Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday March 9.
10 Things to Watch This Week: Clean Energy Fuels (CLNE), Urban Outfitters (URBN), Anadarko Petroleum (APC), Chevron (CVX), Vera Bradley (VRA), Ross Stores (ROST), Demandware (DWRE). Other stocks mentioned: Monster Worldwide (MWW), Automatic Data Processing (ADP), Paychex (PAYX), Green Mountain Coffee Roasters (GMCR), Starbucks (SBUX).
Clean Energy Fuels (CLNE) is reporting on Monday and should discuss its ability to build out natural gas stations. The company should also discuss opportunities for government backing.
Urban Outfitters (URBN) has been a fabulous growth stock but has a new CEO. Cramer wants to know what management's plan is and where the company will be moving.
Anadarko Petroleum (APC) has an investors' conference. APC's CEO is stepping down, but the company may still be worth owning.
Chevron (CVX) has an analyst meeting and it is an essential conference because the company provides accurate data and is always "uncannily correct" about where oil prices are going.
Vera Bradley (VRA) is a heavily shorted stock and Cramer wants to know if the shorts will get squeezed following its earnings.
Ross Stores (ROST) should be reporting positive numbers and discuss aggressive expansion plans. Cramer would be a buyer ahead of the quarter, especially if there is a general sell-off, and says ROST is his "pick of the week."
The Federal Reserve Meeting is worth listening to in order to find out plans for QE3.
The February Consumer Price Index number will be given, and is an indicator of growth and inflation.
The February Industrial Production Report is an important number that enables the Fed to decide how well the U.S. economy is doing. Cramer thinks there is an uptrend in industrial production, but not dramatic.
Demandware (DWRE) has its IPO, and is a good subscription-based software company. It is a play on e-commerce. Cramer would get in on the deal.
Cramer took some calls:
Monster Worldwide (MWW) may be putting itself up for sale, and the price will depend on valuation rather than the health of the job market. Cramer prefers Automatic Data Processing (ADP) and Paychex (PAYX) as plays on the increase in hiring.
CEO Interview: Gordon Kerr, EnerPlus (ERF)
Enerplus (ERF) has a yield of 9.1%, with huge acreage in the Bakken and Marcellus shales, and is making the transition from natural gas to oil. ERF is growing its oil production by 22%, and management buys and sells assets for a handsome profit. While the Bakken has become an expensive place to invest, CEO Gordon Kerr says the company is able to make $15 million per well in the Bakken. Kerr assured viewers that the dividend is sustainable, and feels that ERF will continue to benefit from rising oil prices. The company currently has a dividend reinvestment plan for shareholders.
A Tweeter asked Cramer about Solazyme (SZYM), a stock which, at first glance, Cramer thought was too speculative, but after doing some research, he thinks the stock may be a "buy." He outlined 6 questions to ask when looking at a speculative stock.
- What does the company do? It is essential that an investor understands what a company actually does. Solazyme (SZYM) uses algae to transform plant materials into oils and fuels.
- What are the company's "blood lines?" SZYM began in 2003 and went public less than a year ago. It was founded by Jonathon Wolfson and Harrison Dillon, partners with business and science backgrounds. The CFO was head of a company that was bought by Intel (INTC), and the underwriters of the IPO were Morgan Stanley and Goldman Sachs. The IPO raised 24% more money than expected.
- What are the sources to create an upside? SZYM has partnerships with Bunge (BG) and Dow (DOW) and other companies in the areas of agriculture, fuel and personal care products. SZYM's technology has a wide array of applications.
- Total addressable market: The company has exposure to the biofuel, chemical, nutritional and personal care markets and can ramp up production.
- How much risk is involved? The company has abundant cash and a clean balance sheet and will not have to do a substantial equity offering. SZYM has the competitive advantage of developing its own patents and doesn't have a significant challenge from competition.
- How much risk can I take? Every investor needs to decide how much risk they can handle. Younger investors can afford a greater risk, because they can earn back potential losses. Cramer likes the low price of the stock, but notes it has already run 6%. He suggests investors use limit orders and be patient, since there isn't an immediate catalyst, but the company has great potential.
Cramer took some calls:
Vivus (VVUS) just got FDA approval for its obesity drug, and Cramer thinks the move has been made.
VeriFone (PAY) is on the way up, with a rise in gross margins, a 12% increase in organic growth. Its addressable market in the U.S. could expand by 50%. PAY is cheap with a 20% growth rate, but investors should use caution, since it is recovering from accounting problems. Cramer would wait for a pullback to buy.
Provident Energy (PVX) is dead money, because it caught a takeover bid, and shareholders have to give their approval. If they approve, the stock will not move, and if they nix the deal, shares will drop.
Heckmann (HEK) had too much exposure to Hanesville Shale natural gas, but Cramer is still a buyer: "The long-term business is good."
Solar Capital (SLRC) has a strong cash flow that more than covers the dividend.
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