Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday October 1
What You Need to Know from the CEO
With a slew of earnings in the coming week, Cramer gave viewers advice on what to look for when listening to a company's conference call:
1. Domestic versus overseas sales
2. Dividends. "Cold hard cash coming at you. That's what I want."
3. Market Share: Who's taking a bigger piece of the pie? "I'm not listening to guy who says, listen it's a bad environment... and the guy across the street is doing real well."
4. Who is blaming the government. Cramer said this matters the most with financial stocks - which banks are saying financial regulations are still hitting them hard and which banks are not complaining about pressure and are thriving.
5. Commodity pressure on the price of raw goods. For instance cotton prices are making a huge difference for retail.
6. Forecast for 2011.
Cramer discussed the upcoming week, detailing which numbers and earnings reports merit the most attention.
On Monday after the close, Mosiac (MOS) reports. Cramer thinks the fertilizer maker will give information that will help investors understand why the fertilizer space is so crucial. "We are running out of food," said Cramer, who expects Mosiac's report to be "magnificent." There is no reason to be "freaked out" by the huge hit corn prices took this past week. Cramer isn't so thrilled about seed producer Monsanto (MON) which will report on Wednesday, since he expects disappointing sales of Roundup, which has been accused of perhaps causing birth defects. Smartstacks, its hybrid corn seed, has not been meeting its targets for yields. For seeds, Cramer would buy Dupont (DD), which gave terrific outlook at least week's analyst meeting and has a sweet dividend.
The focus on Tuesday will be China and Yum! Brands' (YUM) success in the Middle Kingdom. Cramer's worries about Costco (COST), which reports on Wednesday, are not about its earnings, but about the advance on the stock, since it recently rallied 10 points; "I think Costco's going to have to shoot the lights out just to stay in the game up here." Cramer says the stock is worth buying lower. On Pepsi's (PEP) earnings on Thursday, Cramer expects to hear about worries over raw costs. This might give investors an opportunity to buy the stock below $65. Since the company has been buying back stock and meeting targets, there isn't much else that could bring down the price of the stock.
All of the earnings news may not amount to a hill of beans if the jobs number is not so hot on Friday. Cramer thinks this number will profoundly affect the market from now until the end of the year, but he is optimistic that it will be a strong one.
3 Things to Remember When Evaluating a Company
1. Be Smart about Smart Money. They are often wrong, but chasing hot mutual funds can yield advantages if you know where they are going.
2. Know Your Indicator. It's all well and good to follow the Baltic Dry Index, but keep current on your indicators, make sure you really know what they are measuring, and if they are still a relevant measure.
3. Don't Pay Attention Only to Analysts. Listen to everyone, particularly to people who have the pulse on consumer behavior.
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