Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday November 4.
11 Earnings To Watch: Priceline (PCLN), AmeriGas Partners (APU), Fossil (FOSL), General Motors (GM), Ralph Lauren (RL), Macy's (M), Cisco (CSCO), Green Mountain Coffee Roasters (GMCR), Kohl's (KSS), Nordstrom (JWN), Disney (DIS), D.H Horton (DHI) other stocks mentioned: Starbucks (SBUX), KKR (KKR), Whiting Petroleum (WLL), EOG Resources (EOG)
Cramer discussed earnings reports to watch in the coming week:
Priceline (PCLN) is one of the few high-flyers left that hasn't been crimped. Investors need to see the company earn $1.9 billion in revenues and $9.30 a share. Management needs to say that Europeans are still traveling. The stock could get hammered if it doesn't beat the high end of estimates. Priceline is a "win or go home" situation.
AmeriGas Partners (APU) is a tell for the propane sector, which is tough and cut-throat. Cramer calls all propane plays "danger zones."
Fossil (FOSL) has a history of getting the stuffing knocked out of it after its report and then moving up again. If the stock goes below $82, The Street might conclude it is broken.
General Motors (GM) is a play on China's soft landing. Cash flows have been good, but the stock has not been so hot. It needs a strong conference call.
Ralph Lauren (RL) is a stock Cramer likes, but he would be careful. The last quarter, estimates were too low, but this time, the bar is rather high and the stock has run up. Be careful.
Cisco (CSCO) chart signals an upturn, and the company seems to have regained momentum.
Green Mountain Coffee Roasters (GMCR) needs to be aggressive in addressing its many problems; management needs to discuss the effect of the K-cup going off patent, competition, its deal with Starbucks (SBUX) and rumors about accounting irregularities. GMCR needs to be forceful about whether its margins are going higher.
Macy's (M) is a tell for the retail sector, and may determine what to do with other retail stocks.
Kohl's (KSS) has been red hot, as well as Nordstrom (JWN) which also reports Thursday. If Macy's, which reports Wednesday, behaves poorly, KSS and JWN may be "sells." Cramer might even buy put options on both stocks if Macy's goes down.
Disney (DIS) has been lukewarm, since many people think the theme parks are too expensive and the company has not produced many smash hits on the silver screen lately. However, Disney might provide a buying opportunity, since most of its disappointments have been followed by upside. "In the end, Disney is a stock for the ages."
D.R Horton (DHI) and other housing stocks are the bottom of the barrel and will continue to be until homes go up in price.
Cramer took some calls:
KKR (KKR) seems to be able to cover its yield and is better than many realize. The company has significant cash flow, and Cramer would hold on to the stock
Fusion-io (FIO) produces computer expansion cards for server flash storage and is a play on big data. The company has 32% growth and 175% revenue growth, but the stock is going through the roof. It is up 95% in a single month, and its multiple is 3 times the growth rate. Cramer would take profits and buy EMC (EMC) or VMWare (VMW)
Banner (BANR) is a small bank in Washington State, and while it is performing well, Cramer doesn't like banks. Since the stock is up 47% in just a month, he would take profits.
Kodiak Oil & Gas (KOG) is not best-of-breed. Cramer prefers EOG Resources.
For Speculation Friday, Cramer discussed Allot Communications (ALLT), representing the second wave of the mobile internet tsunami. This Israeli tech company manages data for phones and makes hardware and software that enables companies to monitor bandwidth used on phones. The technology allows carriers to charge more for more bandwidth usage. Even though 60% of sales are from Europe, Allot has seen no decline even with European woes, in fact, sales on the Continent increased 25% the last quarter. The company beat earnings estimates by 4 cents a share and grew revenues by 37%. With 5 new clients and many new orders, ALLT is staving off competition from rival Cisco. Its gross margins grew 71.7% and it has a strong cash flow at $2.54 a share. It has a high multiple of 22, which is offset by its 37% growth rate. The one problem with ALLT is that it has run up $9.55 in just one month. Cramer would put on a very small position now and buy more when the stock falls on its upcoming secondary offering. "This is a small company with super-sized growth."
Cramer took some calls:
Frontier Communications (FTR) is a wasting asset. Even though it pays a strong dividend, it doesn't have growth.
MIPS (MIPS) looked interesting, but it has not performed well. The stock could bounce in January, but Cramer would use any uptick as a selling opportunity. He doesn't trust the stock since it missed its quarter.
CEO Interview: Jeff Gardner, Windstream (WIN)
Even though Windstream (WIN) reported a disappointing quarter and fell 5.4%, Cramer thinks the stock is worth a look, given its 8.4% yield. If investors pick up Windstream now, they could double their investment in 8.5 years by reinvesting the dividend, even if the stock goes nowhere. This provider of landline, wireless and broadband services missed earnings estimates by 2 cents and reported weaker than expected revenues, but the company is in the process of shifting to more profitable businesses. It reported strength in its broadband and data center services.
"2012 will be a breakout year," declared Jeff Gardner. The decline in landlines was less for WIN than for its competitors, and WIN has been investing in expanding its enterprise business and data centers. While some are worried about capital expenditures, including an acquisition, the cost is necessary for improving the company. "There's a better year coming for Windstream," said Cramer.
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