Stocks discussed on the in-depth session of Jim Cramer's Mad Money Program, Thursday, February 11.
Panic should never be a strategy. In fact, during a market-wide selloff, it is best to find out high-quality stocks that are going down with the rest of the market. "What is really ailing the market is that all stocks trade together off of news that shouldn't produce such a homogenized output," said Cramer.
There is something seriously wrong with the European banks since all are going down together. This could be due to the bad oil loans that investors do not know about? Or could it be the Fed rates not going high and banks not being able to make money? Or maybe the US has a lot of exposure to European banks? "People are worried that there is systematic risk caused by potential European bank failures that have not happened yet, and for the record, might not happen at all, but we have to be scared out of our wits that the possibility is even on the table," adds Cramer.
Investors are not intra-day traders and they just want to buy stocks they like at prices they did not expect. So do not worry, and wait for the declines to get uglier to buy great stocks at bargain prices such as McDonald's (NYSE:MCD), Cisco (NASDAQ:CSCO), Procter & Gamble (NYSE:PG) and Johnson & Johnson (NYSE:JNJ).
"I have no idea if these European banks are going to fail. I do know that this situation is creating opportunities for those who are willing to own individual stocks," said Cramer. Investors who own the stocks for the long term will always win in the selloffs.
CEO interview - Wendy's (NYSE:WEN)
Every time oil goes down, it takes the market along which in turn benefits the restaurant stocks as lower energy costs benefit their bottom lines directly. Wendy's reported its best quarter on Wednesday in more than a decade and the stock is still near the lows. Cramer interviewed CEO Emil Brolick to know what's in store.
Brolick mentioned that new vegetarian black bean sandwich is an example of the company's new strategy. They are still being tested and could be rolled out soon. Once ready, Wendy's will be doing a big social media and digital push. The company is also making big investments in technology to offer mobile payments.
Brolick commented on gasoline and economy, stating that gasoline is costing less than half of what it did few years ago. This has put a lot of money into the consumer's pocket. "We think this has been an important factor in putting together really several nice quarters for the industry, and we are benefiting from that, as a lot of people are."
The company has bought $100M stock in the last year and will continue to buy stock and raise dividends.
Cramer is worried as he thinks Janet Yellen has set America on a no-growth trajectory. US is not a growth engine anymore that can pull the world out of a slump. For some reason, Yellen thinks that higher wages mean inflation and hence the job growth should be mitigated with higher interest rates. Cramer thinks that another rate hike could put the US in a recession, and he is rooting against job growth.
"I feel like this could be a savior moment for Yellen, because she has a chance to save not just America, but the entire world," said Cramer. He thinks that the Fed's agenda is narrow-minded and the US interest rates are higher than rest of the developed world. "I waffle between being angry at the Fed and just wanting to shake the members into a reality check of what is going on in the real economy," he adds.
The books that Yellen learned from were written before Amazon (NASDAQ:AMZN) and Wal-Mart (NYSE:WMT) killed high-paying retail jobs and made digitization and offshoring easy. The decrease in job growth and credit tightening should not happen at the same time. The country is in a unique situation.
Yellen's focus seems to be on global issues only. "This time around, it is not that the people on the Fed know nothing. They just know too much about the way things used to be and not enough about the way things are," concludes Cramer.
CEO interview - Panera Bread (NASDAQ:PNRA)
Panera Bread is a chain of 1,900 bakery cafes serving healthy and tasty food. The company reported a good quarter on Wednesday. It revamped its model in 2014 which was aimed at enhancing guest experience. The company also bought back 8% of its stock in 2015. Cramer interviewed CEO Ronald Shaich to know more about the quarter.
"Our view is essentially we are moving into an omni-channel world. As we built out 2.0, it is really a better guest experience," said Shaich. The customer experience has been enhanced through delivery. Shaich also mentioned that Panera has the best loyalty program in the restaurant industry. It has enrolled 50% of its customers, while the next best is Starbucks (NASDAQ:SBUX) with 25%.
"We try to do most things quietly. We are more interested in touching the customer," added Shaich. Regarding the stock buyback, he said that the company is very conservative about its balance sheet.
CEO interview - Columbia Sportswear (NASDAQ:COLM)
Cramer recommended Columbia Sportswear three weeks back as the winter started rolling in. However, they are more than just a winter apparel company. They have great brands like Montrail, Mountain Hardware and Prana sustainable yoga and climbing apparel. Cramer interviewed CEO Tim Boyle to know more about their last quarter, which was a solid earnings beat along with raised guidance.
"It's always great for us when the weather is cold, but frankly, we have really focused diligently on making the business better and less weather dependent," said Boyle. More than 30% of the company's sales are outside the US, which makes the business less weather dependent.
Prana brand is a small part of the company's business, but its growth is tremendous and it is less weather dependent too. It's 50% fall and 50% spring, but more importantly it is 70% women's wear.
The company is concentrating on its existing brands but it also has the ability to acquire new brands if it fits well with the company.
Viewer calls taken by Cramer
KeyCorp (NYSE:KEY): Cramer doesn't like the financials although he thinks the bank has value. He has stopped recommending financials on the show due to their exposure to oil loans.
NovoCure (NASDAQ:NVCR): As long as you understand it's a total spec, you're fine.
Marathon Petroleum (NYSE:MPC): This is a good company but Cramer is not recommending fossil fuels right now.
New York Community (NYSE:NYCB): Take your profits off the table.
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