Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday December 2.
9 Things To Watch In The Coming Week: Dollar General (DG), AutoZone (AZO), Toll Brothers (TOL), Lowe's (LOW), Yum Brands (YUM), Parker Hannifin (PH), Costco (COST), Ferrellgas Partners (FGP), Edwards Lifesciences (EW). Other stocks mentioned: Linn Energy (LINE), Skullcandy (SKUL), Seadrill Limited (SDRL), Dollar Tree (DLTR), Home Depot (HD), Eaton (ETN), Boeing (BA), Emerson Electric (EMR), Energy Transfer Partners (ETP)
AutoZone (AZO) will blow away numbers because it has "the most aggressive buyback out there." Cramer predicts it will beat its 52-week high.
Toll Brothers (TOL) is the sole survivor play for those who think housing is an investment. It might have run too much, but is best-of-breed.
Yum Brands (YUM) has an investor meeting and is expected to discuss its restructuring plan, which may include spinning off Taco Bell. If China is starting a growth path after cutting interest rates, KFC is going to be a major beneficiary.
Parker Hannifin (PH) has an investor meeting, and if they give bullish news, Boeing (BA), Eaton (ETN) and Emerson Electric (EMR) could rally. Since Europe is crucial, optimism overseas will cause these stocks to rise.
Coscto (COST) reports earnings. This is the last quarter for CEO Jim Sinegal, "the Steve Jobs of retail," who is retiring. Cramer admits his adoration for the stock, which has hit an all-time high. COST raised fees for membership, and customers are accepting these increases. It is also seeing strong same store sales. Profit takers tend to knock this stock down after earnings, and if this happens, any decline is a buying opportunity.
Ferrelgas Partners (FGP) used to be a great MLP, but got caught in the cut-throat competition of the propane industry. Energy Transfer Partners (ETP) is a better MLP, since it got rid of its propane business.
Edwards Lifesciences (EW) has an investors day. This is a hated stock, but it has heart-saving technology, and is undervalued. The stock might see some love from investors.
Cramer urged viewers to keep track of the bond auctions in Italy and Spain. If the bonds actually fetch a good price, the euro and the S&P 500 may rally.
Cramer took some calls:
Linn Energy (LINE) is losing its CEO, but this isn't a reason to sell the stock, since the CEO made his decision clear some time ago.
Skullcandy (SKUL) was an IPO Cramer recommended trading for its first day of trading, but he says he wants to do more homework on the stock before making bullish or bearish calls on it.
Seadrill (SDRL) raised its dividend and gave an excellent explanation of why the quarter was not strong. Cramer thinks this explanation is a good indication of future performance.
Nothing Is More Consistent Than McDonald's (MCD). Other stock mentioned: Heckmann (HEK)
McDonald's (MCD) is a great stock to buy on global economic uncertainty, since "it can survive anything," including the last credit crisis in the U.S. While 35% of the company's sales come from Europe, customers on the continent are still eating out, and might go to McDonald's more often, since it is cheaper than other restaurants. Same store sales were up 16.6% in Russia, 8.8% in the U.K., 4.9% in France and 3.3% in Germany; together these countries account for 70% of MCD's European business. Domestically same store sales were up 5%, which is good, given tough comparisons, and the company recently boosted its dividend by 15% to yield 2.9%. While this isn't a high yield, MCD has raised its dividend every year for the past 35 years.
MCD is expanding in Asia, the Middle East and Africa. Same store sales in China were up 11.4%, and the company expects to have 2,000 locations in China by 2014. MCD is revamping many of its stores to include more drive-thru lanes and expanded seating, and it is adding new menu items. These revamped stores usually see same store sales increases of at least 6.6%, and 24 hour restaurants are becoming more popular. While MCD may raise prices by 3-4% to keep up with commodity costs, the food is so affordable that customers are likely to accept the modest hikes. MCD usually provides a buying opportunity sometime in its quarter after a month that sees lower same store sales than usual. Since the stock usually gets hit on this kind of news, but always recovers, Cramer would use such a decline as a buying opportunity. "It doesn't get any more consistent than this," Cramer said.
Cramer took a call:
Heckmann (HEK) is a great story and is in the water business, which is growing.
Nordic American Tanker (NAT) has been the best stock in a troubled industry, global shipping, but for a while Cramer has been suggesting avoiding the whole sector. However, Navios Maritime (NM), a stock Cramer is still bearish on, received an upgrade on the news of the Chinese cutting interest rates and possible improvements in Europe; NM rallied 14% on the upgrade. While Cramer is wary of the fact that NAT borrows money to pay its 9.6% dividend, the company has been buying rigs at low prices and might benefit from growing demand in oil, which may be hoarded on fears over Iran. While NAT has significant debt, shipping rates tend to turn on a dime, and since the rates are still a tenth of what they have been historically, Cramer doesn't think they can stay so low for much longer; "It is time to embrace Nordic American Tanker."
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