Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday February 27.
10 Biggest Gains on Thursday: Mylan (NASDAQ:MYL), First Solar (NASDAQ:FSLR), Cliffs Natural Resources (NYSE:CLF), Best Buy (NYSE:BBY), Kohl's (NYSE:KSS), Sempra Energy (NYSE:SRE), eBay (NASDAQ:EBAY), Verizon (NYSE:VZ), Salesforce.com (NYSE:CRM), Whirlpool (NYSE:WHR). Other stocks mentioned: Anika Therapeutics (NASDAQ:ANIK), Linn Energy (NASDAQ:LINE), SolarCity (NASDAQ:SCTY)
Following the new Fed Chief Janet Yellen's report that she intends to stay the course with Bernanke's policies, many stocks rallied mid-day on Thursday. Cramer took a look at the biggest noon-time gains:
1. Mylan (MYL) rose more than 9%. The company recently reported strong earnings, and it might be a takeover target.
2. First Solar (FSLR) is in the sweet spot of renewable energy, but got dinged after its earnings. Cramer would buy it ahead of its upcoming analyst meeting.
3. Cliffs Natural Resources (CLF) represents the trend of iron ore coming back into favor now that the Baltic Dry Freight Index has bottomed.
4. Best Buy (BBY) has dropped too far this year, especially now that spending on homes is coming back.
5. Kohl's (KSS) has a better story than many other retailers, and caught an upgrade.
6. Sempra Energy (SRE) is a good conservative company with a stable yield.
7. eBay (EBAY) is a winner, especially with activist investor Carl Icahn encouraging management to spin off PayPal.
8. Verizon (VZ) should see some upside following its acquisition of the remainder of Verizon Wireless. It has a strong 4.5% yield.
9. Salesforce.com (CRM) is one of Cramer's favorite stocks, and is king of the cloud.
10. Whirlpool (WHR) should cash in on the increase of spending on homes.
Cramer took some calls:
Anika (ANIK) received FDA approval, but has spiked. Cramer would wait out 4 or 5 days of a decline before buying.
Linn Energy (LINE): Cramer is glad his charitable trust sold some, and he admits he was "mystified" by the quarter, although some of the problems seem like one-time issues. "I'm patient, but unhappy" with LINE.
SolarCity (SCTY) pre-announced good earnings, but is a very speculative stock. It could go far and fast in either direction. It is not a good short, but those who buy it should understand the risks involved.
CEO Interview: Marc Benioff, Salesforce.com (CRM)
Salesforce.com (CRM) is a software as a service company and a best-of-breed cloud company. CRM has returned 18% since November and has rallied 1,078% since Cramer got behind it in 2008. CRM reported a one cent earnings beat, and revenues grew 37% yoy, deferred revenues rose 35%. CEO Marc Benioff commented that mobile is the emphasis, and increasing numbers of managers do much of their business on their phones. Benioff has dramatically raised guidance, and says CRM will be the first cloud company to report $5.3 billion in revenues for the year.
Which Retailer's Rally Is Sustainable? Best Buy (BBY), J.C. Penney (NYSE:JCP), Sears Holdings (NASDAQ:SHLD)
Best Buy (BBY), J.C. Penney (JCP) and Sears Holdings (SHLD) all rallied on Thursday, but Cramer thinks only BBY has real staying power. BBY was recovering from a bear raid that it faced while in the process of a turnaround that involved closing underperforming stores, improving customer service and selection at competitive prices. Cramer thinks BBY's rally has legs. JCP is trying to shed the legacy of former CEO Ron Johnson's unsuccessful tenure, but even if it recovers, pre-Johnson, JCP was only second rate then and is unlikely to be a winner in the future. Cramer feels similarly about SHLD, which has been lackluster since its acquisition of K-Mart. The buy among these three is BBY.
CEO Interview: Frits Van Paasschen, Starwood Hotel & Resorts (NYSE:HOT)
Starwood Hotel & Resorts (HOT) manages 1,000 hotels around the globe, many of which are franchises. The company has been performing well in emerging markets, including China. The stock dropped after its earnings, even though it beat estimates, saw an increase in revenue per room and raised the dividend. The street did not think HOT's guidance was aggressive enough, but Cramer believes management plans to underpromise and overdeliver. HOT has gained 35% since Cramer spoke with the CEO Frits Van Paasschen a year ago. The CEO discussed HOT's special dividend, which should bring its yield up to close to 5% for the year; Cramer commented that HOT is the fastest growth stock he knows with a 5% yield. Van Paasschen discussed the ways in which its franchise business model spins off cash and, at the same time, allows for impressive growth. U.S. demand is strong, and HOT is still performing well overseas.
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