Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday May 13.
Deckers (NYSE:DECK), Fossil (NASDAQ:FOSL), Tiffany (NYSE:TIF), Coach (NYSE:COH), Under Armour (NYSE:UA), Lululemon (NASDAQ:LULU)
Nothing is better than a misunderstood stock that represents a buying opportunity. Fossil (FOSL) was knocked down 11% because the The Street didn't seem to understand that the company was investing more money to grow the business. The stock recently reported a blowout quarter and is up 41% since February. Deckers (DECK) is another profoundly misunderstood turbo-charged growth stock. It reported a 25 cent loss when The Street was looking for a 5 cent increase in earnings and a 58% rise in inventories. This might not sound attractive, but the management didn't explain the situation clearly enough. The apparent loss was really no loss in sales at all, since the company is changing its distribution to certain countries in Europe and is sending merchandise directly to retailers. Shipments were pre-booked and the sales will show up in the fall rather than now. The 58% inventory is due to the fact that Deckers' savvy management is stocking up for its rise in wholesale orders, retail store growth and rise in e-commerce. The company is forecasting 30% sales growth and is up 75% since Cramer got behind the company last June.
The company is expanding beyond its UGG boots and its sandal sales are up 17%. Deckers expects to grow its overseas business from 20% of sales to 40% in the next five years, and during the same time frame, it expects to double the size of the company. With a 16.5 multiple and a 26% growth rate, "These UGGs are made for walking higher," said Cramer.
Cramer took a few calls:
Former CEO of EQT Corporation (NYSE:EQT), Murray Gerber
Murray Gerber, former Chairman and CEO of EQT Corporation (EQT) took the natural gas challenge. He drove cross country from California to New York in a natural gas vehicle and found that he didn't run out of places to fill up with natural gas. The journey was half the price that it would have cost had he used regular diesel fuel, and he found his natural gas vehicle more user-friendly than an electric model, which needs recharging and runs on electricity, the source of which is actually coal, not exactly a clean fuel. With only 100,000 natural gas vehicles on the road, the U.S. is still behind the rest of the world in the use of natural gas, which is ironic, given that Gerber thinks estimates that the U.S. has 125 years' worth of natural gas are too low; if capacity rises to over 30%, the country could have 300 years' worth of natural gas. After having drilled about 4,000 wells without a single pollution complaint, Gerber thinks fears of fracing are greatly exaggerated.
They Are Not Going to Wipe Out Goldman Sachs (NYSE:GS)
If the Justice Department indicts Goldman Sachs (GS) for its very minor role in the financial crisis, that would be the end of the investment bank. Similar cases in the past have spelled the end of institutions and the loss of thousands of jobs, and Cramer thinks that is not what the government really wants. He believes the current ado over Goldman Sachs is "merely bad publicity and nothing more." However, he would not use the decline in Goldman Sachs' stock price as a buying opportunity, since banks will continue to be punished by the government for the foreseeable future.
10 Earnings to Watch in the Coming Week: Lowe's (NYSE:LOW), Home Depot (NYSE:HD), Urban Outfitters (NASDAQ:URBN), Saks (NYSE:SKS), Wal-Mart (NYSE:WMT), Dell (NASDAQ:DELL), SodaStream (NASDAQ:SODA), Hewlett-Packard (NYSE:HPQ), Ross Stores (NASDAQ:ROST), Salesforce.com (NYSE:CRM). Other stocks mentioned: CurrencyShares Euro Trust ETF (NYSEARCA:FXE), Teva (NYSE:TEVA), Deere (NYSE:DE),
Before discussing the Game Plan for the coming week, Cramer urged viewers to keep an eye on the CurrencyShares Euro Trust ETF (FXE); if it goes up, the market will go up, and if it lags, so will stocks.
Lowe's (LOW): Is a good barometer for housing. Cramer thinks Lowe's will do better than expected, because estimates are too low and the stock is cheap.
Urban Outfitters (URBN) is rumored to be a potential takeover, but Cramer wants to see results.
Saks (SKS) caught an upgrade from Goldman Sachs, and the company is a good tell on luxury retail.
Wal-Mart (WMT) has really not been moving and needs another dividend boost. Cramer wants to hear how the company is doing internationally, but predicts the quarter will be a wet blanket.
Home Depot (HD) should shoot the lights out of its estimates.
Dell (DELL) has made several acquisitions, and may or may not break out of its rut. Dell is a "show me" story.
SodaStream (SODA) has a great product but the company's stock is heavily shorted. Cramer would wait to hear from the company before buying.
Hewlett-Packard (HPQ) may elicit yawns and tell the same old story.
Ross Stores (ROST) is the premier consistent retailer in America and is expected to raise its forecast.
Salesforce.com (CRM) is being threatened by the shorts. Cramer would buy deep in the money calls as it runs into the quarter and to offer some common stock against the deep in the money calls. He calls this strategy "long call, short common." He suggests not selling more common than options, because he expects a good quarter.
Linkedin IPO may be good for a very quick trade, but Cramer doesn't like the company's long-term prospects.
Cramer took some calls:
Teva (TEVA) delivered an eye-opening quarter. If the stock drops to 46-47, Cramer would pull the trigger.
Deere (DE) has a habit of not performing well on its conference call. He expects the stock to sell off and then he would buy.
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.