Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday November 3.
While Mad Money usually is focused on analyzing the fundamentals of stocks, sometimes it is a good idea to take a look at the technicals. Wynn (WYNN), according to technical analyst Dan Fitzpatrick of The Street.com, is a former winner that has seen better days. The stock has seen an 850% gain since Cramer got behind it in 2009 and issued a $5 special dividend. The stock was trading above its 40 day moving average until August when it fell below that line and didn't recover. The selling volume was high, and Wynn broke down below support, to fall beneath its 40 week moving average. The increasing selling volume is a sign that institutional investors have been dumping the stock. Worse yet, Wynn's 50 day moving average crossed below the 200 day moving average, which is an indication of short-term bearishness and signals a top. Cramer, however, doesn't think Wynn is a sell, because management indicated that things look bright in Macau and the $5 special dividend is a sign that the company is performing well, on a fundamental basis.
Cisco (CSCO) has been a loser, but Cramer agrees with Fitzpatrick that it is headed higher. The stock bottomed at $13.50 and broke above the 40 week moving average with high volume buying. When the stock sold off after its earnings in August, the stock rebounded and gapped up only to trade sideways for a time. However, Cisco eventually broke through its ceiling at $16.50, and when the 50 day moving average crossed the 200 day moving average, it was clear the stock would go higher. Fitzpatrick thinks Cisco could reach $20-$21, and given that seasonality is working in tech's favor, Cramer would be a buyer of Cisco.
Qualcomm (NASDAQ:QCOM), EOG Resources (NYSE:EOG), PPG Industries (NYSE:PPG), IBM (NYSE:IBM), Alcoa (NYSE:AA), Annaly Capital (NYSE:NLY), Duke Energy (NYSE:DUK), ConEdison (NYSE:ED), Chesapeake Energy (NYSE:CHK), Cummins (NYSE:CMI)
The action on Thursday demonstrated what happens to U.S. stocks on any good news from Europe; the Dow jumped 208 points on news of European interest rate cuts. Good news from companies like EOG Resources (EOG) and Qualcomm (QCOM) can move their stocks, but IBM (IBM), Cummins (CMI) and PPG (PPG) actually went down or stayed flat following their earnings reports, which were amid worries about Europe. However, the stocks rallied on Thursday on positive headlines about the continent. Alcoa (AA), which gave a very disappointing earnings report at the beginning of earnings season, has snapped back to its level following earnings, even without additional good news about fundamentals. Chesapeake's (CHK) stock rose following a bullish report, but Cramer commented that there is nothing keeping the stock from falling down again if there is a renewal of worry over Europe.
Cramer took some calls:
Annaly Capital (NLY) is going to make money on the mortgage market, "Don't abandon the stock."
Kellogg (NYSE:K), General Mills (NYSE:GIS), Baker Hughes (NYSE:BHI), Core Labs (NYSE:CLB), Avon (NYSE:AVP), Herbalife (NYSE:HLF), Estee Lauder (NYSE:EL), Penn Virginia Resource Partners (NYSE:PVR), Natural Resource Partners (NYSE:NRP), Ford (NYSE:F), General Motors (NYSE:GM), Priceline.com (NASDAQ:PCLN), Transocean (NYSE:RIG), Ensco (NYSE:ESV)
When companies in the same industry report dramatically different results, it becomes clear which ones are executing successfully and which are not. Kellogg (K) reported a miserable quarter, and the stock declined 4 points. However, General Mills (GIS) is navigating its way through the same issues, such as rising raw costs and competition from generic, private label brands, and GIS reported a blowout quarter. Transocean (RIG) fell 7 points after its earnings, when it reported that it has to spend large amounts of money repairing its aging fleet. Ensco (ESV) has a young fleet and huge contracts, and is able to drill efficiently. The stock rose 4 points. Baker Hughes (BHI) takes on loads of projects, whether or not they are profitable, while Core Labs (CLB), which has risen 16 points since Cramer told viewers to buy it on post-earnings weakness, concentrates on growing profits as well as increasing its number of projects. Avon (AVP) blew its quarter, while Herbalife (HLF), also in the direct-selling space, reported a spectacular quarter. Lest anyone think the blame lies with the cosmetic business, Estee Lauder (EL) rallied a huge $18 following its monster quarter. When comparing the performance of companies, it becomes obvious which is best-of-breed and which companies are laggards.
Cramer took some calls:
Ford (F) was rising steadily following the recession, but has hit a wall with rising raw costs and problems in Europe with fears of a worldwide slowdown. General Motors' (GM) stock has not been performing well, either.
Priceline (PCLN) has a great business model and is a winning stock.
CEO Interview: Michael Gross, Solar Capital (NASDAQ:SLRC)
Solar Capital (SLRC) is a stock that got unfairly knocked down, and while Cramer doesn't like financials in general right now, it is a secure domestic financial, insulated against the shocks in Europe. What sent down the stock is a decrease in its book value, which CEO Michael Gross explained as the result of the company having to place a fair value on SLRC's entire portfolio every quarter. The day this occurred, Sept 30, was a general down day, and as a result, the company is undervalued. Gross reported that 100% of SLRC's loans are performing, thanks to the high quality of its loans the company develops through extensive research. Insider buying is aggressive, comprising 6% of SLRC's shares. "I can't find an 11.5% yield anywhere else that I like," Michael Gross told Cramer, and assured that the dividend is safe. Cramer is bullish on SLRC.
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