Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday July 24.
Supervalu was fighting for its existence 2 years ago, but has risen substantially since. Early last year, the company brought in new management which cut costs and sold off non-performing brands. Supervalu is growing now rather than just fighting for its survival. The company has conventional retail supermarkets, hard discount groceries and wholesale food distribution. Cooperman thinks the sum of these 3 parts is greater than the whole, and SVU is a breakup story. SVU could be worth 20% more than it is currently. Cooperman thinks the discount segment will make a comeback. Cramer would only buy SVU for speculation, since he is not "crazy about" the supermarket space.
Atlas Energy is an MLP, and Cooperman thinks it is cheap and can raise its distribution. The stock yields 4.7% and trades at a 25% discount to its peers. Analysts think its distribution could grow at a 24% annual rate through 2016, which is faster than the group average. The company has multiple opportunities in organic growth and acquisitions. Cooperman thinks the stock could rise 28%. Atlas could be a takeover target, but even without a deal, it has upside. Cramer thinks Cooperman's ideas have been almost "foolproof" at the conference.
Cramer took some calls:
Cramer likes Kraft (KRFT), but thinks Mondelez (MDLZ) is a bit better.
Schlumberger (SLB) has run, but its earnings were just okay. It was battling high expectations and has declined. Cramer thinks the stock is a buy.
"The must-own stock of this earning season is Facebook (NASDAQ:FB)," said Cramer. Some people think the stock is overvalued. Cramer compared Facebook to the early days of Merck (MRK), when many were skeptical about the value of the big pharma company. Some declared Merck "the most overvalued stock on Earth," because its valuation surpassed that of General Motors (GM). Cramer had to face angry clients when his hedge fund held Merck, but his call ended up being a winner; Merck's products ended up becoming the biggest blockbuster drugs of all-time.
Facebook has real earnings. Cramer thinks FB could earn $3 per share for 2016, and it has 60% growth. This means it should trade at $90, a 30% premium to where it is currently trading. CEO Mark Zuckerberg outlined a multi-year growth strategy. Cramer thinks it is "preposterous" that FB is that cheap. A couple of years ago, FB had no mobile strategy, and now it is the "king of mobile." User-generated content is good for gross margins and for advertisers. Facebook may be one of the most lucrative stocks of the era.
Cramer took some calls:
First Solar (FSLR) is cheap. The stock rose a bit, but it is still a bargain.
Mattel (MAT) is in a "world of hurt" on a secular decline. Cramer would sell on any gain in the stock.
Enterprise Products Partners (EPD) is the best MLP. It is going higher.
Boeing (BA) has been under pressure because of worries that the aerospace cycle might be ending. The stock was downgraded by Merrill Lynch. Aerospace is levered to overall travel growth, and Cramer thinks it is a strong trend. Boeing produces fuel efficient planes at lower costs. Cramer thinks the stock is resting, down 10%. It is ultimately a buy, although it might dip lower in the interim.
Celgene (CELG) has a tremendous franchise in its Revlimid drug and is developing treatments for pancreatic cancer and arthritis. The guide-up was for real, but CEO Bob Hugin is non-promotional. It is likely the stock will drop further and provide a buying opportunity.
Qualcomm (QCOM) is having a spat with China over payments, and the stock has been punished. When this problem is resolved, the stock will go higher. Qualcomm is dominant in mobile, which gives it an advantage over the competition.
"Look at Skechers run," said Cramer, following its monster quarter with a 28 cent earnings beat and revenues that rose 37% yoy. The domestic business was up 35%, and its international segment rose 54%. SKX saw a 13.9% increase in same store sales and is building new stores. The stock rose 8% to an all-time high. A few years ago, Skechers seemed to have lost its way, but it is a major comeback story. The stock has risen 18% since Cramer got behind it in June.
Cramer congratulated CFO and COO David Weinberg on a great quarter; "I have never seen numbers like this from a retailer," Cramer said. Weinberg explained that Skechers' brands have resonance around the world, and it was a "perfect" quarter. The company is aggressive with marketing through celebrities and on social media. Weinberg thinks in a few years SKX could be "as big or bigger" outside of the U.S. as it is domestically. Finish Line (FINL) and Macy's (M) have reported that SKX is the number one or number two brand in their stores.
Airgas (ARG) gives a broad read on the U.S. economy, because it is levered to many industries. The stock has a history of creating value for shareholders. The company fought off a hostile takeover bid from Air Products (APD), but since then, the stock has been volatile. Airgas delivered in-line earnings. CEO Michael Molinini said the oil and gas business has been strong, but mining and defense has been lagging. Molinini added that the company was able to predict earnings in the past, but in the last couple of years, traditional models to gauge earnings have broken down. However, he is seeing a return in spending on equipment.
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