Stocks discussed on the in-depth session of Jim Cramer's Mad Money Program, Friday, January 29.
Last week's progress in the markets made Cramer happy. The US markets also seemed to detach themselves from the weakness in Chinese markets along with a rise in crude oil prices which helped stabilize the otherwise volatile investor sentiment. But there's nothing to be happy about since employment numbers will be released this coming Friday. "Employment numbers trump everything else, so tread lightly, because if hiring picks up and wages rise dramatically, the bullish move we got this week could be repealed in a heartbeat," said Cramer.
With that, he discussed the game plan for the week.
Anadarko Petroleum (NYSE:APC) is due to release earnings on Monday, but the environment for them is difficult. Cramer will be watching to find out the company's view on the oil patch.
Exxon (NYSE:XOM) is due on Tuesday and Cramer loves the balance sheet of this company and thinks it should trade like a utility stock rather than an energy stock.
One of the most watched earnings on Wednesday will be from General Motors (NYSE:GM). They will give a better picture of how China is doing. Buffalo Wild Wings (NASDAQ:BWLD) will report on Wednesday too.
Yum! Brands (NYSE:YUM), which is due to spin off its Chinese assets, is worth owning before the spin-off is completed. The company reports on Wednesday.
This is the day when many oil companies will release their earnings. Conoco Phillips (NYSE:COP), Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) and Occidental (NYSE:OXY) are due to release and Cramer will be watching to learn if their dividends are safe.
Another important event is the hearing on drug pricing. Cramer advised waiting till Thursday before buying biotech stocks.
Non-farm payroll reports on Friday and if it's strong, the Fed will accelerate the rates. This is a classic "good news is bad news situation."
Aerospace stocks were strong some time back until Boeing (NYSE:BA) reported a good quarter but gave weak guidance. This led investors to believe that the entire sector has peaked. On the other hand, Honeywell (NYSE:HON) and United Technologies (NYSE:UTX) gave positive outlook for their aerospace divisions. Alcoa (NYSE:AA) also had a strong pick up in aerospace business. So what is going on with the sector?
When it comes to Boeing, the company is losing business due to the strong dollar and to its competitor Airbus (OTCPK:EADSY) which does business in euros, thereby having an inherent advantage. An airplane priced in euros is cheaper than that priced in US Dollars.
CEO Dennis Muilenburg has just taken over the new job and it wouldn't be shocking if the company lowered guidance so he can deliver. Cramer wouldn't mind recommending Boeing if the Fed delays its plan for rate hikes.
Bottom line, "even if Boeing is having a hard time because Airbus has an unfair currency advantage, it's very clear that the aerospace industry in general is doing just fine," said Cramer. Boeing is still great with 3.6% yield, strong buyback and PE multiple of 13.5 times earnings, but the Fed is not on its side.
Winners for 2016
There were some great earnings reports so far this quarter and Cramer thinks these stocks are still worth buying on or after the selloff days. Firstly, Facebook (NASDAQ:FB), which reported terrific earnings, is in hyper-growth mode. The stock is still cheap in Cramer's opinion.
In the aerospace sector, Honeywell and United Technologies are doing well. 3M (NYSE:MMM), which did not let the strong dollar get in the way of its earnings, has a fast growing consumer business.
The payment companies such as Visa (NYSE:V), MasterCard (NYSE:MA) and PayPal (NASDAQ:PYPL) did well when American Express (NYSE:AXP) was losing business. Cramer also applauded the turnaround in Procter & Gamble (NYSE:PG). "Procter & Gamble dazzled, despite a strong dollar, and I was blown away by the margin improvement and the organic growth. Neither Procter nor McDonald's is done going higher," said Cramer.
Finally, Microsoft (NASDAQ:MSFT) has come back to being cool like in the '90s. CEO Satya Nadella is doing a commendable job. "To each CEO I say, congratulations, gentlemen, on a good quarter, and thanks for everything you do," concluded Cramer.
CEO interview - Brunswick (NYSE:BC)
Brunswick, which is the top maker of recreational boats and fitness machines, reported a nice quarter with a tad lower than expected revenues. Their guidance was strong but the stock fell 5%. Cramer thinks that investors are fearful of the macro economy. He interviewed Chairman and CEO Dusty McCoy to hear more about the quarter.
McCoy said that their market is growing 3-5% per year which is why they are seeing margin expansion and EPS growth. Regarding investor fear, he said that "people may be comparing us to what other people I would call are into power sports. That's ATVs, motorcycles, all of that. And those guys have been having a tough time."
The replacement cycle for Brunswick products is helping the business grow. The replacement of fitness equipment is half of boats. McCoy remains bullish on the business.
CEO interview - Ethan Allen (NYSE:ETH)
The home furnishing and interior space remains strong despite the Fed tightening the rates. Ethan Allen is a great interior and decor company which has a chain of 300 design centers providing home decor and furnishings. The company has inconsistent earnings history, but their recent quarter was strong. They beat earnings, had a rise in same-store sales and boosted the dividend by 21%. Cramer interviewed chairman and CEO Farooq Kathwari to find out more about the quarter.
"When we take a look at the number of initiatives that we have had, first, that is our operating leverage. This vertical integration really makes a difference," said Kathwari. The company is not into furniture, but in the business of design and services. Their promotions, along with a network of 1,500 designers, are enabling business growth.
They also have two new initiatives - a new website exclusively for those serving in the Army and Air Force; and a partnership with Disney (NYSE:DIS) to bring their magic into homes.
Viewer calls taken by Cramer
Bank of America (NYSE:BAC): Cramer's trust bought some more stock.
Walgreens Boots Alliance (NASDAQ:WBA): Cramer likes the stock and advises buying after Thursday's hearing.
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Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.