Cramer's Mad Money - The Dreamforce Manifesto (12/7/10)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday December 7.

CEO Interview: Marc Benioff, Salesforce (NYSE:CRM), Oracle (NASDAQ:ORCL)

Cramer has often recommended (CRM), which is up 550% since 2008 and 54% in the last six months since he included it in his portfolio of momentum stocks. Cramer continues to be bullish on Salesforce, because it has become "pretty unstoppable."

The company is always innovating new products, and its new Dreamforce convention resembles a "MacWord for cloud computing," with over 30,000 guests registered. CEO Marc Benioff says the response to the conference has been "pretty overwhelming," as well as the reception of the company's new product,, which enables customers to manage and share information and allows clients to roll out a database quickly and easily at a very low cost. This "next generation database" has everything right on the internet, without the need to buy new hardware, software or hire more workers. Benioff calls "software right out of the cloud," while other companies are behind the curve.

Cramer suggested the new product is a kind of "manifesto against Oracle (ORCL)," or a way of saying to its competitor, "Hey, you get off of my cloud." Benioff, who worked at Oracle before he used seed money to start up insists there is room in the tech world for both Salesforce and Oracle, that Oracle will continue to be partners in many ways, but is offering something customers can't find anywhere else.

Cramer continues to be bullish on

It Hasn't Been the Same Since the Nasdaq Crash: Dell (NASDAQ:DELL), Sara Lee (SLE), IBM (NYSE:IBM), Krispy Kreme (KKD), Abbott Laboratories (NYSE:ABT)

On Tuesday, after a reversal of the Dow that sent the index down just 3 points by the end of the day, Cramer said "this market needs a few cheerleaders." It hasn't been "correct" to be a cheerleader for the market or exuberant about stocks since the infamous Nasdaq crash 10 years ago when the Nasdaq rallied from 1,000 to 4,700 before falling to around 1,000. The devastating bloodbath sent so many people swearing "they would never get drunk on equities again," and Cramer cited this as the reason headlines seem to be bearish on stocks.

While Washington is working out a compromise that would extend unemployment benefits and tax cuts, the media is concentrating on insignificant negative data. The papers allege Europe is weak, and cites Sara Lee (SLE) and Dell (DELL) as examples of businesses reporting slow sales in Europe, while Cramer points out these are two companies losing significant market share to their competitors anyway. As always, he urged viewers to pay attention to what CEOs have to say and the numbers companies report rather than relying on the bearish whims of the media.

Cramer answered callers' questions:

IBM (IBM): "They laid out a plan at a meeting...I was skeptical...perhaps they have overstated the case. I was wrong. This stock can go much higher...I urge you to hold it. You have a winner."

Krispy Kreme (KKD): "It's not a stock I'm has had a very big run...I am not willing to stick my neck out when I have so many high quality restaurant stocks...the company has a checkered history."

Abbott Labs (ABT): "It is so darn cheap, such a good yield. It is worth owning. I can't tell you to sell a stock so cheap even though it is out of favor right now. I like momentum, but I also like value."

CEO Interview: Kevin Johnson, Juniper (NYSE:JNPR), Cisco (NASDAQ:CSCO), New York Stock Exchange (NYSE:NYX)

If Cisco (CSCO) fails, can Juniper be far behind (JNPR)? After Cisco's multiple disappointments, one might think that Juniper, which makes switches and routers for telco companies, might also be in hot water, but it is apparent that Cisco's problems are Cisco-specific. Business is strong, the problem with Cisco is that it is too big for its own good. Juniper, which is just a tenth the size of Cisco, is leaner, meaner and has plenty of room to grow.

Juniper provided strong guidance for the fourth quarter and is making "small, smart acquisitions" that should double the size of its enterprise business. The company trades at a multiple of 20 and has a 22% growth rate. CEO Kevin Johnson says Juniper is "a pure play on high performance networking" and the company strives to give its clients "capacity and confidence" to improve networking. Juniper devotes 21% of its revenues to research and development to improve the quality of its products.

Two areas of concentration for Juniper are cloud computing and mobile internet. Concerning the latter, Juniper is providing better distribution to deal with the explosive growth in wireless devices and the pressure they put on networks. Juniper is currently handling the massive data center required by its client, the New York Stock Exchange (NYX). When Cramer asked about Juniper's "lumpy" quarter, Johnson responded that the company received a large amount of orders the last week of the quarter and proudly declared that demand is strong.

Oracle's Chart is Prophetic

Not every stock that declines is necessarily becoming cheaper and not every stock that is going up is getting more expensive, said Cramer. With so many mediocre stocks running up these days, it might be the case that this market is in a "buy high, sell higher" mode. There might be no point waiting for weakness in some cases.

When a stock is a winner, the potential investor needs to bypass the psychological roadblock that automatically says "I missed it." The truth is, said Cramer, is that it isn't always possible to get in on the ground floor, and it is okay to buy some stocks after they have made significant moves.

Cramer thinks Oracle is an example of a stock that has run and is going higher. Ken Shreve, technical analyst at took a look at Oracle's chart, which broke out in September and has been consolidating since. There were three straight weekly declines, which is usually a bad sign, but these declines were on low volume, which, like a polygraph, demonstrates that the declines might be lying. What is probably happening is that sellers are leaving Oracle making room for the buyers. This was confirmed when Oracle moved up after the declines.

The fundamentals back up the story told by Oracle's chart. The acquisition of Sun Microsystems is going smoothly, Oracle is seeing accelerated revenue growth with a 48% growth in sales and numerous product catalysts for 2011. Oracle trades at a multiple of 14 with a growth rate of 15%, which is a steal. While there is some concern over competition from, Cramer thinks ultimately Oracle will continue to be a winner.


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