Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday March 30.
10 Things to Watch This Week: Cummins (CMI), Monsanto (MON), Bed Bath & Beyond (BBBY), CarMax (KMX), Gap (GPS), Constellation Brands (STZ) other stocks mentioned: EOG Resources (EOG), Amazon (AMZN)
Cramer discussed things to watch in the coming week.
If the Chinese do not cut interest rates by Monday, stocks could get hit.
Monsanto (MON) may surprise to the upside; agriculture stocks have been taking a breather lately.
Auto sales numbers will be released. Cramer wants to see if the target for 15 million new cars is a realistic goal.
The German Manufacturing Number should indicate strength or weakness in Europe.
March truck sales will be released. Cummins (CMI) has climbed 36% so far this year, but could get hit if this number is weak.
Bed, Bath & Beyond (BBBY) has been hurt by chatter that it is facing too much competition from Amazon (AMZN). However, Cramer thinks BBBY will dispel the critics and will report a good number. The stock tends to drop after earnings and then move up again gradually.
CarMax (KMX) is not a buy before the quarter, but might be worth investing in if it gets hit after earnings, since used cars are a strong secular trend.
Monthly Retail Sales Numbers will be released, and investors will be able to see how gasoline prices are affecting the consumer. Gap (GPS) is the stock to watch; it has moved up 41% and has been upgraded. This stock has the most on the line and needs strong same store sales.
Constellation Brands (STZ) is the leading seller of wine and has a series of positive moves. The stock is up 14%, and Cramer thinks it isn't finished rising.
The Employment Number is an essential gauge of the economy, but Cramer thinks the number might drop because of the decline in domestic natural gas drilling.
Cramer took a call:
A caller asked about natural gas, but Cramer would not get behind pure natural gas stocks. He prefers hybrid gas and oil plays like EOG Resources (EOG).
CEO Interview: Nick Aikens, American Electric Power Company (AEP)
Utilities have been a battleground sector, hurt by the unpopularity of coal. The EPA has stated that no more traditional coal plants can be built, and this has been a blow to utilities. American Electric Power Company (AEP) has seen a 6.6% decline in its share price, but offers a 4.9% dividend, and has a solid, conservative business model. Cramer thinks the EPA issues have been baked into the stock. The company faced another headwind when its request for price increases in Ohio was rejected; however, AEP has submitted a modification of the original deal that might be accepted.
CEO Nick Aikens conceded that the stock tends to get hit because it is associated with coal and the issues of disagreement over utility prices in Ohio, but added "We are an across the board company." Currently 40% of its revenues come from Ohio, but Aikens is confident that a revised version of the price plan will be accepted. AEP is adjusting to the restrictions on coal to get more exposure to natural gas, and has a strategy of locking in savings on natural gas by buying it at low prices. Cramer thinks the yield and the company are safe.
Roundy's Supermarkets (RNDY), Carrol's Restaurant Group (TAST), Arcos Dorados (ARCO), McDonald's (MCD)
Speculative stocks are not just biotechs and undiscovered tech companies. One good speculative play is Roundy's Supermarkets (RNDY), which runs 159 supermarkets and 99 pharmacies under different names. The company had an under the radar IPO and popped 6% on the day of its public offering in February. Since then, it has moved up an additional 26%. This $10 stock pays a rich 8.5% dividend, three times higher than the yield of the average supermarket, and trades at a multiple of just 7 when its peers trade at an average of 10. Cramer doesn't ordinarily get behind supermarkets because competition is cut-throat and margins are thin. However, RNDY is a niche supermarket that is mainly located in the Midwest and has an edge over its larger competitors because it understands the tastes and the needs of its local customers. Cramer thinks RNDY is a buy, given its superior management and bountiful dividend.
Cramer took some calls:
Carrol's Restaurant Group (TAST) the stock has jumped from $13-15 in one week, and Cramer would not buy it at this level.
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