Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday August 1.
Missed Opportunity in Gold
Gold was sent down on news that there would be a Washington deficit deal only to climb back up on Monday. Cramer confessed that he didn't tell viewers to buy on the decline, because he expected another down day. The action is a sign of the resilience of the yellow metal and that gold behaves like a currency rather than a commodity. Cramer is a buyer of gold for the long-term.
CEO Interview: Aubrey McClendon, Chesapeake Energy (NYSE:CHK)
Chesapeake Energy (CHK) announced a historic find in Easter Ohio's Utica shale, but this news was lost amid tension over the deficit dispute in Washington; CHK has risen only 1% on this story, and Cramer thinks the stock has much further to run. Chesapeake, the second largest natural gas company in the U.S. delivered a 5 cent earnings beat with a 65% rise in revenues year over year. The find in Utica might be superior even to the Eagle Ford. Chesapeake owns 1.25 million acres in the Utica shale, and the potential worth could be $50 billion, about equal to the entire worth of the company. CHK's shares have seen a 47% gain since Cramer recommended the stock in October.
CEO Aubrey McClendon called the find "transformative" with its potential for 25,000 wells. "It is one of the biggest discoveries in U.S. history," and brings America closer to ending its dependence on foreign oil. Cramer is bullish on Chesapeake Energy.
A full 30% of Americans cannot obtain credit from a bank, and 70% of Mexicans have the same problem. With unemployment in the U.S. unabated, the problem is likely to grow. Pawnshops are the main beneficiary of the trend and do not have the same default risks as banks. These companies take collateral at 50-60% of its worth and advance the money to the customer. If the loan is not repaid, the shop can keep the collateral; pawnshops actually make more money when clients are unable to repay their loans.
Cramer likes several pawnshop stocks, including Cash America (CSH) and First Cash (FCFS), but prefers the latter, since Cash America is more likely to be on the radar screen of the government. FCFS is a great play on Mexico, since it generates 52% of revenues from this country and is growing there at a 34% rate. FCFS saw its same store sales grow an astonishing 17%, and the stock trades at a multiple of 16 with a 19.5% growth rate. Cramer would buy FCFS.
Mad Mail: Fifth Street (NASDAQ:FSC), Solar Capital (NASDAQ:SLRC), Yahoo (NASDAQ:YHOO), Apple (NASDAQ:AAPL), Samsung (OTC:SSNLF), Energy Transfer Partners (NYSE:ETP)
Cramer answered questions from viewers' e-mails:
Fifth Street (FSC) has a generous 12% dividend, but is unsafe, since it has pre-announced to the downside and it may eventually earn less than its pay out. Cramer thinks the dividend will be cut, and prefers Solar Capital (SLRC), which yields 10.4%, a yield more in line with earnings than FSC's.
Yahoo (YHOO) is a stock Cramer likes for the long-term and should not be overly affected by near-term concerns.
Energy Transfer Partners (ETP) is one of the cheapest of the MLPS and should be bought.
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