Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday May 9.
10 Things To Watch In The Week Ahead: Apple (NASDAQ:AAPL), Fossil (NASDAQ:FOSL), Take-Two Interactive (NASDAQ:TTWO), Deere (NYSE:DE), Sodastream (NASDAQ:SODA), Cisco (NASDAQ:CSCO), Kohl's (NYSE:KSS), Wal-Mart (NYSE:WMT), J.C.Penney (NYSE:JCP). Other stocks mentioned: Harman International (NYSE:HAR), Pandora (NYSE:P), PepsiCo (NYSE:PEP), Hasbro (NASDAQ:HAS), Paylocity (NASDAQ:PCTY)
Cramer discussed 10 things to watch in the week ahead:
Beats might be the target of a $3.2 billion takeover by Apple (AAPL). There should be some clarity concerning the deal by Monday. Apple is not considering a purchase of Beats just for its headphones and audio systems. James Iovine, along with Dr. Dre, founded Beats. Cramer thinks Apple CEO Tim Cook wants a parternship with Iovine, who knows what is going on in the music industry. If Apple just wanted exposure to sound systems, it would have considered buying Harman International (HAR). The street will not likely understand this acquisition, and Apple might drop a few points. "Apple, if you want Jim Iovine so much, just write him a check," Cramer said. He thinks Apple should buy Harman or Pandora (P) instead.
Fossil (FOSL) is thought to be merely a fashion watchmaker and is a volatile stock. Management should discuss wearable devices, which makes the company attractive. Cramer would pay attention to the conference call.
Take Two Interactive (TTWO): Grand Theft Auto continues to be popular, and Cramer thinks TTWO can work its way higher. Listen to what management has to say about how it is adapting to digital games.
Deere (DE) has been a rocket. It has rallied 10 points in the past few months. DE might put up a great number, but the stock tends to get hit on earnings because management is often conservative. Cramer would sell on the early morning pop before management talks the stock down.
Sodastream (SODA) has been trading on the rumor that PepsiCo (PEP) is going to buy a stake in the company. Management should put these rumors to rest, and then maybe SODA will actually trade on earnings rather than hearsay.
Cisco (CSCO): CNBC's Herb Greenberg threw a yellow flag at Cisco, and said he would be surprised if it doesn't disappoint. Greenberg thinks there is an inventory pile-up, and Cisco is going lower.
Kohl's (KSS), Wal-Mart (WMT) and J.C. Penney (JCP) are likely to report decent earnings, as the rotation is favoring larger, more consistent retailers. Wal-Mart is a good buy into the quarter. Cramer would not speculate with JCP, which isn't a viable risk reward situation.
Housing Starts: Cramer would pay attention to this number.
Cramer took some calls:
Hasbro (HAS) has gotten its act together. Cramer thinks the company could be bought.
Paylocity (PCTY) is a "software as a disservice to your portfolio" play. Cramer isn't recommending a "single one" of these recent SAAS companies that had IPOs recently.
The Incredible Shrinking Growth Stocks: Rocket Fuel (NASDAQ:FUEL), Millennial Media (NYSE:MM), ChannelAdvisor (NYSE:ECOM), The Rubicon Project (NYSE:RUBI), Ubiquiti Networks (NASDAQ:UBNT)
The incredible shrinking ecommerce plays are spreading anxiety in the sector at large. RocketFuel (FUEL) blew up on Friday, and was added to the list of formerly hot stocks racking up losses, including ChannelAdvisor (ECOM), Millennial Media (MM) and The Rubicon Project (RUBI). FUEL is an online advertising play that came public in September. It revealed terrific revenue growth and issued a secondary, and the stock has traded down ever since. It reported strong growth, but the prospect of its turning a profit is remote. ECOM is down 47% for the year and MM sold off 53% year to date. RUBI came public, rallied from $15 to $22, and has been brought down to $12. There is so much competition, not only among small names, but from larger, more established companies. Cramer sees failures or mergers on the horizon. Cramer would get out of these stocks.
Cramer took some calls:
Ubiquiti Networks (UBNT): Networking stocks are suffering. Cramer would avoid this one, in particular.
3 Recent Break-ups Create Value: Energizer Holdings (NYSE:ENR), Mondelez International (NASDAQ:MDLZ), Alliant Techsystems (NYSE:ATK). Other stock mentioned: Orbital Sciences (NYSE:ORB), Kraft Foods (NASDAQ:KRFT), Safeway (NYSE:SWY), Kroger (NYSE:KR), WhiteWave (NYSE:WWAV), Tesla (NASDAQ:TSLA)
Break-ups often create value. Energizer Holdings (ENR), Mondelez International (MDLZ) and Alliant Techsystems (ATK) are 3 new break-ups worth watching. Energizer is not just a battery company, but ENR has many cobbled-together businesses. ENR has extended into the personal care space, with razors, diapers and skin products. Wall Street likes companies that are simple to understand. Last week ENR announced it would spin off its personal care business, and gained 15%. The battery company produces cash and can offer a decent dividend, and management of the personal care business can invest in creating innovative products. Cramer thinks both companies could be takeover targets, and would buy either company on any weakness.
Mondelez was spun off by Kraft Foods (KRFT). Mondelez specializes in snacks, but still has its coffee business. Mondelez is spinning off its coffee segment and is going to focus on snacks, but it will still own 49% of the coffee segment. ATK makes aerospace parts and bullets. ATK is merging with Orbital sciences (ORB) to create a defense powerhouse, but is spinning off its sporting ammunition business. Even though these break-ups have been announced, there may still be more money to be made in any of these 3 names.
Cramer took some calls:
Tesla (TSLA) is not a a buy now, since these growth stocks are getting slaughtered.
Cramer's Playbook: Managing Risk
Many investors are risk averse and choose CDs, savings accounts and Treasury bonds. "Sometimes extreme prudence is another form of recklessness," said Cramer. These investments can produce hidden opportunity costs, in the form of what you are giving up by not looking for more of a return. Money may be safe with CDs, but with tiny yields, the money deposited can't keep up with inflation. Investors should think of this money as capital, money used to make more money. Even older investors should look to higher-yielding dividend stocks in secure companies rather than bonds. Interest rates are low, wages are stagnant, while prices for necessities continue to rise. As long as investors do homework on stocks and stay diversified, it is more than possible to beat the market.
Shutterstock (SSTK) is an online marketplace where clients can license photographs and videos. Many of these small stocks have gotten hit, but this company might have a long-term story and is taking market share. The company reported in-line earnings on higher than expected revenues and raised guidance. The stock fell 8% before rebounding later in the day. The stock has a rich multiple, even though it has gotten hit, but Cramer thinks it might be a buy if it falls lower.
Clients can contribute images and videos and SSTK sells and licenses the images and has high-profile clients, such as Disney (DIS) as well as individual photographers. SSTK has 35 million images and 1.5 million videos. SSTK is innovating ways to effectively search for and use images. Cramer would keep SSTK on the radar.
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