Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday May 20.
12 Earnings Statements and IPOs to Watch: TechData (TECD), AutoZone (AZO), Medtronic (MDT), American Eagle (AEO), Ralph Lauren (RL), Toll Brothers (TOL), Costco (COST), NetApp (NTAP), Heinz (HNZ), Omnivision (OVTI), Freescale Semiconductors (expected to trade under the symbol FSL) other stock mentioned: CurrencyShares Euro Trust ETF (FXE), Apple (AAPL)
Cramer told viewers to keep an eye on CurrencyShares Euro Trust (FXE); any move up should predict a move up in stocks. He also discussed upcoming earnings and IPOs for the coming week:
Tech data (TECD) is a supermarket for all kinds of tech and predicted a rally in semis last year. Cramer would use it as a forecast rather than as a trade.
AutoZone (AZO) has been a "bellwether darling." For those trading the quarter, Cramer suggests using deep in the money calls.
Medtronics (MDT) has been in the best performing area of healthcare so far this year: medical devices. Cramer predicts a strong quarter.
American Eagle Outfitters (AEO) is another example of how it is hard to game teenage apparel. Cramer would stay away from the entire group.
Ralph Lauren (RL) has been dumped because of poor results from other retailers. Cramer likes the stock and thinks the company is on solid footing.
Toll Brothers (TOL) is best of breed in housing, but the housing sector is suffering. Cramer predicts a downbeat quarter.
Costco (COST) is a stock that should be sold Tuesday and bought back after the quarter, since it usually gets hit on a run-up prior to earnings.
NetApp (NTAP) cloud computing and data centers are the hottest of the hottest within tech. Cramer would buy after the quarter.
Heinz (HNZ) should see a continuation of its rally, but at more muted levels.
Yandex's demand will be huge, but the stock will ultimately cause despair for investors. Cramer would take the money and run.
Freescale Semiconductor (expected to trade under the symbol FSL) could be a good IPO on the comeback of the auto industry.
Sequans Communications (SQNS) is a French semiconductor company that is integral to the next generation of tech because it makes chips for 4G networking. The transition from one generation to another is a huge moneymaking trend. Cramer compares SQNS to Skyworks (SWKS), the engineer of chips that facilitated the transition from 2G to 3G, and SWKS is up 520% since Cramer recommended it in 2008. Many perceived the Sequans IPO as a failure, but it was a broken IPO, not a broken company; UBS did a lousy job of kindling interest in the IPO, which opened at $10, dropped to $7 and is now just below the IPO price. The stock is growing aggressively and might catch some upgrades by the end of next week. Revenue is up 107% year over year and it trades at a multiple of 4.5.
The first batch of social media IPOs will have valuations so rich that other techs will seem cheap in comparison. Linkedin (LNKD) popped 109% in the first day of trading, but in comparison, Salesforce.com (CRM) and Netflix (NFLX), which are considered overvalued, are not so expensive.
LinedIn is the professional networking equivalent of Faceobook for which premium subscribers pay a fee. These premium subscribers along with marketing and hiring solutions comprise LNKD's revenue. The company became profitable for the first time last year and now has a market cap of $9 billion. The stock is trading at 37 times trailing sales, which is sky high. Even if the company doubles its revenues, it will still be trading at 20 times forward sales, compared with CRM, which is priced at only 10 times forward sales. Even though CRM is up 500% since Cramer got behind it in 2008, it is still cheap compared to LinkedIn, especially since CRM excelled in every metric in its last earnings call and blew away expectations. Netflix is thought to be expensive at 4 times forward sales, but unlike LinkedIn, every Netflix user pays a subscription fee. Both Netflix and Salesforce.com seem cheap compared to the new "hot"social media plays.
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