Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday March 18.
12 Market-Moving Events for the Coming Week: Tiffany (TIF), Dollar General (DG), Walgreen (WAG), General Mills (GIS), Paychex (PAYX), Conoco-Phillips (COP), Best Buy (BBY), Finish Line (FINL), Oracle (ORCL), Research in Motion (RIMM). Other stocks mentioned: Verizon (VZ), Sprint (S), AT&T (T), Nike (NKE)
Cramer discussed earnings reports, analyst meeting and events to watch in the coming week.
Tiffany's (TIF) conference call should give a reading on how companies with significant exposure to Japan are faring and whether they see the problem as long- or short-term.
Dollar General (DG) should indicate in their earnings report whether the price of gas is driving consumers to shop at cheaper stores.
Walgreen (WAG) has risen 20% since October in its latest turnaround. In its earnings report, WAG should discuss taking market share from the competition.
CTIA Wireless Conference will be the location for Tuesday's Mad Money broadcast. Cramer will ask representatives from Verizon (VZ), AT&T (T), Sprint (S) and smaller players if the industry is really stalled.
General Mills (GIS) should discuss higher food prices and rising raw costs. Can this company with fantastic management navigate its way through rising expenses?
Paychex (PAYX) is a great tell on the employment situation. Those listening to the conference call should pay special attention to its crucial metric; the number of employees per Paychex customer.
Conoco-Phillips' (COP) analyst meetings always provide substantial information for those who want to know about the future of oil. COP is one of the most honest players in the game, and Cramer expects to hear good news from them.
Best Buy (BBY) is probably not going to report good news. Cramer confesses he has given up on the company.
Research in Motion (RIMM) is not worth buying ahead of the quarter. Cramer says he is a seller of tech and RIMM is no exception.
Oracle (ORCL) is perhaps an exception to Cramer's bearish feeling on tech. He would consider buying Oracle ahead of its quarter, since it is a low-multiple tech and tends to pop up after its earnings.
Michigan Consumer Survey may be a deciding factor on whether it is worthwhile to buy retail stocks.
Heartware International (HTWR)
Speculation might seem dangerous in such a volatile environment, but it may be the only way to trade stocks that are not levered to news in the Middle East or Japan. Cramer dedicated Friday's Mad Money program to discussing medical device plays. Healthcare comprises 11% of the S&P 500, and yet big Pharma has been a huge disappointment. Medical device companies have several advantages over drug makers, since they do not have to worry about generics, and the FDA is usually more ready to approve a new device than a new drug. While the President is often at odds with drug companies, he favors medical device makers, which are seeing approval for their products at a good clip.
Heartware International (HTWR) produces devices for patients with late-stage heart failure. These ventricular assist devices help keep patients alive while they are waiting for heart transplants. Heartware's device was approved in Europe in 2009 and is awaiting FDA approval for its device which is smaller, doesn't require cracking the sternum, has fewer complications and gives patients a quicker recovery rate. In a study of 100 patients, survival rates for Heartware's device was 90% compared to the 70% rate for similar devices. Heartware could capture 50% of the market and is expected to have a 25% annual growth rate.
With obesity fast becoming an epidemic in the United States, it is estimated that, in another 13 years, a third of all Americans may have diabetes. Unfortunately this creates a huge market for diabetes device makers. Cramer confesses he landed in hot water in the past for speculating on diabetes drugs, but devices are quicker to receive FDA approval and aren't vulnerable to generics.
Cramer's two plays in the diabetes device space are Dexcom (DXCM) and Insulet Corporation (PODD), whose combined devices can revolutionize the way the disease is treated. DXCM produces a continuous glucose monitor and Insulet makes a tubing free insulin pump that make it easier for diabetes to monitor their insulin levels and treat their conditions. Both devices could work almost as an artificial pancreas and both devices are expected to receive FDA approval.
DXCM's stock is down 17% from its high, but Insulet's stock is close to its 52 week high. Dexcom's device has seen 100% growth since its launch in 2007 and creates an alarm when insulin levels are low. It can be placed anywhere on the body. This device could give DXCM a shot at being profitable and may be used for Type 2 as well as Type 1 diabetes.
Insulet's OmniPod is a self-regulating insulin delivery system that is expected to be approved by the FDA by the end of the year. It is a third smaller and costs less to make than similar devices. Sales could grow at an 85% rate and could make Insulet profitable by 2013. Both stocks are great ways to play the war against diabetes.
With baby boomers greying, demand for orthopedic devices is increasing at a steady pace. Tornier specializes in extremities and joint replacement devices, which is the fastest-growing segment in the orthopedic space. The company has 20% of the shoulder replacement market and its business is growing by 80%. Tornier is expected to release 19 new products in 2011 and expand its overseas business into emerging market countries. While the company has yet to break even, it is expected to turn a profit by 2012, and investors should get into the stock early, especially with analysts initiating coverage of the stock. The stock is undervalued; according to a Wells Fargo analyst, all of Tornier's segments taken together would make the company worth 37% more than its current valuations.
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