Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday May 30.
10 Things to Watch in the Week Ahead: Apple (NASDAQ:AAPL), Dollar General (NYSE:DG), Brown Forman (NYSE:BF.A), (NYSE:BF.B), Phillips Van Heusen (NYSE:PVH), J.M. Smucker (NYSE:SJM), Ciena (NYSE:CIEN), Joy Global (NYSE:JOY), Zoe's Kitchen (NYSE:ZOES). Other stocks discussed: Splunk (NASDAQ:SPLK), Target (NYSE:TGT), J.C. Penney (NYSE:JCP), Cisco (NASDAQ:CSCO), Deere (NYSE:DE), Caterpillar (NYSE:CAT), Weyerhaeuser (NYSE:WY)
Are people too complacent about the market hitting new highs? "Sell in May, go away," didn't work this year, noted Cramer. The upcoming week may be difficult for bulls, because there are plenty of overextended stocks. Splunk (SPLK) got punished in the past week after it didn't issue aggressive guidance, and fell 16%. In addition, the lack of earnings in the coming week means a dearth of news to gauge the market. Cramer discussed things to watch in the week ahead.
The Apple (AAPL) Worldwide Developers Conference should be upbeat. The Apple Stores have been great job creators and are providing new solutions for small businesses. Cramer wouldn't be surprised if people take gains in the stock after this conference.
Dollar General (DG): Dollar stores have been outperforming, however, medium-range retail is coming back, and their numbers look good. Stocks like Target (TGT) have room to run, and with a new CEO and a 3% yield, Cramer would rather own Target than DG.
J.M Smucker (SJM) is likely to talk about takeovers, and it is more likely to be the predator than the prey.
Joy Global (JOY) is not a stock Cramer wants to be in, given the dislike of coal by the Obama administration. Cramer would ignore chatter about a short squeeze.
Zoe's Kitchen (ZOES) is likely to deliver on its numbers. Stocks of restaurants have been hit-or-miss affairs, but Cramer likes Zoe's prospects for the long term.
The European Central Bank will make a decision about interest rates. It is likely to propose a cut. Cramer thinks this meeting will ignite selling.
Non-farm payroll jobs report: If employment is strong, people will worry about wage inflation, and if it is weak, it could drive down stocks as well. Cramer is not sure what will trigger selling and thinks the employment number will cast a pall over everything that precedes it; any gains during the week can be undone by the jobs report.
Cramer took some calls:
Weyerhaeuser (WY) WY is breaking out here; "I like it."
CEO Interview: Tom Pike, Quintiles (NYSE:Q)
What if you want exposure to biotech, but without the risks of FDA roulette that can cause a company to succeed or fail on one approval? Quintiles (Q) is a contract research organization that conducts outsourced clinical trials. Quintiles is the top player in this space, particularly in late stage tests on which biotechs spend the most money. A month ago, the company reported a 13 cent earnings beat on higher than expected revenues that rose 8.5%. Its gross margins are improving, and it has a huge backlog. The stock has risen 15% since Cramer last spoke to CEO Tom Pike last August. The CEO said his company has double digit growth and has a deal with the NFL to monitor its injury data. There is strong funding for biotech, and this has been good for Quintiles. Cramer thinks it has a great business model and is not an expensive stock.
Old tech vs. New tech: Microsoft (NASDAQ:MSFT), Salesforce.com (NYSE:CRM), Q2 Holdings (NYSE:QTWO), IBM (NYSE:IBM)
Old tech versus new tech: which will win out? After money managers have gotten burned in new tech, they have been buying older tech stocks. There was a "shocking" announcement of a team-up between Salesforce.com (CRM) and Microsoft (MSFT), integrating CRM's platform with Microsoft's functions. The "new tech" cloud pioneer and classic tech name Microsoft were direct competitors for a long time. The two are meeting in the middle as MSFT is getting more "cloudy." MSFT is powering higher, and CRM has dropped recently. Splunk, the data analytics company, fell dramatically after earnings. New tech is more vulnerable than old tech. Cramer would look to older tech names rather than new.
Cramer took some calls:
Q2 Holdings (QTWO) is a small software as a service play and "the kind of stock I'm worried about. This is not the kind of stock I'm recommending right now."
IBM (IBM) is one old-tech stock Cramer has given up on. "This company is challenged for growth ... it has been a big disappointment in 2014. I think it is going to stay that way."
Mad Tweets: GasLog (NYSE:GLOG), Interactive Intelligence (NASDAQ:ININ), Entegris (NASDAQ:ENTG), CalAmp (NASDAQ:CAMP), Boulder Brands (NASDAQ:BDBD), B&G Foods (NYSE:BGS), WhiteWave (NYSE:WWAV), Sysco Corporation (NYSE:SYY)
Cramer answered questions from Tweets:
GasLog (GLOG) is a company that owns and operates ships that carry liquified natural gas, and the stock is up 40% for the year, as it expands its fleet. There is demand for LNG, but the stock is about a demand for ships, and there might be a glut of shipping capacity. "GLOG is not for me."
Interactive Intelligence Group (ININ) provides cloud-based software that allows companies to automate call centers. The stock has fallen 38% this year and has reported disappointing results. However, its cloud orders have been growing 165% over the last year. The stock is incredibly expensive, and its multiple is in the triple digits. The valuation too rich, and it is too risky. It could be a speculative stock, but only for the very risk averse and only on a pullback.
Entegris (ENTG) makes products for the semiconductor industry, and the stock could "make sense." Cramer thinks it might be a takeover target. Cramer likes it as a speculative stock.
CalAmp (CAMP) makes wireless equipment, and has been hammered, down 32% for the year. The stock is not a buy because of heated competition in the industry.
Cramer likes both Cisco and Sysco (SYY).
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