Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday January 24. Click on a stock ticker for more analysis:
Head of Cramer's Foreign Legion: Toyota (NYSE:TM)
Cramer hailed Toyota as the leading foreign stock; "Toyota doesn't make cars, Toyota makes mad money." As GM and Ford need to cut production to stay afloat, Toyota is fast becoming the world's leading auto producer, and is resembling a secular stock that is not dependent on the health of the economy. While TM has had recalls on some of its cars, its competition has been more vulnerable to this problem, and although the stock may seem costly, it fell $4 on Thursday to $131.70. In addition, the company has a 16% return on capital, 10% operating margins, 7% profit margins and a 15% return on equity.
Related: Toyota and Honda have a "Pleasant Problem."
Cramer invited Danny Meyer, restauranteur and author of Setting the Table: The Transforming Power of Hospitality in Business onto the show and asked him how food establishments should treat their customers. Danny Meyer discussed the difference between service and hospitality: "Hospitality is how you make people feel," and Cramer added that hospitality was the driving force behind higher multiple brands. Meyer added that how well a company is run often matters more than the food it serves, and singles out Chiptole as an example of a successful restaurant chain. "They hire for emotional skills and train for technical skills," he said and added, "I'm a fan of Ruth's too," although he is not sure how well the steak business is doing generally in the U.S. In addition, he believes that MCD's turnaround was due more to its business operations than its food and that Darden has been very consistent, but may not be able to compete in big cities like New York.
Related: Andrew Corn is bullish on Chiptole.
Even though GS is down, Cramer would not sell it, and he admitted an error in predicting that it would make shareholders $15 because it made $19. He believes that its multiple should go from 11 to 15, earning $25 a share. Cramer would do a little schnitzel (sell a portion and play with the house's money) on RAD and BBI which have both gone up. He would sell 25% of eBay and sell STZ altogether which is down $2 from where he likes it, and he commented "If Constellation Brands sold cheap scotch, I wouldn't be caught dead drinking it on my linoleum floor."
Related: Matt Pace discusses the role of BBI's Total Access plan in its competition with Netflix.
Cramer likes DNA better than AZN, believes HAS is stil a good stock and would buy SO and ED rather than buying an index fund.
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