Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday March 8.
Beyond the Charts: Google (NASDAQ:GOOG)
Now that earnings season is over and there is very little market moving news, "the charts are in control." In spite of its success with the Android and the bullish story of internet advertising, Google (GOOG) has an "incredibly ugly chart" which just keeps getting uglier as the bears drive the stock further down. Dan Fitzpatrick, technical analyst at TheStreet.com, thinks the stock will go as low as $550, down another 40 points.
Four times since January 2010, Google has tried unsuccessfully to break through its $630 ceiling, a sign of solid resistance. The fact that even a bullish November for Google didn't bring it past this level is a sign that it will be staying under $630 for a while. Fitzpatrick notes Google's gains have been on low volume and its dips have been on high volume, a sign of greater conviction on the downside. The chart's Bollinger bands show increasing volatility, and increased volume in selloffs indicate that Google is set for a 7% decline, according to Fitzpatrick.
"I'm not buying the negativity," said Cramer, who, on this rare occasion, disagrees with Fitzpatrick. With a multiple of 14 and a growth rate of 18%, Google is "cheap as all getout."
Android is the second best smartphone, and while Google has yet to generate significant revenues from YouTube "They are smart. They'll figure it out." Cramer does agree with Fitzpatrick that Google's destiny is not so bright until April, but after it reports in the spring, it might be bull season for Google. Cramer would buy June calls in the stock. While the technicals are in control now, the long-term fundamentals for Google are good enough that Cramer predicts Google will snap back after its report in the spring.
CEO Interview: Jerry Sweeney, Brandywine Realty Trust (NYSE:BDN)
REITs are known for their high yields and Brandywine Realty Trust (BDN) is no exception; the company has a 4.6% yield and is a comeback story on the return of suburban office space. The company has had a 26% gain since 2009 and is expected to see more upside as business is starting to improve. The company has properties mainly in the Northeast, in New Jersey and Pennsylvania with some properties in Texas and California. While Brandywine has 20% of the market in Southern New Jersey, it was responsible for 50% of suburban office deals.
Jack Sweeney says the company's return to its historical occupancy rate of 92-93% from its current 86% is an achievable goal in the near future, as customers are looking for quality as well as location, and "high quality defines our portfolio." Recently, the company leased a record 4.2 million feet, and a big catalyst for the move forward has been job creation and the gradual improvement in employment. Sweeney said that while the first priority is getting the balance sheet in shape, the company may consider raising the dividend as business improves. "This company makes so much sense," Cramer said.
Mad Mail: PDL BioPharma (NASDAQ:PDLI), Cree (NASDAQ:CREE), Koninklijke Philips Electronics (NYSE:PHG), Petsmart (NASDAQ:PETM), Ferrellgas Partners (NYSE:FGP), NiSource (NYSE:NI), Tanger Factory Outlet Centers (NYSE:SKT), Federal Realty (NYSE:FRT)
Cramer discussed PDL BioPharma (PDLI) after taking a pass on the stock because he needed to research it. This is an intellectual property company that licenses antibodies and collected royalties on treatments that use their technology. The company's main patent expires 2014, and Cramer calls it a "wasting asset." In addition, he doubts PDL can adequately support its 10.4% dividend.
While Cramer thinks Koninklijke Philips Electronics (PHG) is a good company as a play on incandescent lightbulbs, he would not buy the company only because of the bulbs, since he made that mistake pushing Cree (CREE) because of its LED lights.
Petsmart (PETM) is a very high quality company in a sector Cramer really likes. However, he would wait for oil and the stock to pull back before buying it.
When a viewer asked Cramer about interest rates and utilities, he replied that he doesn't think rising interest rates will have a significant negative impact on the sector. He would buy Ferrellgas Partners (FGP) and NiSource (NI). Cramer's top non-healthcare REIT picks are Tanger Factory Outlet Centers (SKT), Federal Realty (FRT), Brandywine (BDN).
Jim Cramer was up 31% in 2009. Click here now to sign up for Jim's Action Alerts PLUS and trade alongside him. Special discount for Seeking Alpha users.
Get Cramer's Picks by email - it's free and takes only a few seconds to sign up.