Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday June 13.
10 Things to Watch in the Week Ahead: Bob Evans (NASDAQ:BOBE), FedEx (NYSE:FDX), Red Hat (NYSE:RHT), Darden (NYSE:DRI), Kroger (NYSE:KR), CarMax (NYSE:KMX), Rite-Aid (NYSE:RAD). Other stocks mentioned: Intel (NASDAQ:INTC), Alcoa (NYSE:AA), Oracle (NYSE:ORCL), Aetna (NYSE:AET), Wellpoint (WLP), Cigna (NYSE:CI), Celgene (NASDAQ:CELG)
For Cramer's special "Family Affair" edition of Mad Money, Cramer told the live audience that there is plenty of uncertainty in the market. While Intel (INTC) gave a bullish pre-announcement, Iraq is still a worry, although the Dow climbed 42 points. Cramer would be prepared for a sudden sell-off because of worries about rising oil prices, and Cramer would not be in a hurry to buy.
May Industrial Production: Given the strength of autos, aerospace and construction, it is likely to be strong.
May Housing Starts may be weak, given the slowdown in mortgage applications.
Bob Evans (BOBE) is likely to report a not-so-hot quarter, but Cramer thinks it is a buy, because it seems likely to split up.
Federal Reserve statement: Janet Yellen's press conference is likely to be "tense," but Cramer thinks there is too much worry about the Fed. Cramer thinks the Fed should stop buying bonds and perhaps should sell them.
FedEx (FDX) reports earnings. Management tends to give very informative conference calls about the state of the economy. The business is good, but Cramer would be careful of the transports.
Red Hat (RHT) could be the most important earnings call of the week to gauge the cloud sector. Cramer prefers "old tech," but the call could signal a turn in the sector.
Rite Aid (RAD) should be interesting, because of the recent unpleasant surprise about the prices it pays for its products. Cramer thinks it is a buy, but management should give more color about what went wrong. He would wait and hear the conference call before buying.
Kroger (KR): Cramer has been watching mergers and acquisitions in the supermarket space, and management might give some information about which stocks to focus on. He also wants to hear about Kroger's organic and natural food offerings.
Darden (DRI) is dumping Red Lobster, and Cramer wants to hear more information about this "once fabulous, now moribund chain."
Cramer took some questions:
Celgene (CELG) has a strong pipeline and is a good stock to hold for the long-term.
Oracle (ORCL) reports next week, and it is "doing a good job." Management is tired of playing "second fiddle" to the software as a service space, and should make dramatic changes in the company.
Disney (NYSE:DIS) versus Cedar Fair (NYSE:FUN). Other stocks mentioned: Ascena (NASDAQ:ASNA), Costco (NASDAQ:COST), Gogo (NASDAQ:GOGO), Netflix (NASDAQ:NFLX), American Airlines (NASDAQ:AAL)
With the possibility of oil prices rising because of conflict in Iraq, Cramer looked at possible buying opportunities. In the theme park space, Disney (DIS) and Cedar Fair (FUN) are strong, stable companies. Disney is an iconic company, but is one of the most shorted stocks in the Dow. When gas prices rise, DIS tends to fall "like clockwork," but historically, this has been a buying opportunity. Theme parks make up only 21% of this diversified company. It reported a great quarter, but the stock went lower. Cramer thinks Disney makes an ideal core holding, and when it pulls back, investors should buy more. It has a great film business, and it now owns the Star Wars franchise. ESPN has been a winner. Disney's theme park business is resilient, and it reported an 8% increase in sales this spring. Cramer is not worried about Disney's theme parks. The company trades at a multiple of 18 with a 16% long-term growth rate; "I will push this hard if it ever goes below $80."
Cedar Fair (FUN) is a pure play on theme parks and is only 3 points off its high. Cramer thinks it could sell off with oil going higher. Its regional parks are within driving distance of many customers, but it is still a buy on weakness for its dividend, since its yield will increase as it gets hit. Currently, its dividend is 5.1%, and with plans to raise the yield, if the stock stays where it is, it could rise to 6.7% by next year. Cramer thinks these are both buys. Disney has an under-appreciated growth story and FUN is a solid dividend stock.
Cramer took some questions:
Gogo (GOGO) has an analyst meeting in the coming week, and management needs to make the case that it has better technology. "I am on the sidelines and I'm worried, because people tell me it doesn't work with Netflix (NFLX), and that is one of the most important forces in entertainment."
American Airlines (AAL) may go up dramatically over the long term, but it may go down temporarily on weakness in oil.
Family Therapy: OpenTable (NASDAQ:OPEN), GrubHub (NYSE:GRUB), Yelp (NYSE:YELP), Sotheby's (NYSE:BID), Twitter (NYSE:TWTR), Facebook (NASDAQ:FB), Energy XXI (NASDAQ:EXXI), Marathon Petroleum (NYSE:MRO)
Cramer held live "therapy sessions" with audience members to resolve family conflicts over stocks. A mother and daughter disagreed about GrubHub (GRUB) versus OpenTable (OPEN). The daughter prefers GrubHub because it is more convenient for takeout. The mother feels GRUB is volatile, has weak sales growth and is a "fad." Cramer is worried that Yelp's (YELP) delivery.com might give GRUB a run for its money, and while he thinks GRUB might go higher, Cramer concluded, "I don't trust it."
A father and son disagreed over Rite-Aid. The father thinks the stores are old-fashioned, the prices are too high and that competition is fierce. Cramer says that as stores are being remodeled, sales are increasing, and the company's private label brand is successful. RAD has improved its balance sheet. Even though there have been a few disappointments, Rite-Aid should continue its turnaround story, and although its competitors are formidable, there is room in the industry for all the players.
Sotheby's (BID) is a company a son wants to buy, against his mother's wishes. Cramer thinks Sotheby is "played out," and agrees with the mother.
Energy XXI (EXXI) is a stock a son wants to sell, but the father tells his son to hold onto it. Cramer doesn't necessarily sell EXXI, but he thinks Marathon (MRO), which is down, is a better stock to buy.
Priceline's (NASDAQ:PCLN) "Seamless App." Stocks mentioned: Google (NASDAQ:GOOG), (NASDAQ:GOOGL), Yahoo (NASDAQ:YHOO)
Priceline (PCLN) announced it was buying OpenTable for $103 per share, a "monster" 46% premium. Cramer says he has been "effusive" about praising both companies," because both companies have used technology to their advantage. PCLN has a multiple of 20 and has made winning acquisitions. OpenTable is an online reservation system that increases value for restaurants by reducing losses from no-show reservations. OpenTable is increasing at a 28% pace in North America and 42% abroad. The most exciting part about OPEN is the handheld app, which could be combined to create a "seamless app" for Priceline. OPEN jumped 48% on the announcement of the bid, but there are other bidders interested. Cramer thinks that Google (GOOG), (GOOGL) might outbid Priceline or Yahoo (YHOO), which is selling off Alibaba. Yelp (YELP) spiked 14%, and has an app that competes with OPEN. Many of these companies are heavily shorted, but they are more valuable than the market thinks they are.
Intel's Dry Spell Is Over: Other stocks mentioned: Hewlett-Packard (NYSE:HPQ), Micron (NASDAQ:MU), Western Digital (NASDAQ:WDC)
Intel was a dominant stock during the PC era, but has been playing catch-up with the mobile revolution. A new CEO, Brian Krzanich, pre-announced better-than-expected sales and earnings, and this CEO is "restoring the greatness" of Intel. PCs are coming back to life, but Intel is expanding beyond old-fashioned technology. Hewlett-Packard (HPQ), Micron (MU), Western Digital (WDC) are all buys on Intel's news. Cramer suggests the best buy on Intel's news is still Intel, with a 3% yield. "Intel's dry spell is over," said Cramer.
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