Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday February 24.
10 Earnings To Watch This Week: Priceline (NASDAQ:PCLN), Southwestern (NYSE:SWN), Autozone (NYSE:AZO), Dominos Pizza (NYSE:DPZ), Markwest Energy Partners (NYSE:MWE), Costco (NASDAQ:COST), Joy Global (NYSE:JOY), Staples (NASDAQ:SPLS), Kroger (NYSE:KR), Foot Locker (NYSE:FL) other stocks mentioned: Caterpillar (NYSE:CAT), Whole Foods (NASDAQ:WFM), Nike (NYSE:NKE), Under Armour (NYSE:UA), Yelp (NYSE:YELP), CVR Energy (NYSE:CVI), Cheesecake Factory (NASDAQ:CAKE), Chipotle Mexican Grill (NYSE:CMG), Panera Bread (NASDAQ:PNRA), McDonald's (NYSE:MCD), Yum Brands (NYSE:YUM), United States Natural Gas ETF (NYSEARCA:UNG), ConocoPhillips (NYSE:COP).
Cramer discussed earnings to watch in the coming week:
Priceline.com (PCLN) will give a checkup on momentum stocks. Is traveling making a comeback? Are consumers feeling the pinch with higher gas prices?
Southwestern Energy (SWN) will give a read on natural gas. Is the company going to cut back on drilling because of ultra-low natural gas prices?
Autozone (AZO) is one of the best performing stocks Cramer follows. The company put through an effective buyback program. He thinks all systems are go at AZO, and investors may still be able to buy it.
Dominos Pizza (DPZ) has been stalled since its last earnings. It is worth paying attention to its expansion into India and its iPhone App.
Markwest Energy Partners (MWE) has a good yield and a strong risk/reward.
Costco (COST) has a new CEO who should talk about how the company is dealing with food inflation and its gasoline business. The stock has fallen behind others in the sector.
Staples (SPLS) is not a stock that Cramer usually follows for earnings, but it is worth hearing what the company says about small business growth.
Kroger (KR) is not a supermarket that Cramer is fond of, since Whole Foods (WFM) is the only stock he recommends in the sector, but he would listen to what Kroger management will say about food inflation and how the consumer is spending.
Yelp (YELP) has its IPO this week. As with similar internet IPOs, Cramer would get in on the deal and cash in as soon as there is an upside.
Cramer took some calls:
CVR Energy (CVI) should be sold, since there is no more money to be made in the stock.
Cheesecake Factory (CAKE) has packed out stores, but its last quarter was not good. Cramer prefers Panera (PNRA) and Chipotle (CMG) to be bought on any weakness, and McDonald's (MCD) and Yum Brands (YUM).
CEO Interview: David Demers, Westport Innovations (NASDAQ:WPRT).
Will the U.S. finally embrace its abundant, cheap and cleaner natural gas as an alternative fuel? President Obama has recently made positive statements to this effect. Natural gas could replace 25% of the oil the U.S. currently imports from overseas. Westport Innovations (WPRT) is one of the pioneers in producing engines powered on natural gas, and has a deal with Ford (F) to produce a pick-up truck with a natural gas engine; the vehicle should be released in the second quarter. Finding a natural gas refueling station is not a problem, since the truck has an engine for regular gas and natural gas. While JPMorgan downgraded WPRT because it believes the stock has gotten too expensive and has a small addressable market, CEO David Demers says he sees demand growing, and is producing a locomotive natural gas engine which should be ready to run by next year. Meanwhile, WPRT is renewing its contract with Cummins (CMI) to produce a natural gas-powered truck for mass consumption. Cramer says the natural gas engine market is no niche market and should grow tremendously.
CEO Interview: Andrew Littlefair, Clean Energy Fuels (NASDAQ:CLNE).
With natural gas 30% cleaner than diesel, more abundant and dramatically cheaper, it is no wonder that Washington is waking up and President Obama is starting to talk about natural gas as a viable alternative. Clean Energy Fuels (CLNE) builds fueling stations for natural gas vehicles, and has seen a 55% gain since November. Andrew Littlefair discussed the progress Ford has made in producing engines that run on natural gas and sees General Motors (GM) coming on board. He is hopeful that the deal between Chesapeake Energy (CHK) and 3M (NYSE:MMM) will produce cheaper natural gas engines, since the expensive cylinders make up the relatively high cost of many of the natural gas engines. Currently, 40% of all waste trucks run on natural gas, and Littlefair expects expansion into other industries. The company is building 140 fueling stations in 2012 and expects to have a network of natural gas fueling stations coast to coast by the end of the year. The dropping cost of natural gas will mean fatter margins for CLNE. "The 52 week high doesn't lie," said Cramer.
Mad Mail: CEC Entertainment (CEC), Oasis Petroleum (NYSE:OAS), Tango (NASDAQ:TNGO), Prospect Capital (NASDAQ:PSEC), Magnum Hunter (NYSE:MHR), American Electric Power (NYSE:AEP), Moody's (NYSE:MCO), Morgan Stanley (NYSE:MS), Darden Restaurants (NYSE:DRI), Continental Resources (NYSE:CLR), Annaly Capital (NYSE:NLY).
CEC Entertainment (CEC) reported a solid quarter and has a 2.3% yield, but same store sales are in negative territory. Cramer would buy Darden (DRI) instead, which is not a value trap, as he once suspected, but may have reached a genuine inflection point.
Tango (TNGO) helps companies manage telecom spending, and is a good business, but with a multiple of 45 compared to a 27% growth rate, "this stock is too hot for me."
Magnum Hunter Resources (MHR) is a good spec, but investors should be prepared to buy more if it comes down.
American Electric Power (AEP) is a solid company with a good yield.
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