Cramer's Mad Money - Another Cloud on the Horizon (10/20/10)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday October 20.

Andrew Damico, CEO, IntraLinks Holdings, Inc. (NYSE:IL), Equinix (NASDAQ:EQIX), VMware (NYSE:VMW)

With the cloud computing space feeling pain, particularly Equinix and VMware, Cramer thinks it is time to look for a new cloud computing name, because he believes in the long-term story.

Intralinks Holdings (IL) is a speculative cloud computing company that had its IPO on August 5th and is up 46% from its $13 IPO price. Bankers from JP Morgan (NYSE:JPM) started IL as an efficient way of sharing financial information. The company has a successful M&A business that allows those involved to share documents and make the process of making deals easier and more efficient. CEO Andrew Damico says the M&A business is a $9 billion market opportunity moving to a $13 billion opportunity in 2013; "We have a long runway ahead of us."

Intralinks is also making the process of clinical trials for drug research more efficient, and can cut the time required to perform a trial by 10 days, with a $2 million savings. Currently, its pharma business is growing at a 15% clip. Damico commented:

We don't just service our customers. We service our customers' customers, vendors, partners, advisors. We make it really simple for our customers to help their constituencies login, get access to our information that put up there, log out and get their work done.

Cramer recommended Interlinks, which has a market cap of just under $1 billion with a $9 billion addressable market. Since the stock is at its 52-week high, Cramer would wait for a pullback.

Parker-Hannifin (NYSE:PH), Goldman Sachs (NYSE:GS), Juniper (NYSE:JNPR), Apple (NASDAQ:AAPL)

With the Dow down 165 points on Tuesday and up 129 points on Wednesday, Cramer says the lesson that can be learned is not to panic. Industrials and commodities that sold off on China's interest rate hike should have been bought on weakness, although Cramer cautioned they might take a dip before rising because China is likely to raise rates again.

Unjustified bad news is proliferating, news which is proven wrong by the charts. Bears were picking on Parker-Hannifin (PH) which reported a "stunning" quarter. There was hand-wringing over Goldman Sachs (GS), but the stock rose from $153 to $159 in one day. Grim news about Juniper (JNPR) didn't seem to affect its stock price, and while Apple (AAPL) took a bit of pain over chatter about its iPad sales, the stock is back up.

Cramer reiterated his advice not to buy and sell based on headlines, but on homework and fundamentals.

CEO Interview: David Demshur, Core Labs (NYSE:CLB), Halliburton (NYSE:HAL), Weatherford (NYSE:WFT)

Oil plays have been hit hard lately after Halliburton's (HAL) disappointing quarter and Weatherford's (WFT) decline. Investors are searching for a secure way to play oil without direct oil exposure. Core Labs (CLB) beat estimates by one cent and its guidance was in-line. Cramer would buy the stock on any decline because it provides the useful service of helping oil companies locate the best places to drill.

The stock has a strong track record, with a 516% increase in 5 years compared to a mere 11% uptick for the S&P. Core Labs consistently pays shareholders with dividend raises. Demshur discussed Core Labs' broad range of clients, including Conoco. While Latin America in general has been generating business, Demshur says the company is reducing its assets in Mexico because of weakness there.

With concerns about the domestic economic situation and the falling price of natural gas, Demshur says Core Labs is in a good position since it is 70% levered overseas and 70% oil. Cramer is bullish on Core Labs.


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