Cramer's Mad Money - 4 Investment Ideas From Seattle (3/19/14)

Includes: GOOG, JWN, SBUX, SGEN, Z
by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday March 19.

Good News Is Bad News, But Not For Long

As a continuation of his "Invest in America" series, Wednesday's Mad Money program was filmed on location in Seattle. During Wednesday's trading, the Dow swooned 114 points following the Fed meeting during which new Fed chair Janet Yellen indicated that interest rates may have to be raised as the economy improves. Cramer said the street acts as if this isn't obvious and as if an improving economy is bad news. While there may be short-term pain as interest rates go up, a more robust economy is, of course, better for sales and profits and top line growth. Cramer would keep an eye on banks in the current environment as well as stocks that perform well regardless of the macro environment.

CEO Interview: Howard Schultz, Starbucks (NASDAQ:SBUX)

Cramer interviewed Starbucks (SBUX) CEO Howard Schultz from the company's Annual Meeting in Seattle. SBUX has been one of the most successful companies in recent history. Its stock has seen a 14,200% gain since going public in 1992. CEO Howard Schultz discussed the $90 billion opportunity in tea, and SBUX's upcoming Oprah Chai, which will be released on Mother's Day; a percentage of proceeds from Oprah Chai will fund youth causes. Schultz discussed plans for rapid store growth for Teavana, both domestically and in China; he predicts that China is likely to become Starbucks' second largest market. SBUX is increasingly involved in the mobile payment business, and Schultz believes the category may soon be "applicable outside of Starbucks." Gift cards have been a winning strategy for SBUX, and many recipients reload their gift cards. Howard Schultz says SBUX's footprint will be even larger than it has been in the past.

Interview with the President of Nordstrom (NYSE:JWN), Blake Nordstrom

Nordstrom (JWN) is in its fourth generation as a family business and it retains its emphasis on the "personal touch" it provides customers, but is adapting new ways to bring that personal touch to ecommerce, JWN's offprice stores and Rack locations. The street has criticized management for its increase in capital spending, and President Blake Nordstrom pointed out that JWN wants to "lay the groundwork" through investing in technology for an improved customer experience; "It is a very dynamic and fluid time right now." Blake Nordstrom said that brick and mortar stores and malls are "not going away," but JWN's aim is to stay "relevant and current" to customers who now have multiple options. Cramer thinks JWN is an inexpensive stock.

CEO Interview: Spencer Rascoff, Zillow (NASDAQ:Z). Other stocks mentioned: Google (NASDAQ:GOOG), Trulia (TRLA)

Zillow (Z) is a successful but controversial online real estate site that has a heavy short covering. With housing heating up, Zillow gained $12 in just a week, while traffic is up 60% and mobile usage increased 69%. Cramer asked CEO Spencer Rascoff if he is worried about the impending rise of interest rates and home prices. Rascoff replied that while interest rates seem to be headed up, they are far below their historic average. Housing prices are rising aggressively, but are likely to stabilize. While there is news that Zillow's competitor Trulia (TRLA) is increasing its ad spending, Rascoff noted that advertisers prefer to purchase ads on the largest site, and Zillow is twice as large as its nearest competitor. When asked if Google (GOOG) is a threat, Rascoff replied that while Google is great at driving hits to a website, many agents don't have great websites and prefer to rely on Zillow as well as mobile. Rascoff said that there is no conflict of interest between reviews and ads, and no negative reviews about advertisers are removed; "We believe strongly in the integrity of the review system." The newest acquisition of StreetEasy will give Zillow exposure to the New York real estate market. Zillow is releasing a new program that will pre-approve visitors for a mortgage online.

CEO Interview: Dr. Clay Siegall, Seattle Genetics (NASDAQ:SGEN)

Seattle Genetics (SGEN) is a biotech that produces antibody-based treatments that search and destroy cancer cells while leaving healthy cells alone. The stock has risen 110% since Cramer got behind it in 2012, and it has several drugs in late-stage clinical trials. CEO Dr. Clay Siegall discussed SGEN's treatments in clinical trials for leukemia, lymphoma and breast cancer. These drugs are developed for those patients who have not responded to conventional treatment or have had a recurrence of the disease. Cramer said that while many biotechs currently are frothy, SGEN is investable.

Editor's Note: There was no Lightning Round segment on Wednesday's program.


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