidance portion on the conference call. Hot stocks, like Buffalo Wild Wings (BWLD) are particularly punished because of nuances expressed in earnings calls. BWLD beat earnings estimates and reported strong same store sales, but management's comments about a weak beginning to the quarter led a Goldman Sachs analyst to downgrade the stock, citing "limited visibility" for earnings. Polo Ralph Lauren (RL) reported better than expected earnings, but during the call, management indicated gross margins would drop off slightly, and the stock got dinged.
Estee Lauder (EL) reported strong earnings, but management added the pace of growth can't be maintained, especially in the U.S. and Asia. While Wynn (WYNN) last week reported an upside in Macau, the January Macau numbers have been soft. Cramer thinks this is just an aberration, and would stick with Wynn. 3-D's (DDD) management said that marketing needs to be stepped up, and this caused the street to question the popularity of its products. Twitter (TWTR) beat earnings estimates, but its average monthly user rate was down slightly and the stock got hit. Cramer would wait for the employment number on Friday before buying, and would look to defensive stocks.
Cramer took some calls:
Alliant Techsystems (ATK) was one of the most successful Mad Money calls of 2013. Cramer would take profits, but thinks it may be a buy lower.
Radian (RDN) and Genworth (GNW) were also favorite Mad Money picks for 2013. Genworth reported a strong quarter. Cramer would take some off the top of both names, because they have risen substantially.
CEO Interview: Irwin Simon, Hain Celestial (NASDAQ:HAIN)
Hain Celestial (HAIN), a major producer of organic and natural brands, reported a quarter regarded by the street as "uneven," and the stock fell 6.1%. Revenues were in-line, with weaker than expected growth in the U.S. However, management gave robust guidance, and this may be a sign of strength going forward. CEO Irwin Simon said that many of the issues depended on timing and shipping rather than actual demand, which is still strong. Hain is sometimes criticized for its alleged reliance on acquisitions rather than organic growth. Simon pointed out that Hain doesn't only acquire brands, but it grows them; the Earth's Best brand was bought for $14 million and now it is worth $200 million. Simon predicts increased demand for Hain's products, especially given the controversy over GMOs; Hain's brands are 99% GMO free.
CEO Interview: Gary Heminger, Marathon Petroleum (NYSE:MPC). Other stock mentioned: Marathon Oil (NYSE:MRO)
Marathon Petroleum (MPC) was spun off by Marathon Oil (MRO), and it has benefited from the higher price of Brent. With new pipelines, that price spread has narrowed, but MPC has the advantage of having a well-balanced collection of assets in the Gulf Coast and the Midwest. MPC recently beat earnings by 95 cents, the largest earnings beat from a company Cramer said he has seen so far this year. Margins improved from $9 to $15 a barrel. CEO Gary Heminger says he supports the Keystone Pipeline, which should be good for Canadian oil and for U.S. Refining. He forecasts 15-20% growth for the year and noted that the stock has risen 129% and the dividend has increased 110% since MPC was spun off from Marathon Oil. Cramer is bullish on MPC.
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