Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday January 27.
Enbridge Energy Partners (EEP), Arm Holdings (ARMH), Amazon (AMZN), Whirlpool (WHR), Chipotle Mexican Grill (CMG), Tractor Supply (TSCO), Core Labs (CLB), Allergan (AGN), Cummins (CMI), Dow Chemical (DOW), American Axle (AXL), Clorox (CLX) other stocks mentioned: Kinder Morgan Partners (KMP), Intel (INTC), KLA-Tencor (KLAC), J.C. Penney (JCP), Caterpillar (CAT), Level-3 Communications (LVLT)
Cramer discussed things to watch this week:
Amazon (AMZN) has been investing money in the company, so it might report a tepid quarter. However, the company had great December sales, and if it beats the quarter, it might see an upside of 50 points.
Facebook is expected to announce that it is filing for its IPO. It can't be played, however, until investors know what the price and the terms are. Facebook deserves a rich valuation, but Cramer would wait.
Whirlpool (WHR) might report that housing is coming back, but Cramer doesn't expect great things from the quarter.
Chipotle Mexican Grill (CMG) is expected to discuss its Asian Noodle restaurants. If it reports a good quarter, the stock may rally.
Tractor Supply (TSCO) is a solid high-growth retailer. Cramer added that while on the subject of retail, investors should sell J.C. Penney (JCP) which has risen so much, the stock is getting "ahead of itself."
Core Labs (CLB) always sells off after the quarter. Cramer would use a decline as a buying opportunity.
German Manufacturing Number will confirm whether or not Caterpillar (CAT) is right that things in Europe are getting better.
Allergan (AGN) is another company that tends to sell off after a quarter. Cramer would get ready to buy on a false disappointment.
Cumins (CMI) will benefit from a truck buildout, but Cramer is worried that the good news is already baked into the stock, so it might get hit even on a strong report.
Dow Chemical (DOW) the company benefits from low natural gas prices, but it might get hurt from weakness sin Europe.
American Axle (AXL) should be a good spec with a decent quarter.
Clorox (CLX) never seems to blow away numbers, but it is a consistent dividend booster.
Employment Numbers: these are expected to show fewer layoffs.
Cramer took some calls:
Level -3 Communications (LVLT) is not doing so well. Cramer needs to see if cash flow is positive before he can recommend it.
What was the biggest problem with Ford's (F) recent earnings? Ford management should have reigned in the bulls. The company should have preannounced to the downside when it saw that the picture was going to be less than rosy, due to Thai flooding, weakness in Europe and rising commodity prices it could not pass on to the consumer. Instead, Ford went right into earnings with no warning, and it disappointed. Cramer thinks Alcoa (AA) suffers from a similar problem of not keeping the bulls in check by discussing its headwinds before it announces. As a result, estimates for both companies tend to be too high, and disappointment is inevitable. Cramer would stick to buying auto parts makers, given the 14 million cars that are expected to be produced in 2012, and not the carmakers.
UPS (UPS) tends to be a stock that sells off after it reports. Cramer wouldn't have a full position going into the quarter.
2012 doesn't appear to be a good year for Sanofi-Aventis (SNY), since three of its biggest drugs: an anti-clotting drug, a hypertension drug and a treatment for colorectal cancer, are going off patent. However, management was pro-active in trying to offset this loss by diversifying a few years ago. Now the three drugs that would have comprised 27% of revenues only account for 9% of revenues, and SNY has benefited from its expansion into vaccines, generics and animal health. SNY gained 16% in 2011, and would have seen a bigger upside if it weren't a European company. Cramer thinks Europe will be a tailwind for SNY, especially since the euro finally seems to be heading up. Emerging markets make up 30% of sales, and the company is cashing in on its Genzyme acquisition, fixing manufacturing difficulties the company faced and awaiting approval for some Genzyme drugs. Sanofi-Aventis is Cramer's favorite pharma comeback story.
Celgene (CELG) is preforming well. Cramer said he would have featured the company, but it needs to drop to $68-69 before it is a buy.
CEO Interview: T.J. Rodgers, Cypress Semiconductor (CY)
Cypress Semiconductor (CY) reported a 3 cent earnings beat and rising revenues, yet the stock lost 10% in 24 hours. What was the reason? CEO T.J Rodgers admitted that a chip for cell phones was going to be released later than expected, and the company would see a delay in profits from this chip. As a result, guidance was soft for the first quarter of 2012, and the stock sold off. However, Rodgers expects rising sales in the second half of 2012, and is going to buy back stock. CY has returned 325% for investors since Cramer got behind it in 2008. Rodgers is confident that the new chip will take market share and e-readers will be a big business for CY going forward. Cramer thinks Rodgers is wise to use the lull in the first part of 2012 to buy back CY stock, and Cramer suggests that investors "buy right along with him."
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