Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday August 18.
The Nordstrom (JWN) conference call seemed to deliver good news, with acquisition, brand expansion and strong sales numbers. However, when management said it was going to invest $3.9 billion in the business, the stock sold off. It has an Omnichannel strategy, and many companies have to spend to stay competitive. The trouble is, the better management makes the website, the less people need to go to the store. But with JWN, the store is the essence of the experience. "The web neutralizes what I like best about Nordstrom," said Cramer, including the smart, helpful salespeople, who pleasantly introduce additional items to buy. "It is only going to get tougher and more competitive for Nordstrom over time."
Cramer took a call:
Tiffany (TIF): Cramer is concerned about it. TIF has had a fabulous run. "I can't tell anyone to sell it, but I can't say buy it."
People who sold out of positions on Friday missed out on Monday's 176 point rally. In a time of geopolitical uncertainty, a rally may seem surprising, but part of the rise might have been due to the fact that it seems that diplomacy could work in the conflict between Russia and the Ukraine.
People sold on Friday partly because of the Federal Reserve and worries about raising rates. However, Cramer doesn't think the Fed should be the "be all and end all" of trading approaches. There is some inflation, but there is less than we thought. Job growth is happening, but wages are stagnant. The increase of mergers can also threaten jobs, since much of the streamlining in acquisition means cutting employees. In addition, the Affordable Care Act is putting a damper in small business. High down payments are discouraging home buying. Of course, people want to see economic improvement but not so dramatic as to cause a rise in interest rates.
Another reason for the selloff on Friday is the consistent rise of stocks and the feeling that we were "due" for a decline. Yelp (YELP), however, has recovered and Cisco (CSCO) is back, showing that tech was "just resting." Retail and airlines might be coming back on the low cost of oil. Speaking of oil, energy stocks may be good opportunities. Many have been sent down dramatically and can be buys, since they have overcorrected.
Cramer took some calls:
MGM (MGM) has the best balance of exposure between Las Vegas and Macau.
BP (BP) is too levered to Russia. Cramer would look to a domestic oil company.
Monster Beverage (MNST) is a stock Cramer recommended last month, and he is taking a "victory lap" on Coca-Cola's (KO) announcement it is buying a 16.7% stake in the company. Monster soared 30% on the news. Cramer would take some profits in Monster, but he would not sell the entire position. For those who don't have a position in the stock, Cramer thinks it is a possible buy, because he believes it is going higher. The energy drink segment is soaring even after negative headlines about health risk. This news is "baked in" and people are drinking these beverages anyway.
Jefferies downgraded MNSTR, and Monster is likely to get more downgrades from "overly cautious analysts that tend to move in herds." MNSTR fell 5% on the downgrades, and there are likely to be more, but these are buying opportunities. Cramer thinks Coca-Cola's (KO) next move should be to buy WhiteWave (WWAV).
Cramer took some calls:
Annie's (BNNY): Cramer says he has been disappointed with this company's management.
Herbalife (HLF) reported a disappointing quarter. Cramer expected better growth. It might be a temporary lull, but given it is a battleground stock, Cramer would be careful.
CEO Interview: Jeffrey Ventura, Range Resources (NYSE:RRC)
Range Resources (RRC) is a low-cost producer of oil and natural gas and has assets in the Marcellus and Utica shales. CEO Jeffrey Ventura says he expects to triple production from the Marcellus while keeping costs down. In addition, the company is able to fetch amounts above the market price for natural gas. Ventura expressed confidence that the U.S. may one day be energy independent, and Cramer thinks RRC is a stock to keep on the radar.
CEO Interview: Phil Rykhoek, Denbury Resources (NYSE:DNR)
Denbury Resources (DNR) revitalizes oil and gas wells through the use of carbon dioxide. The company has found substantial wells with proven and probable reserves. The company forecasts 4%-8% production growth, which is modest for the industry, since Denbury needs to manage its carbon dioxide supplies as well. Pricing is hedged out to 18 months, the earnings are stable and it can support the dividend.
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