Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday June 21.
The rally on Tuesday is no reason to become euphoric. WSB technical analyst John Roche is bearish on the market, and Cramer looked to the S&P 500 chart to demonstrate why we should "forget about" the recent rally as an indicator of an upward trend. The S&P 500's floor is $12.50, but Roche doesn't think this floor is very solid, since the index can't seem to bounce off of it very easily when it declines. Roche sees the index breaking through the floor down to $12.20, a level at which Cramer would not recommend being in stocks. The new high list is getting smaller, from 200 in early May to just 26. The new lows are increasing from 20 in May to 72. "I think it is a little scary," said Cramer and added it is almost impossible to make any significant amount of money on the long side when new highs are deteriorating and new lows are decreasing. "This is a tough market and we are not out of the woods."
Cramer took some calls:
When given the choice to buy Procter & Gamble (PG) or Heinz (HNZ), Cramer would buy PG because it is cheaper than HNZ.
American Airlines (AMR); "You are never going to get me to recommend an airline...sell, sell, sell."
Pier One Imports (PIR) had a thing of beauty quarter and is a buy, buy, buy. Cramer likes the company's buybacks.
CEO Interview: Allen Shortall, Unilife (NASDAQ:UNIS)
Unilife is a small cap speculative play on safety syringes. Although the stock is down 24% since last year, the company has a revolutionary syringe that will eliminate the need for additional safety devices. Unilife has no earnings yet, but is in the process of transitioning from a research and development outfit to a full-fledged manufacturer. CEO Allen Shortall told Cramer the company has delivered on every milestone in its product program. Its newest syringe was completed six months ahead of schedule and the company is currently attracting clients. Shortall expects revenue to ramp up in 2012. He showed Cramer Unilife's pre-filled syringe which, unlike other pre-filled syringes, does not require an additional safety device. The result is a 75% saving in packaging, storage and transportation with this game changing syringe over regular syringes. Shortall has also bought a significant amount of stock and there is substantial insider buying in general.
Cramer commented, "It is a small-cap stock that has a lot going for it...you guys are long-term...use limit orders if you like what he said, but it is a small-cap. Please be careful."
3M's (NYSE:MMM) 5 Year Plan
Continuing his coverage of companies that have adopted 5 Year Plans, Cramer discussed 3M (MMM). This company is not just a purveyor of Scotch tape and Post it Notes, but has become an industrial conglomerate with exposure to healthcare, transportation, safety and other sectors. The company gets 65% of its revenues from overseas
CEO George Buckley outlined the following goals to achieve by 2015: 7-8% annual organic revenue growth (up from 4%), Chinese sales up 15-20%, Brazilian sales from $900 million to $2.3 billion, market share growth in emerging markets between 40-60%. Cramer thinks 3M can achieve these goals because they are the top player in their markets and can afford to raise prices without losing customers. The company has a clean balance sheet, and 2.4% dividend which it has consistently raised. Its multiple is 13 with a 12% growth rate; "It is a buy on weakness," said Cramer. "You can afford to be patient."
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