Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday March 11.
Hewlett Packard (HPQ), Chevron (CVX), Xilinx (XLNX), Nike (NKE), Superior Industries (SUP), Lululemon (LULU), 3M (MMM), FedEx (FDX). Other stocks mentioned: Cisco (CSCO), Finisar (FNSR), Dick's Sporting Goods (DKS)
The market is just heartless. While the tsunami in Japan was tragic, the stock market just went onward and sent materials and industrial stocks upwards on the story of Japan's rebuilding after the crisis. Cramer thinks the rally in these stocks on the news out of Japan is premature, although he would pay attention to the issue of disturbances at nuclear power plants. The orchestrated Chinese slowdown should bring industrial stocks back to earth, so Cramer would take profits on these stocks on Monday morning.
There seems to be a breather in oil now that the Day of Rage in Saudi Arabia seemed to have expressed only mild annoyance, with only 200 protesters turning out. Cramer would like to see if the relaxation in oil price continues into the coming week. Everyone on The Street is talking about the effect of high oil and gas prices on companies, but Cramer would like to hear from management rather than analysts. Analysts meetings and earnings reports will provide investors an opportunity to get an inside scoop next week.
Hewlett Packard (HPQ) is having its analyst meeting where they should outline their strategy (if they have one) and will discuss the so-called tablet glut. The company is expected to talk about the future of the PC and if Cisco (CSCO) is taking market share (Cramer thinks not).
Chevron (CVX) is also having an analyst meeting and is one of the first oil companies to speak publicly on the effect of $100 oil. Chevron has a history of not profiting much when oil is high, and Cramer expects to hear a multi-year plan from this company and some indication of what their strategy is concerning natural gas.
Xilinx (XLNX) is having an analyst meeting after a bad week for tech. The custom chip company should indicate whether Finisar's (FNSR) devastating decline was specific to that company or an indication of a slowdown for semis.
William Blair & Company is holding The Future of Cloud Computing Conference. After negative news for tablets last week and Finisar's defeat, cloud computing might be the last bull standing in tech. While some worry about a "mushroom cloud," Cramer thinks the cloud sector will look bright, and if the news from Xilinx is also good, there could be a reversal in tech next week.
Superior Industries (SUP) reports earnings, and is an auto parts stock that is vulnerable to the high price of oil.
Lululemon (LULU) is reporting and the shorts are worried. Cramer thinks they could panic on a good number, and emphasizes this is not just an apparel stock, but a yoga-inspired lifestyle brand.
Nike (NKE) should give a solid earnings report after a good result from Dick's Sporting Goods (DKS) last week. The number to watch for Nike is future orders, since the company allows retailers to place orders 5-6 months in advance. Cramer would consider playing this stock with deep in-the-money calls with a stop out at $80.
3M (MMM) has an analyst report which should be a tell on the global economy. Cramer wants to hear about growth in China and its health and safety products. He likes 3M's analyst meetings in general, because they are upbeat.
FedEx (FDX) reports and should give a tell on the world economy, particularly with oil at a high price.
Options expiration: These have been positive for the last three months, with the occasional wild day or two going into the event. Cramer doesn't expect volatility going into Friday's expiration.
Jarden (JAH) is a niche player with a dozen different niches, a mosaic of a company with over 100 familiar brands, such as Coleman outdoor products, Rollins baseball gloves, Oster blenders and Mr. Coffee makers. A full 42% of the company's revenues are generated from outdoor products with 13% organic growth in the space. Jarden is a "brand management company" that keeps giving new life to dependable names that have been around for years.
The company is benefiting from the bull market in outdoor products, and Mr. Coffee is getting a boost from the deal between Starbucks (SBUX) and Green Mountain Coffee Roasters (GMCR), since Mr. Coffee will use the single serve coffee pods. CEO Martin Franklin said that while this is "not a material part of Jarden's business," the partnership between the two leading coffee companies will be good for Jarden.
Cramer asked how Jarden has seen an expansion in its outdoor segment with rising fuel prices. Franklin has seen a strong opening of the year for all of Jarden's outdoor brands, and the lowest inventory on ski equipment in the company's history. He added that Jarden is able to absorb higher commodity prices with gross margins rising 50 basis points.
"I feel good about Jarden," Cramer said. "So should you."
Why have medical device stocks been steaming hot? Stryker (SYK) is up 17% and Zimmer Holdings (ZMH) has risen 15% so far this year. Even St. Jude Medical (STJ), a company with a checkered record, is up 14% year over year. One reason is that hedge fund managers have to stock up with healthcare companies to mirror the S&P 500, which has 11% exposure to healthcare. However, the healthcare sector is not feeling so well, and Big Pharma is ailing. The medical device space is the one area of healthcare that seems healthy, not least because as the Baby Boomers age, the demand for pacemakers and knee replacements will increase. The FDA is quicker to approve a new medical device than it is a new drug, and Johnson & Johnson's (JNJ) many recalls and blunders leave room for other medical device companies to take share.
Cramer's pick in the space is Stryker, which has 20% market share in orthopedic implants. While Zimmer is an older company, it sells at a lower multiple of 12 compared to Stryker's 15, Stryker has a higher growth rate, 11% compared to Zimmer's 10%. Stryker, unlike Zimmer, has a surgical equipment business that has a 15.4% growth rate and is expanding through acquisitons. Cramer would not consider buying Medtronic (MDT) because of uncertainty over its replacement CEO, and while St. Jude Medical has a great analyst meeting and is offering its first dividend in 17 years, it is just one point off its 52-week high and not worth chasing.
Cramer thinks Stryker is a play in the one area of healthcare that is actually working.
While Cramer says Men's Warehouse (MW) is a good stock that reported an in-line quarter, he doesn't think it is as good as Saks (SKS), which he predicts will go quickly from $12 and change to $15. He told another viewer to buy Chesapeake Energy (CHK) rather than Exco Resources (XCO). SuperValue (SVU), one of the worst stocks of the S&P 500 last year, is not a buy. Cramer prefers Kroger (KR) and likes Whole Foods (WFMI) even better. When a viewer asked Cramer about buying futures, he said it was too risky and warned, "Don't go there."
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