Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday April 1.
Bursting the Bears' Bubble: Tyson Foods (NYSE:TSN), 3D Systems (NYSE:DDD), Tesla (NASDAQ:TSLA), Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN). Other stock mentioned: Seadrill (NYSE:SDRL), Ensco (NYSE:ESV)
The bears seem so certain that there is a bubble, but it is possible the individual bubbles in the market have already popped. It is "fanciful" to say we still have a bubble when the winners lately have been not-so-hyped stocks like Tyson (TSN), while biotechs thought to be "bubbly" are now trading at lower multiples than pharma stocks.
True, there was a bubble in 3D stocks, but 3D Systems (DDD), the sector leader, dropped $97 to $58 in the past quarter. Hot biotech stocks got popped after popping, and cloud stocks have taken it on the chin after a string of IPOs. Tesla (TSLA), Amazon (AMZN) and Netflix (NFLX) have all fallen dramatically. Cramer thinks the false allegations of bubbles often come from bears on the sidelines, bitter that they have missed the move.
Cramer took a call:
An About Face In The Wall Street Fashion Show: Facebook (NASDAQ:FB), Salesforce.com (NYSE:CRM), Eli Lilly (NYSE:LLY), Gilead (NASDAQ:GILD), Celgene (NASDAQ:CELG), Merck (NYSE:MRK), Caterpillar (NYSE:CAT), Alcoa (NYSE:AA). Other stocks discussed: Rocket Fuel (NASDAQ:FUEL), Office Depot (NASDAQ:ODP)
Everything that was bad in the last quarter is suddenly good and vice versa. The Dow rose 75 points on Tuesday, but the leaders were not the ones who were at the head of the pack last month. With money managers following the style dictates of the "Wall Street fashion show," Gilead (GILD) and Celgene (CELG) traded up, while they had formerly been losers, and big pharma names that were darlings not long ago, like Merck (MRK) and Eli Lilly (LLY), sold off. Celgene is still cheap with a multiple of 10, and may be worth buying. Similarly, "value tech" names that were trouncing Facebook (FB) and Salesforce.com (CRM) seem to be switching directions. Cramer sees FB coming back, even after its latest merger that may prove to be a flop. Caterpillar (CAT) and Alcoa (AA), two stocks that benefited from the rise of industrials, may change direction.
Cramer took some calls:
Rocket Fuel (FUEL): "It is mind-numbing how difficult this stock is," said Cramer. "It is too hard to game the quarter. Let it bounce, but then let it go."
Off the Charts: Where Are The S&P 500 and the Nasdaq 100 Headed? Stock discussed: Charles Schwab (NYSE:SCHW)
Cramer consulted the technical analysis of Carolyn Boroden of fibonacciqueen.com. She thinks that the S&P 500 might be due for a correction if it fails to breach certain resistance levels. The bull market seems due for a respite, given that the bull market between 2002 until 2007 lasted 60 months, and the current bull market starting from 2009 has been going on for 61 months. The S&P 500 has risen 60 points above Boroden's target level of 1823. It could either rise to 2138 or correct. The S&P 500 has not been able to break out of resistance between 1881 and 1920. If it falls below this range, the pullback could be down to 1751. However, if it breaks out of this range, it could go much higher.
The Nasdaq 100 is a "tell" for tech, and peaked last month. The Nasdaq has already pulled back dramatically, and it might rebound. Boroden's thinks the average could go to 3791.
Cramer took some calls:
Charles Schwab (SCHW) is the right stock if short-term rates go up. Cramer thinks it is well-run.
CEO Interview: Al Monaco, Enbridge (NYSE:ENB)
Enbridge (ENB) has the largest pipeline through the U.S. and Canada, and along with pipelines, has a natural gas gathering and alternative energy business. The company has $18 billion worth of projects scheduled, yields 2.8% and has returned 13% since Cramer last spoke to CEO Al Monaco 6 months ago. To fund the projects, ENB has strong credit ratings and healthy liquidity. Raising money is a necessary part of operations, and Monaco says that most of the funds will be debt-financed. Monaco thinks that the dividend can grow in step with earnings per share increases. While the U.S. has been a major market for ENB, Monaco discussed the possibility of exports. Cramer thinks ENB has the best growth of any of the pipeline companies.
CEO Interview: Stanley Bergman, Henry Schein (NASDAQ:HSIC)
Henry Schein (HSIC) provides healthcare products and services for dentists, doctors and veterinarians. The company has tended to grow by acquisitions, and has done 6 deals recently. The stock has delivered a 55% gain in 18 months. CEO Stanley Bergman pointed out that one of the fastest growing segments is veterinary medicine, particularly veterinary dentistry, an industry in which HSIC has been a major player for over 2 decades. As baby boomers age, they are more likely to have pets as companions, and as the middle class grows in many parts of the world, there is a growing tendency to spend more money on pet care. HSIC is transforming its medical technology in all of its areas with the use of digital, and soon dentists will be able to take a quick, accurate scan of a patient's mouth without using the current uncomfortable and time-consuming procedures. Cramer likes HSIC for its long-term, consistent growth.
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