Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday January 18.
Dana Holding Corporation (DAN)
Autos are on the move, but Cramer wouldn't buy automakers, which have too much exposure to Europe. Instead, he prefers pin action plays like Dana Holding Corporation (DAN), the leader in drive line products, transmissions and service parts. The company has rebounded from bankruptcy, has restructured, expanded into the truck space, and is now more focused on higher margin power technologies. The gross margins have expanded 300 basis points in 3 years, and the company forecast $8 billion in sales for 2012. Dana is increasing its exposure to large vehicles used in construction and has little European exposure, only 26% compared to the industry average of 40%. Dana's stock sells at a multiple of 7.6 compared to its 26% growth rate. Its multiple is low because of its recent emergence from bankruptcy, and Cramer thinks Dana's problems are behind it; "Dana is a raging buy."
52 Week High List: Donaldson (DCI), CLARCOR (CLC), Ecolab (ECL), Advance Auto Parts (AAP), AutoZone (AZO), O'Reilly Automotive (ORLY), Dollar Tree (DLTR), PetSmart (PETM), McDonald's (MCD), Starbucks (SBUX), Panera (PNRA), Yum Brands (YUM), Chipotle Mexican Grill (CMG), Visa (V), Whole Foods (WFM), Nike (NKE), Apple (AAPL), Taubman Centers (TCO), W.W. Grainger (GWW), HMS Holdings (HMSY). Other stocks mentioned: Goldman Sachs (GS), Google (GOOG), Intuitive Surgical (ISRG), Research in Motion (RIMM)
With the Dow gaining 97 points, and stocks buoyed by the strong quarter from Goldman Sachs (GS), Cramer discussed the following stocks that reached their all-time highs on Wednesday:
Donaldson (DCI), CLARCOR (CLC), Ecolab (ECL), Advance Auto Parts (AAP), AutoZone (AZO), O'Reilly Automotive (ORLY), Dollar Tree (DLTR), PetSmart (PETM), McDonald's (MCD), Starbucks (SBUX), Panera (PNRA), Yum Brands (YUM), Chipotle Mexican Grill (CMG), Visa (V), Whole Foods (WFM), Nike (NKE), Apple (AAPL), Taubman Centers (TCO), W.W. Grainger (GWW), HMS Holdings (HMSY).
Cramer took some calls:
Google (GOOG) may be dragged down on worries about European ads and downgrades. Cramer is concerned about Google's quarter because of all of the negative chatter.
Intuitive Surgical (ISRG) should report good earnings. It is a bit dicey, given its high multiple but is a "good situation."
Research in Motion (RIMM) may attract a few buyers on speculation that it might be taken over, but Cramer would not buy the stock for its fundamentals.
It may finally be time for semiconductors to shine after a tough 2011, when the cohort lagged the S&P 500 by 12%, and almost every chipmaker pre-announced to the downside prior to their earnings reports. So far in 2012, chipmakers have performed well, with Linear Technology (LLTC) rising over 3 dollars on Wednesday and Xilinx (XLNX) was also up, even after disappointing during its recent earnings. There are enough bargains in the chip space without having to bottom fish among broken companies like Micron (MU). Qualcomm (QCOM) has surged recently and is too high to buy. Broadcom (BRCM) is Qualcomm's poor cousin, with 50% of its revenues from chips it makes for mobile devices; its end markets expected to grow 15%. However, BRCM's stock was annihilated, and fell 33% in 2011 over worries about competition. Broadcom raised its 4th quarter guidance, and with 12% of the company's sales coming from Apple, the recent rise in the latter stock should be good for BRCM. Broadcom is dirt cheap, selling at a multiple of 11.7 with a 15% growth rate.
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