Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday September 16.
While Cramer was bullish on Deckers this past summer, with the stock up 66%, Cramer thinks it has hit a wall and doesn't think it is going to rally any time soon. Looking at the charts, Deckers has had 5 breakouts in 18 months, but the recent one could not even be sustained by heavy volume, a sign that the stock has fatigue. Deckers is now making lower highs, which is a sign the sellers are outnumbering the buyers, and is experiencing selling pressure at the 50 day moving average.
However, Cramer thinks the stock is profoundly misunderstood, because it is not just about trendy shoes, but about permanent trends. With winter coming, Ugg boots, which comprise 70% of Decker's revenue, should sell well. The company saw a 55% rise in international sales and predicts significant revenue growth. Cramer thinks the stock is "insanely cheap" selling at a multiple of 11.9 with a 24% growth rate. Cramer thinks Deckers has plenty of room to run.
Cramer continued his series on American manufacturing names with 3M (MMM), and Emerson (EMR), both of which are diversified among early and late cycle industries and have tended to bounce back early from economic slowdowns. The companies are world leaders with strong management teams and high revenue growth. Both companies are in a good position to make profitable acquisitions.
While many people associate 3M with mundane products like Scotch tape and Post-it notes, the company virtually creates its own markets with innovative products for industrial, transportation, healthcare, safety, security and protection, consumer and office, display and graphics, and electronic communications industries. 3M offers a respectable 2.5% dividend, which it has raised for the past 52 years.
Emerson (EMR) is more of a traditional industrial stock than 3M and is a "manufacturers' manufacturer." Emerson is a major supplier of process automation systems, mainly for energy end markets. Its network power business makes communications platforms and modules for data center industries. Emerson is benefiting from a global increase in infrastructure.
The bears keep repeating their doomsday scenarios, but Cramer urged investors to look at all the facts, not just those that support the negative view. While the recovery might take longer than many thought at first, job losses are declining, banks say the era of bad loans seems to be over. Back to school sales were strong, Apple's (AAPL) products are flying off the shelves and even high-end retail names such as Tiffany (TIF), Coach (COH), Saks (SKS), Williams-Sonoma (WSM), Nordstrom (JWN) are reporting good news. The housing inventory is being bought, thanks to low interest rates.
While Cramer considered Obama the enemy of business for a good while, it seems that the President has now changed his tune and is taking a more conciliatory tone to business. Finally, with emerging markets showing increasing demand for American products, there is a reason to be bullish in spite of the bad news bears.
FMC Corp (FMC)
Cramer urged investors to take a look at FMC Corp (FMC), a diversified global chemical company which specializes in herbicides and insecticides. With the stock up 90% since its low point in March 2009, Cramer thinks the stock is still a buy, and is his second favorite agriculture pick after Deere (DE). The company recently beat earnings by 6 cents and said it expects the agriculture sector to deliver its seventh straight year of record earnings. The company is predicting a 20% growth in earnings particularly in industrial chemicals. FMC has tremendous pricing power as the number one supplier of soda ash to the U.S. The company grew earnings by 121% year over year thanks to lower raw materials and energy costs. FMC focuses on technologies for leased crops in specific geographies, and has an edge over its peers.
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