Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday September 9.
6 Things to Watch in the Coming Week: Best Buy (BBY), Cummins (CMI), Research In Motion (RIMM), UPS (UPS), Pier One Imports (PIR). Other stocks mentioned: Coca-Cola (KO), Kimberly Clark (KMB), Johnson & Johnson (JNJ), Colgate (CL), Apple (AAPL)
With a decline in the Dow of 304 points, the one word to keep in mind is "correlation." Stocks are correlated with the S&P 500, and the S&P is correlated to European woes. The bright spot is that 25% of stocks are going down unfairly. Defensive stocks like Coca-Cola (KO), Kimberly Clark (KMB), Johnson & Johnson (JNJ) and Colgate (CL) may see a bounce on continued weakness, as will high-yielding stocks and utilities.
Cramer would keep an eye on the following events in the coming week:
Best Buy (BBY) reports earnings. This stock has been a tell on the consumer, and since it is a "supermarket of gadgets" and not a real supermarket, it might get hit as the consumer holds off spending. The consumer might be spending elsewhere, especially online, and not at Best Buy. Cramer thinks the company needs a coherent game plan.
Cummins (CMI) has an analyst meeting. Cramer thinks the news from the company will be good, since this is a best-of-breed industrial.
Deutsche Bank's Technology Conference will give an indication if tech is indeed going to bounce back as it often does in September. However, recession worries might affect the sector.
UPS (UPS) has an analyst meeting. The company is also a strong tell on the health of the consumer.
Pier One Imports (PIR) reports. It is up an astounding 7,000% since the last recession, and might be a good speculative play on the current economic woes.
Research In Motion (RIMM) also needs a game plan, since Apple (AAPL) has been trouncing the company with its iPhone.
In times of uncertainty, it is useful to find a speculative stock on a strong trend. Lufkin (LUFK) makes specialty oil pumps used in the Bakken. These "nodding donkey" pumps are in demand for new and existing wells built in the region. The stock is down 34 points in the past few months and is now trading at a multiple of 12 with a 14% growth rate. Analysts expect 90% earnings growth in the next year from pent-up demand. Lufkin is grabbing market share and has made some smart acquisitions. The company could be an attractive takeover target. Lufkin disappointed on earnings in July, missing estimates by 7 cents, but many of these problems were due to natural disasters like floods and wildfires. Bookings remain strong, up 54% from last year. Cramer thinks it is a buy, especially since it has pulled back.
CEO Interview: Jensen Wong, Nvidia (NVDA)
The season to buy tech is upon us, as weaker tech names are finally coming back. Nvidia (NVDA) is expanding its mobile computing sector and has substantial market share for non Apple-based tablets. Nvidia's graphics are everywhere, from autos to video games. China is providing Nvidia with its fastest growth, given the popularity of PCs and video games in the country. The success of Android has also been good news for Nvidia. Cramer thinks the success of Nvidia's patents alone could be worth the whole company.
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