Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday January 6.
9 Things To Watch In The Coming Week: Alcoa (NYSE:AA), Regeneron (NASDAQ:REGN), Celgene (NASDAQ:CELG), Bristol-Myers (NYSE:BMY), Sanofi-Aventis (NYSE:SNY), Ford (NYSE:F), GM (NYSE:GM), Lennar (NYSE:LEN), Ross Stores (NASDAQ:ROST), TJX (NYSE:TJX), Macy's (NYSE:M), Domino's Pizza (NYSE:DPZ), JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), U.S. Bancorp (NYSE:USB), Barnes & Noble (NYSE:BKS).
Alcoa (AA) won't produce good earnings, since it announced a 12% cut in production. Even if management sounds upbeat, analysts are looking for higher numbers than Alcoa can deliver. Cramer predicts estimate cuts for AA, and this will mean bad news for industrials.
JPMorgan Global Health Conference: Regeneron (REGN) has run up ahead of this conference. Cramer thinks Celgene (CELG) will give terrific news. Picks in this sector are Bristol-Myers (BMY) and Sanofi-Aventis (SNY), which has been performing slowly only because of the weak euro.
French Industrial Production Numbers: If these are poor, not only France, but global industrials may suffer. However, negativity from this report might be offset by a possible rate cut by the Chinese early in the week.
Lennar (LEN): If this company reports strong earnings, it could lift the other homebuilders.
Italian and Spanish bond auctions: Another indication of the situation in Europe.
U.S. December Retail Sales Number: Individual retailers like Macy's (M), Ross Stores (ROST) and TJX (TJX) have been smoking, but the aggregate retail sales number has not been strong. If the number on Thursday is weak, Cramer would buy some quality retailers.
Domino's Pizza (DPZ) has doubled over the past year on the company's improved recipes and internet orders. Cramer expects strong results.
Cramer took some calls.
Barnes & Noble (BKS) has been hammered because it missed its quarter. The stock is in secular decline and it is not too late to sell.
Boeing (BA) is Cramer's top Dow stock because of the new aerospace cycle, which should keep the company performing for years. While there was disappointment over delays in the release of the Dreamliner, now that the plane has been released, the stock is up 25%, and that is only the beginning: In 1982 when Boeing released its 757 new model, the stock soared 239% over three years. Boeing has seen a 10.8% gain for 2011 (13% counting reinvested dividends), and is a "bargain," with a multiple of 14.8% compared to its 13.4% growth rate. The company has a $250 billion backlog and is ramping up production in 5 different models by 50%. While Airbus has taken market share, the next model for Airbus won't be released until 2015, so Boeing, courtesy of the Dreamliner, will most likely take back significant market share from its only major competitor. The company raised its dividend by 5% in December to 2.4%, and with increases in cash flow, the yield should go higher. While there is concern about its defense segment amid threats of defense spending cuts, Boeing should weather the storm, as it has through past defense budget cuts. Boeing has the advantage of having an international, rather than purely domestic, defense segment.
Cramer took some calls.
Lockheed Martin (LM) has no catalysts and may be a flatliner
Cramer explained why he doesn't recommend airlines; simply put, airlines have no earnings.
After a week of finding the star stock of the S&P 500 and the Nasdaq, Cramer squared off Alexion (ALXN), which outshone other stocks in the Nasdaq, and Cabot Oil & Gas (COG), the star of the S&P 500. Both stocks has good PEG ratios (the comparison of price/earnings ratios with the growth rate), with Cabot at 0.9 and Alexion at 1.7. Both stocks are takeover targets and have have strong catalysts: Cabot can drill new wells and Alexion's drug may be approved for multiple indications. Neither stock offers a strong dividend. It seems that ALXN and COG are tied.
Cramer added three new criteria for judging the stocks: The charts, management and geopolitical risk. Alexion's chart shows an uptrend that might be temporarily interrupted if the stock trades sideways for a while, but it seems that if this would happen, Alexion would just be taking a breather before trading higher. COG's chart is strong, but shows more volatility. Both stocks have excellent CEOs at the helm who have increased value for the company. The main factor that makes Alexion the victor is in the area of geopolitical risk. Alexion is a defensive stock with few revenues from Europe, and is not hurt by a strong dollar. COG, on the other hand, might face hostility from the Obama administration with its dislike of fossil fuels and position against hydraulic fracing. A nasty recession in Europe and a rising dollar could create major problems for COG. Therefore, Alexion emerges as the champion.
Mad Mail: Infospace (INSP), Newcastle Investment (NCT), Micron (NASDAQ:MU), Magnachip Semiconductor (NYSE:MX), Oneok Partners (NYSE:OKS), Chesapeake Energy (NYSE:CHK), Microsoft (NASDAQ:MSFT), Costco (NASDAQ:COST).
InfoSpace (INSP) strong growth and an interesting takeover target, but the stock has surged from $8-11, and Cramer would wait for it to come down before buying, especially since it has had an accounting irregularity.
Newcastle Investment (NCT) has a 12.6% dividend, but is down 85% in the last 5 years. Cramer prefers Annaly Capital (NYSE:NLY).
Infospace (INSP) strong growth and interesting takeover target surged up from 8-11..it has to come down more was an accounting irregularity
Oneok Partners (OKS) is a good company with a solid situation.
Chesapeake Energy (CHK) investors are worried about the debt load and the funding gap. The company is making the transition from oil to natural gas, and might have a tough road short-term.
Microsoft (MSFT) is inexpensive, but Cramer needs to find a catalyst.
Costco (COST) has been going down consistently since it reported. Cramer would wait to buy it when it dips below $80.
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