Stocks discussed the in-depth session of Jim Cramer's Mad Money TV Program, Monday February 7.
Cramer urged viewers to overcome their fear of red hot stocks which are up huge amounts and are still going higher. He used yoga-themed athletic apparel stock Lululemon (LULU) as a prime example. The stock trades at an apparently "nosebleed" multiple of 42, but this is offset by its "torrid" 29% growth rate; "I can count on one hand the number of stocks with that kind of growth rate," said Cramer. Lululemon seemed expensive back in September, but is up 81% and up 15% since December. Cramer called Lululemon a Junior growth stock, which is still in its infancy, or at least its childhood. There are only 124 stores nationwide, and yet Lululemon has created a brand beloved not just by female yoga enthusiasts, but all women.
The short interest is a huge 22%, but Cramer thinks the shorts will be proven wrong. The company's market cap is just $4 billion, one tenth the size of Nike (NYSE:NKE). "Lululemon has totally captured the fitness Zeitgeist. It knows what women want." For those who think the stock is expensive, "get ready for it to get more expensive" said Cramer, who would buy LULU on any decline.
CEO Interview: Irwin Simon, Hain Celestial (NASDAQ:HAIN) with stocks Wal-Mart (NYSE:WMT), Whole Foods (WFMI)
One of the biggest health trends is the war against obesity, with 68% of Americans overweight. Hain Celestial (HAIN), a producer of great-tasting beloved healthy brands, reported its "best quarter ever" with a 2 cent beat and a 21% rise in revenues. Its Greek Gods brand yogurt is up 100%, long-time favorite Celestial Seasonings tea saw double digit growth, and antiobiotic free chicken sales were up 23%. The stock has risen 61% since last April and 12% since CEO Irwin Simon appeared on Mad Money in November. The fact that Hain's market cap is only $1 billion "makes no sense whatsoever" to Cramer.
Irwin Simon explained the reinvention of yogurt that seemed like a "dead" area with the introduction of more creamy Greek yogurt. Celestial Seasonings is reaching a whole new generation of consumers and is adding new brands, including wellness teas. Hain is benefiting from the huge growth in Whole Foods (WFMI) and even Wal-Mart (WMT) is making the transition to healthier choices. The move to get junk food out of schools means Hain Celestial products are showing up in school vending machines. The company has 400 products in China, is expanding its formula brand into 110 Asian cities and has 10% market share in Hong Kong. Carl Icahn, who owns a stake in the company "has been a good partner and a good shareholder," says Irwin Simon.
"This is one of Mad Money's best stocks," said Cramer. "It should be double its market. That is how big the opportunity is."
Cramer's Homework: Yahoo (NASDAQ:YHOO), Baidu (NASDAQ:BIDU), Hyperdynamics (NYSE:HDY), Inergy (NRGY), BGC Partners (NASDAQ:BGCP), Amyris (NASDAQ:AMRS), QR Energy (NYSE:QRE), Kinder Morgan Partners (NYSE:KMP)
Cramer got back to stocks viewers stumped him with on the Lightning Round. After doing research, he gave his opinions:
Yahoo (YHOO): The company gave downside guidance and shows a lack of growth and a lack of strategy. Cramer thinks Yahoo is worth less than the sum of its parts, and until it gives clarity about what it is going to do about its Asian assets and its strategy for its core business, "I am on the sidelines," Cramer said. For a Chinese internet play, he would buy Baidu (BIDU), which reported a great quarter.
Hyperdynamics (HDY): This little $5 oil spec is too risky. With its assets in Africa and a recent terminated deal, Cramer doesn't think it is worth the risk and would buy Inergy (NRGY) instead for stability and income.
BGC Partners (BGCP): Is a compelling play on FinReg and is an excellent $8 speculative play with a 6.9% yield. "You've got momentum with that name."
Amyris (AMRS): This recent IPO has done well and has doubled from $16 to $33; "that was money for the taking." This genetic engineer of yeast strains for chemicals and fuels has good market share, but is not expected to turn a profit anytime soon. "We missed it. Let's go get the next one."
QR Energy (QRE): This MLP had its IPO on December 16 and is up 11%. "It is a strange name and a strong name" with a "notorious" 7.4% dividend. "I like this new name with a big payout that is getting better." While Cramer doesn't think it is better than Kinder Morgan Partners (KMP), "If it gets hit, I'll be all over it."
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