Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday April 25.
10 Things To Watch In The Week Ahead: Corning (NYSE:GLW), Herbalife (NYSE:HLF), 3D Systems (NYSE:DDD), Twitter (NYSE:TWTR), Time Warner (NYSE:TWX), Actavis (NYSE:ACT), MasterCard (NYSE:MA), T-Mobile (NYSE:TMUS). Other stocks mentioned: Amazon (NASDAQ:AMZN), Verizon (NYSE:VZ), AT&T (NYSE:T), Melco Crown Entertainment (NASDAQ:MPEL), Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN), Chiquita (NYSE:CQB), Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB)
On a day the Dow fell 140 points, many people blame Amazon's (AMZN) poor quarter. Cramer thinks seeing AMZN as the main reason for Friday's decline is "simplistic." Global tensions in the Ukraine may have contributed significantly to the sell-off; in addition, many investors wanted to sell after an "up" week.
Cramer discussed earnings and data in the coming week, with the caveat that Friday's employment data will have an impact on stocks and bonds, however, the worries about war might trump any of these factors. Cramer suspects bond-equivalent high yielders may be buys, and momentum plays might continue to sell off. Without a resolution in the Ukraine, or if something negative occurs, it is worthwhile to approach stocks with caution in the week ahead. Cramer would avoid high-flyers without profits.
Corning (GLW) is likely to report strong earnings, and might be a buy as "value tech" names rebound. The stock has risen 16% for the year, and may go higher, especially since Apple (AAPL), which uses GLW's gorilla glass, reported a stellar quarter.
Herbalife (HLF) is a target for the shorts. Cramer wants to hear what management says, but no matter what, "Bill Ackman (hedge fund manager) is not going to stop (trying to destroy the company)."
3D Systems (DDD) reports before the bell. This stock is a $49 stock that declined from nearly $100. The stock disappointed and declined. If it reports a good number and gets hammered, Cramer would "look out below" for other high-flyers.
Twitter (TWTR) might be doing better than many expect, but it is likely to get sold off. However, there could be a short covering rally, in the best case scenario. Facebook (FB) might be a buy on good results from Twitter.
Time Warner (TWX) might be worth buying ahead of the quarter. It is likely to issue a strong report and has a generous buyback.
Actavis (ACT) is a high-flying Irish biotech. It is a "tell" for momentum healthcare stocks.
MasterCard (MA) is down a lot from its high of $84. Visa (NYSE:V) reported a poor quarter and dropped 10 points. Cramer is concerned Russia might shut down Visa's business in retaliation for U.S. support for the Ukraine. MasterCard also has a large Russian exposure, and might be vulnerable.
T-Mobile (TMUS) is the "wrecking crew" for telecom. TMUS is engaged in radical cost-cutting, which is turning the pricing in telecoms "upside down." Cramer would consider buying Verizon (VZ) and AT&T (T) on a decline on Friday after TMUS reports.
Chevron (NYSE:CVX) is due for a "breather." Cramer has sold a portion of the CVX holding in his charitable trust.
Cramer took some calls.
Chiquita Brands (CQB): The drought conditions are driving up the price of many commodities. Cramer would take a look at the price of bananas before opining on CQB.
Change of the Guard. Stocks mentioned: iShares Silver Trust (NYSEARCA:SLV), SPDR Gold Trust ETF (NYSEARCA:GLD), Emerald Oil (NYSEMKT:EOX), Xerox (NYSE:XRX)
How can a market keep going up if its leadership is selling off? Momentum stocks are now vanquished, but Cramer doesn't think a change in leadership necessarily spells carnage to the market in general. During the dotcom era, defensive stocks still held up, even as the dominant sectors tanked. Cramer would avoid stocks of companies that don't emphasize profitability and where insiders are more likely to buy than to bail. The shift from radical growth to sturdy value has been healthy for the market. Amazon's model of spending and not worrying about profits has been questioned, given the sell-off in the stock, which was a leader in the high-growth segment. Investors are turning toward solid, profitable stocks. Until there is insider buying or mergers in software-as-a-service and tiny biotech stocks, they will continue to sell off.
Cramer took some calls:
iShares Silver Trust (SLV): Cramer prefers gold to silver. With global fears mounting, the GLD is a better buy than SLV.
Emerald Oil (EOX) is disappointing, and it is hard to account for why it isn't doing better than it is.
Xerox (XRX) didn't report a good quarter. "I'm going to say 'no' to that."
Cramer's Playbook: Roth IRA versus Traditional IRA
Many people wonder if they should open a Roth IRA or a regular IRA. Anyone can contribute to a Roth IRA if they make less than $122,000 a year. With the Roth IRA, contributors pay with after-tax income, so it won't decrease the tax bill, but once the money is in the Roth IRA, the holder never pays taxes on it again, even when the holder withdraws it from the age of 59 and over. A regular IRA holder doesn't pay taxes on contributions, but withdrawals are taxed. The decision is whether to pay taxes upfront or whether to pay taxes after retirement. For those whose tax rate is relatively low, a Roth IRA is preferable.
A Roth 401(k) is similar to a Roth IRA, in that one makes contributions with post-tax money. It is possible to make more contributions to a Roth 401(k) than to a Roth IRA, and for a Roth 401(k), there is no income limit. A Roth 401(k) has similar tax advantages as a Roth IRA.
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