Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday November 8.
CEO Interview: Jeff Lunsford, Limelight Networks (NASDAQ:LLNW), Akamai (NASDAQ:AKAM), Netflix (NASDAQ:NFLX), Microsoft (NASDAQ:MSFT)
Cramer discussed Limelight Networks (LLNW) as the next Akamai (AKAM) (which has run 100% since he got behind it last January). Limelight delivers video content to companies like Netflix (NFLX). The stock jumped 30% since Cramer's September recommendation, but lost 8% on Friday after its earnings report.
Lunsford said the analysts were being a bit rough on the company for its EyeWonder acquisition which will expand the company's streaming media capabilities "...the strategic rationale is spot on and still we're very happy about this, and that drove the growth in the core business." The company is expanding its conduct delivery partnership with Netflix to a three year contract; currently, Netflix drives one fifth of all web traffic. Limelight also delivers for many Microsoft (MSFT) properties including its Azure platform.
Cramer said Lunsford is a "winner" and to stay with Limelight.
As the smartphone trend grows, one thing is clear; carriers like AT&T (T), Sprint (S) and Verizon (VZ) need more towers and more space on existing towers. American Tower is a primary beneficiary of this trend and has risen 50% since Cramer recommended it in September 2009. The company recently beat earnings estimates by 3 cents with revenues up 16% and raised guidance. Currently, AMT is the largest player in the tower space with more international exposure than any competing company.
Jim Taiclet says India is the world's fastest growing wireless market with only 50% voice penetration and in the early phases for wireless data. AMT has also made some initial moves into Africa and foresees growth for many years. Not only will more people buy smartphones, but individuals who already have devices will consume more data. AMT will provide the capacity for the astronomical growth expected in this space. AMT has also wired hundreds of malls, casinos and convention centers and will provide 4G, which is the next phase of wireless development. Cramer thinks AMT is going higher.
Overdeveloped Market Skepticism: 3M (NYSE:MMM), Bucyrus (NASDAQ:BUCY), Intel (NASDAQ:INTC), Dell (NASDAQ:DELL), Advance Auto Parts (NYSE:AAP), Hewlett Packard (NYSE:HPQ)
Cramer believes the "overdeveloped sense of skepticism" is the main reason for the recent rallies. Analysts refuse to budge from their bearish thesis, even as 3M (MMM) and Bucyrus (BUCY) reported excellent quarters. Coals, oils and copper should be running up, but the bears won't budge. The list goes on of sectors whose stocks should be jumping but are not as high as they should be: cell phones, auto parts and chemicals. Cramer calls this phenomenon an "unraveling bear market," where bears stay negative even as their arguments are being demolished.
PCs continue to be hated, even as Intel (INTC) keeps going up; those who listened to the negativity missed a 21% gain in the stock. In fact, Dell (DELL) and Hewlett Packard (HPQ) are also working, because the stocks are cheap and PCs are seeing 15% growth.
Advance Auto Parts (AAP), which reports on Wednesday was not greeted by enthusiasm by analysts, even though the company raised its price target from $64 to $70. The stock is behaving normally even if the analysts are not, and it hit a 52 week high. The bright spot is that these companies can actually thank the bears, because the negativity is bringing stocks higher.
Mad Mail: VF Corp (NYSE:VFC), Bank of America (NYSE:BAC), PIMCO High Income Fund (NYSE:PHK), Columbia Sportswear (NASDAQ:COLM)
Cramer told one viewer that when looking at Bank of America's book value, it is best to look at the tangible book value which is $12. Concerning PIMCO High Income Fund (PHK), Cramer said Fed chairman Ben Bernanke actually wants an increase in risky investments, including junk bonds. Comparing Columbia Sportswear (COLM) and VF Corp (VFC), Cramer says there is "no doubt" that VFC is the better company, especially since it didn't decline even as cotton prices hit a high, while Columbia's stock had to see a major decline before it was worth buying. However, he is concerned that VFC's stock price has yet to dip and he would be "very careful" about apparel makers, especially with the rise of raw costs.
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