Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday June 24.
10 Things to Watch Next Week: Nike (NYSE:NKE), Shaw (NYSE:SHAW), Family Dollar (NYSE:FDO), General Mills (NYSE:GIS), KBHome (NYSE:KBH), Monsanto (NYSE:MON), Schnitzer Steel Industries (NASDAQ:SCHN), Darden (NYSE:DRI), HomeAway (expected symbol: AWAY). Other stocks mentioned: Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Finish Line (NASDAQ:FINL), Dupont (NYSE:DD), Lennar (NYSE:LEN)
Cramer outlined 10 things to watch in the coming week:
Nike (NKE) reports. Its last quarter was terrible, and the stock dropped, but shares have rebounded since then. Slow advance orders and weak gross margins were responsible for the poor quarter. While Finish Line (FINL), which generates 60% of its sales from Nike, reported strong same store sales and is up 14%, Cramer is still concerned about the issue with Nike's gross margins.
Nike's Investor Day might redeem the stock if it gets hit after Monday's earnings. Cramer would wait and see what Nike's earnings are like and might consider buying the stock ahead of its investor day if shares decline substantially.
Shaw Group (SHAW) will give the new world view on nuclear power after the disaster in Japan. Cramer also wants to hear what Shaw says about oil and natural gas.
Family Dollar (FDO) has been aggressively remodeling its stores and is taking share from Wal-Mart (WMT) and Target (TGT). The company might get a bid to be taken private. Cramer would buy the stock on a decline.
General Mills (GIS) possibly has the most important earnings call next week, since the company is an important tell on the effect of commodity prices on food companies.
Schnitzer Steel (SCHN) may say that scrap exports to China are weaker, but this might be good news, because it might indicate the Chinese Central Bank might stop raising interest rates.
Darden Restaurant (DRI) is one of the best tells on the effect of rising gas prices on the consumer. In the last quarter, Darden indicated that gas prices had affected business. Cramer wants to see if the story is the same.
IPO: HomeAway (expected ticker: AWAY) is the largest online marketplace for vacation rentals. This is a social media stock with a practical business that can make money, although the company has yet to make a profit. Cramer would get in on the deal, but would not buy following its IPO.
IBM recently celebrated its 100th anniversary by unveiling an ambitious 5 year plan. The company aims to dramatically increase cash flow, grow at a rate of 11% annually, buy back $50 billion worth of stock and to grow earnings by 71%. Sales in emerging markets are expected to rise from 20% to 30%, and IBM's proprietary analytics business should generate $16 billion in sales in the next five years. Cramer thinks IBM will achieve its goals because it is diversifying away from the PC sector and is focused on creating solutions for businesses. The stock has risen 26% since it unveiled its 5 year plan in October, and at the time it was announced, Cramer believed in the company. IBM trades at a multple of 11.3 with an 11% growth rate. Although Cramer has been bearish on tech, IBM is a notable exception, and should be bought.
Pacific BioSciences (NASDAQ:PACB)
Cramer discussed Pacific BioSciences (PACB) which is in the sweet spot of DNA sequencing. The company is producing third generation DNA sequencing technology. The company came public in 2010, and while the DNA sequencing business is small, at $1.2 billion, it is growing at an annual rate of 20-25%. PACB's technology can determine whether users are prone to certain genetic diseases, and the company's technology has made analysis cheaper and faster. In a few years, a customer can have his entire genetic makeup analyzed for only $2,000. PACB doesn't have profits yet, but is expected to be profitable by 2014. The technology can be used in agriculture and forensics as well as for the healthcare sector. Cramer thinks PACB is "hot," but he would be careful in case the company fails to become profitable or if a competitor develops similar technology.
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