Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday March 27.
CEO Interview: Burton Goldfield, TriNet (NYSE:TNET)
While the IPO window seems to be closing, it has not shut yet. TriNet (TNET) rose 19.4% on its IPO this week and, according to Cramer, is "a real company with real profits and a legitimate valuation." The company provides human resources services to businesses with a "bundled" solution. CEO Burton Goldfield explained that TNET is a one-stop shop for human resource services, "We offer a technology-enabled business service with a software backbone." TNET is pursuing "growth with predictable profitability." When asked about the company's 20% attrition rate, Goldfield explained that many of these clients may be those who have gone out of business or have been taken over. For instance, one TNET client was WhatsApp, which was recently bought by Facebook. With the complexity of the Affordable Care Act, and the services TNET provides to deal with new regulations, Cramer concludes that "this is the right time for TNET."
The Unknown Unknowns: Caterpillar (NYSE:CAT), Alcoa (NYSE:AA), Citigroup (NYSE:C), Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG), Yelp (NYSE:YELP), Yahoo (NASDAQ:YHOO), General Electric (NYSE:GE), Lululemon (NASDAQ:LULU), Twitter (NYSE:TWTR). Other stocks mentioned: Baxter (NYSE:BAX), BlackBerry (NASDAQ:BBRY), Cabot Oil & Gas (NYSE:COG)
Cramer borrowed a term from former Defense Secretary Donald Rumsfeld to sum up Thursday's trading, "This is the market of unknown unknowns." The Dow dropped 5 points on action that was downright contradictory. Cramer thinks this is a sign that something may be about to happen, but no one is sure what it will be. Interest rates were down, which implies a negative economy, but minerals and miners rose. Caterpillar (CAT) and Alcoa (AA) are rallying on no news. Most banks, aside from Citigroup (C), were given the green light to return capital to shareholders, but financials declined. Analysts are silent about tech stocks that have declined. Facebook's (FB) story is now murky because of questions over recent acquisitions. Google (GOOG) has a price war with Amazon (AMZN), but the analysts are silent. Twitter (TWTR) is going up and Yelp (YELP) rose on a partnership with Yahoo (YHOO). General Electric (GE) has a huge business in Russia, but for some reason, went higher. Lululemon (LULU) reported a lackluster quarter but also rose. Gold usually senses doom ahead of time by rallying, but declined. The unknown issue might be a negative or a positive. Cramer is concerned that stocks will be sold off on any uptick because investors are too anxious.
Cramer took some calls:
Baxter (BAX) is breaking up and is a stock worth buying. The split-up is going to be worth $90.
Cabot Oil & Gas (COG) was the best performer in the group, but seems to be taking a rest. It could be dead money.
BlackBerry (BBRY) has a better balance sheet than it had before. It might be acquired, but probably not at a premium. Cramer would not recommend buying it.
CEO Interview: Martin Mucci, Paychex (NASDAQ:PAYX)
New jobless claims are at their lowest level in 4 months. Paychex (PAYX) should benefit from this trend with its outsourcing and payroll processing services. The benefit of PAYX business model lies in the fact that it collects interest on funds deposited by clients. If interest rates are headed higher in the near future, this will be a boon for PAYX. The company beat earnings estimate by 2 cents with stronger revenues that rose 7.3% yoy. While there is increasing competition from smaller, newer companies, CEO Marty Mucci feels his company will remain in the lead, given its 40 years of experience. While business growth has not reached its pre-recession levels, the rise on consumer confidence and housing starts should encourage new businesses to hire. Cramer thinks PAYX is a cheap stock and is going higher.
Ahead of King Digital's (KING) disastrous IPO, Cramer did say KING was a better company than Zynga (ZNGA), and this is still true. What went wrong with the IPO had nothing to do with management or fundamentals, but with the bankers who priced the IPO. Cramer thinks it should have been priced at the lower end. Given anxieties over froth in IPOs, the market could not stomach a $7 billion deal. Given the faulty pricing, "The King Digital IPO was an accident waiting to happen."
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