Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday April 10.
Best Stock Between $10 and $50: GT Advanced Technologies (GTAT). Other stock mentioned: Apple (NASDAQ:AAPL), UPS (NYSE:UPS), Siemens (SI)
GT Advanced Technologies (GTAT) has risen 85% since the beginning of the year and 340% yoy. The stock fell 6.7% on Thursday, and Cramer thinks it is a speculative play that might be worth buying in increments on the way down. The company makes sapphire screens for gadgets, and signed a deal with Apple (AAPL). If GTAT finds a way to produce sapphire cheaply enough, it may replace the glass in Apple's gadgets. The stock doubled in the 5 months since the partnership with Apple was announced. Sapphire is scratch and break-resistant, and buyers of gadgets might be willing to pay up for durability. GTAT might become profitable in 2014, but in the near term, the sector is volatile, and the stock could drop on little or no news. GTAT is Cramer's top pick under $50, but since it is speculative, he would approach it with caution.
Cramer took some calls:
UPS (UPS): "I can't countenance selling UPS," said Cramer. It has a good yield, solid prospect, healthy business.
Siemens (SI) is a good company and yields 3%.
A Mystifying Day: Rite Aid (NYSE:RAD), Bed, Bath and Beyond (NASDAQ:BBBY), Chipotle Mexican Grill (NYSE:CMG), McDonald's (NYSE:MCD). Other stocks mentioned: Hertz (NYSE:HTZ), Apache (NYSE:APA), ConocoPhillips (NYSE:COP), Chevron (NYSE:CVX), Amazon (NASDAQ:AMZN), Gilead (NASDAQ:GILD), Merck (NYSE:MRK)
On a day when the Dow fell 367 points and the Nasdaq saw a 3.1% decline, its worst performance since 2001, Cramer declared, "This is the most mystifying day we've seen in ages." The 2 biggest macro news items were positive: a dramatic decline in jobless claims and the smallest March Federal Budget Deficit for many years. Bond prices went higher, but interest rates fell; the combination of all of these elements was baffling. Rite-Aid (RAD) reported its strongest quarter in recent memory, while Bed, Bath & Beyond's (BBBY) earnings were tepid. Much of the news that took down stocks had little direct connection with stocks themselves. China's imports and exports are both in decline, a trend that could signal deflation. With the Greek government's issue of $4 billion worth of 5 year bonds that yield 4.75%, many decided there was more return and less risk in U.S. bonds. The day showed a hunger for yield, as dividend stocks did well. Chipotle Mexican Grill (CMG), a much stronger performer than McDonald's (MCD), fell while MCD rose, mainly because MCD has a consistent yield. Thursday was a good day for the U.S. economy, but a bad day for U.S. stocks.
Cramer took some calls:
Hertz Global (HTZ) is a pretty good stock, and the company is doing a restructuring. The selloff seems to be profit taking; "that whole group was under a lot of pressure today," Cramer said.
Amazon (AMZN): it is a tough stock to own here. It is a hated cult stock, and it is difficult to game how high or low it can go. For those who want to buy it, Cramer recommends using deep in the money calls.
Gilead (GILD): There is news that Merck (MRK) might have a better pill for Hepatitis C than Gilead's current treatment. Gilead's pill is probably better, but few expected this news from MRK. Cramer still believes in GILD, but this is a tough environment for biotechs.
Risk Behind Every Rock: JPMorgan (NYSE:JPM)
Since the Great Recession, many want to see "risk behind every rock." JPMorgan (JPM) CEO Jamie Dimon's annual letter referred to the low confidence and risk aversion of those who would rather cry wolf than seek out opportunities. While Dimon's letter expressed optimism for the long term, stocks won't go higher until some of the pessimism is shaken out.
CEO Interview: Charif Souki, Cheniere Energy (NYSEMKT:LNG)
Cheniere Energy (LNG) has seen a 25% gain in 3 months, and at its recent Analyst Day, management discussed progress in its plans to export liquefied natural gas. LNG has been converting import terminals to export use, and by 2020, CEO Charif Souki predicts the company should be running 4 to 5 terminals. He added there has been confusion concerning rumors of competition. Other companies are applying for licenses, but it takes additional approval for permission to export liquefied natural gas. LNG is still ahead in the race; "Once you've got your first permit, they can't slow you down." Cramer suggests doing homework in LNG before buying.
Dr. Robert Whaley: Volatility ETFs for Long-Term Investing is "Just Plain Wrong."
Cramer spoke to Dr. Robert Whaley, creator of the VIX Volatility Index concerning the problems with ETFs that attempt to mirror the VIX. Dr. Whaley criticized these ETFs, which often provide a negative return over time, since they tend to decline every 30 days. Using current volatility ETFs for long-term trading is "just plain wrong," and packaging volatility as an asset class has been misguided. Dr. Whaley is involved in a project with AccuShares to develop a volatility ETF that will include mean reversion and is geared towards the needs of long-term investors.
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