Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday October 14.
22 Earnings to Watch: Citigroup (NYSE:C), First Horizon (NYSE:FHN), Wells Fargo (NYSE:WFC), Halliburton (NYSE:HAL), Bank of America (NYSE:BAC), Coca-Cola (NYSE:KO), EMC (NYSE:EMC), Apple (NASDAQ:AAPL), Morgan Stanley (NYSE:MS), PNC Financial (NYSE:PNC), U.S. Bancorp (NYSE:USB), United Technologies (NYSE:UTX), American Express (NYSE:AXP), Nucor (NYSE:NUE), Philip Morris (NYSE:PM), PPG Industries (NYSE:PPG), Union Pacific (NYSE:UNP), Chipotle Mexican Grill (NYSE:CMG), Microsoft (NASDAQ:MSFT), Honeywell (NYSE:HON), Verizon (NYSE:VZ), Schlumberger (NYSE:SLB). Other stocks mentioned: iShares Silver Trust ETF (NYSEARCA:SLV), Goldcorp (NYSE:GG), Randgold (NASDAQ:GOLD), ITT (NYSE:ITT)
The coming week is full of important earnings that could determine the mood of the entire quarter; "Four times we get this lineup," said Cramer, "and four times it determines how the year goes." News from Europe, however, might affect stocks regardless of how companies report, but Cramer says the European leaders' willingness to hammer out reforms is a good sign. He would watch how the euro acts against the dollar. Cramer discussed upcoming earnings:
Citigroup (C) is one of the worst-performing banks, given slowness in emerging markets and the bad loans on its books. Cramer does not expect good news.
First Horizon (FHN) is pretty well-run, with little government intervention and no international exposure. This report should set the tone for regional banks.
Wells Fargo (WFC) is a well-run bank that has been punished. "I think they are going to have a great quarter," said Cramer, but he added that there is no resolution to the housing woes, so the upside might be limited.
Halliburton (HAL) is a strong oil service giant that might set the tone for the rest of the oil sector. Since the stock and oil ran up on Friday, Halliburton could see a sell-off even if it reports good news.
Bank of America (BAC) is the most hobbled of all banks outside of Europe; "This is the worst investment my charitable trust has ever made," confessed Cramer.
Coca Cola (KO) should benefit from declining raw costs and robust sales. The stock carries with it a solid dividend.
EMC (EMC) the cheapest growth tech stock and a play on big data. It is well down from its high and is worth buying.
Apple (AAPL) could break to new highs, even after the passing of Steve Jobs; "one of my favorite stocks of all time."
Morgan Stanley (MS) will reveal how hedged they are against Europe and may be "ready to play offense."
PNC Financial (PNC) has a consistently downbeat management and "it's going to stay that way."
US Bancorp (USB) is a regional to national story and is "becoming an even better bet."
United Technologies (UTX) is issuing a secondary and has a great vision. Cramer wants to recommend getting into the secondary offering.
American Express (AXP) is the one financial that is practically immune to Washington. Look for revenue growth.
Nucor (NUE) has a CEO that is consistently downbeat, but the long-term story is good.
Philip Morris (PM) has terrific overseas growth and a generous dividend.
PPG's (PPG) CEO Chuck Bunch has given a "flawless" performance.
Union Pacific (UNP) rails have been out of favor, but if the stock sells off after earnings, it is worth snapping some up.
Chipotle Mexican Grill (CMG) will talk about its new Asian noodle restaurant and the decline in commodity costs. This stock has sold off hard, and Cramer thinks it may be ready to run again.
Microsoft (MSFT) is fighting for relevance, but the Skype deal might provide a tailwind.
Honeywell (HON) is a core long industrial and a great anchor for any portfolio.
Schlumberger (SLB) is a buy into the quarter if Halliburton and other oils get knocked down earlier in the week.
Verizon (VZ) will talk about iPhone demand and could see a second wave of buying.
Cramer took some calls:
ITT (ITT): "It's too low...you've got a winner."
A Catalyst For Adobe (NASDAQ:ADBE)
Adobe (ADBE) is a stock rising from the grave after it lost a head-to-head battle against Apple over flash technology on the iPhone. While Adobe sells for a low multiple of 10 compared to its 12% growth rate, for a long time, the stock has had no catalyst to move it upward. Now that catalyst is HTML 5, a new generation of the familiar programming language which will change the way users write web applications and embed videos. While HTML 5 has been around since 2008, Adobe will make it easier to use and is expected to be a first player in this space with its web development tools. While the stock rose 6% on this news, Cramer doesn't expect the company to benefit from HTML 5 in the very near term, but 2012 should be a good year for Adobe. This company is one tech that is not allowing itself to be left behind or to become obsolete, but is constantly innovating to stay ahead.
What Ingersoll-Rand (NYSE:IR) Management Needs To Say
On Thursday, Ingersoll-Rand (IR), one of the most beaten down industrial stocks, reports. The stock has been a serial disappointer, but it does have untapped potential and could be a turnaround story. Michael Lamach took over as CEO 18 months ago, but there has been little progress in restructuring. Whether or not the stock is a buy on its decline will be largely determined by what management says on its conference call. Cramer outlined what investors need to hear from IR's management.
Management needs to own up to its mistakes and failure to implement changes so far, lower the bar so it can more easily beat its targets and make a commitment to carry out price cutting and restructuring. Management needs to give investors hope that there could be a turnaround in at least some of its divisions, and the CEO needs to predict the stock will rise from $30 to $34, its level when he took over 18 months ago.
Ingersoll-Rand has the potential to recover, but investors need to hear management say the right things before its stock is worth buying.
Mad Mail: Piedmont Office Realty Trust (NYSE:PDM), Express Scripts (NASDAQ:ESRX), PPG (PPG), Polypore (NYSE:PPO), Enterprise Product Partners (NYSE:EPD), Johnson Controls (NYSE:JCI)
Piedmont Office Realty Trust (PDM) is one of the largest REITS and has a 7.6% dividend, which Cramer thinks is a red flag, since the company has indicated it is likely to cut the yield. Cramer recommends Enterprise Product Partners (EPD), which just boosted its dividend, instead of PDM.
Express Scripts (ESRX) has come down too much and is a buy.
PPG Industries (PPG) is not a stock to be sold, because it has been hammered too much. Polypore (PPO) is good, but Cramer likes what Johnson Controls (JCI) said on its analyst day, and prefers it to PPO.
Occupy Wall Street?
Cramer says he could get behind the Occupy Wall Street crowd if they made more tangible complaints about the bad loans banks issued, the questionable behavior of rating agencies, corrupt practices and lack of oversight. However, at least as much blame can be laid at the feet of Congress for not enacting legislation to stop these practices. Why aren't citizens protesting Washington's ineffectiveness at creating jobs, for instance? Instead, the protest seems to have a simplistic "The Rich Are Bad" rallying cry instead of addressing specific issues. "I can't join them, but who can blame them?" Cramer said.
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