Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday February 2.
The Facebook IPO (expected to trade with the ticker FB) has two faces: First, the deal. Second, the valuation. However, Cramer would look only at the first face right now, which is getting in on the IPO of a company with 848 million users. There are going to be more potential buyers than shares, and the stock getting bid up aftermarket is a foregone conclusion. Therefore, investors need to get in on the Facebook IPO if they can, regardless of the price. Cramer thinks the stock could double right after it opens. How do we know if the valuation will be too rich? That is an issue for after the IPO. If Facebook doubles, profits should be taken, if it doesn't quite double, it might be worth holding. The main concern is to get in on the IPO; "You have to get in to win."
Cramer took a call:
LinkedIn (LNKD) is an international business with strong revenues. LNKD could make a lot of money, however, Cramer is not recommending buying the stock.
Healthy eating is a big theme, especially with two-thirds of Americans overweight and one-third obese. Hain Celestial (HAIN) has been a pioneer in bringing healthy brands to supermarkets. While other food companies complain about declines in baby food consumption, Hain saw a 23% rise in its Earth's Best baby food sales, a 7% increase in soup and tea sales; competitors claim customers are not drinking tea or eating soup because the weather has been unseasonably mild. CEO Irwin Simon thinks the real reason is customers are switching permanently to Hain's healthy brands. The company has been asked to manage organic sections in supermarkets, and 2,200 Hain products are seen in Whole Foods (WFM). The company has designed a healthy eating Superbowl section with organic chips, carrot chips and organic chicken wings. Greek Gods yogurt is not just a fad, but is making 15 million sales the last quarter alone and is ready to be launched in the U.K. The company reported a strong quarter, with a 32% rise in revenues. The stock has gained 33% since August, and 427% since Cramer got behind it in 2010. "It's at an all-time high," Cramer said. "Hain reported an unbelievable quarter, and it's not done."
CEO Interview: Jack Hartung, Chipotle Mexican Grill (CMG)
Even the best momentum stocks don't go up in a straight line, and it seems CMG has hit a minor bump in the road. After running up substantially ahead of its quarter, CMG fell 2% on a 2 cent earnings miss, but revenues were up 23%, exceeding expectations, and same store sales rose 11%. The company raised guidance for same store sales and is putting up new restaurants. Its Asian Noodle Shop concept in Washington DC is taking off, but CEO Jack Hartung says he will grow the business slowly and gradually, "one step at a time." The "food with integrity" theme has caught on and helps build customer loyalty, as CMG provides food that is healthy and delicious. The average Chipotle restaurant now produces $2 million in sales. The stock has seen a 650% gain since Cramer got behind it 3 years ago, and CMG is a buy on the current pullback.
CEO David Pyott, Allergan (AGN)
Allergan (AGN) fell 3% after its earnings with in-line earnings and revenues. The stock fell on concern about its conservative guidance and Botox sales. Allergan almost always sells off after a quarter, even if it is a successful one. CEO David Pyott explained that the Botox business is strong for migraine treatment, and he is expecting approval later in the year for its use as a treatment for incontinence. The cause of the weakness was Europe, with its government-mandated price reductions. AGN's new product, Volumina, which fills out the area under the cheekbones, has seen success in Europe and Canada, and AGN expects FDA approval for Volumina in 2012. Allergan will continue to increase its spending on Research and Development, an investment which has paid off for Allergan. Cramer is bullish on Allergan.
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