Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday April 13.
17 Things To Watch This Week: Citigroup (C), Goldman Sachs (GS), Johnson&Johnson (JNJ), Coca-Cola (KO), IBM (IBM), Intel (INTC), Qualcomm (QCOM), American Express (AXP), Morgan Stanley (MS), Bank of America (BAC), Microsoft (MSFT), General Electric (GE), Under Armour (UA), Honeywell (HON), Kimberly-Clark (KMB), Schlumberger (SLB). Other stock mentioned: Facebook IPO (FB).
Cramer discussed things to watch in the coming week with the caveat that there might be a "fog" of activity as buyers or sellers move too quickly on earnings without doing homework first. He also thinks that the event which could put the biggest cloud over earnings is the Spanish bond auction.
Citigroup (C) has to report a good quarter if there is going to be a comeback in the banking sector. Management should discuss the situation in Europe, its balance sheet and plans to return capital to shareholders through dividends or buybacks.
Goldman Sachs (GS) has become kind of a "black box," and Cramer says this is a rare occasion in which he doesn't really know how GS will do. The company has gotten so conservative that Cramer worries management will not be exuberant enough about a good report, and the banks might suffer.
Johnson & Johnson (JNJ) would "shock" Cramer if it had anything good to say, after its numerous recalls and failures. The only thing that could improve this company is the resignation of its CEO.
Coca-Cola (KO) should "light up the sky" with strong earnings.
IBM (IBM), like KO, should give a good report.
Intel (INTC) is benefiting from the stabilization of PC sales and its strong server business.
Qualcomm (QCOM) is a well-loved company and was down recently, so it might be a buy before the quarter.
American Express (AXP) should report solid business, but it tends to get hammered after it reports.
The Spanish Bond Auction should be terrible. Cramer warned viewers not to get too aggressive on Wednesday, because stocks might get hit on Thursday on bad news from Spain
Morgan Stanley (MS) has been trashed, and it should be a buy at $16. This is a fabulous bank with a tarnished reputation, and it might be the cheapest in the industry.
Bank of America (BAC) might be ready to rally even if its results aren't good.
Microsoft (MSFT) has a new product cycle, but news of this might be baked into the stock, which has been "red hot." Cramer would buy below $30.
General Electric (GE) is a terrific stock with a 3.5% yield
Kimberly-Clark (KMB) should be bought after it drops, since it is likely to disappoint.
Schlumberger (SLB) is in bear market mode along with other oil service stocks because of the decline in natural gas. Cramer would not buy SLB, but would listen to the call for an indication of an oil drilling comeback.
Cramer took some calls:
The Facebook IPO (FB) is only worth buying if it is at the right price. Cramer thinks that if it is priced below $100 billion, it is a buy.
Cramer would not sell minerals stocks, but thinks they might be "buys" because he sees iron ore and copper creeping back.
CEO Interview: Sam Thomas, Chart Industries (GTLS).
The relentless decline in natural gas prices in the U.S has created an increasing need to export the fuel to markets in Europe and Asia where it can fetch a higher price. Exporting natural gas is not a simple matter, and it has to be liquified to enable transport. Chart Industries (GTLS) has been a pioneer in the transport, storage and exporting of liquified natural gas [LNG]. The company gets 60% of its sales from overseas and has tripled its backlog. The stock has increased 88% since Cramer got behind it in February 2011, and is just 5 points off its high. The company is involved in every stage of natural gas storage and transport. Business in China is growing an aggressive 40-50% per year, as the company is sending equipment to China and manufacturing some of its products there. GTLS will benefit not only from export of LNG, but from the buildout of natural gas stations in the U.S, and is currently training its own engineers to deal with what it sees as the growing domestic energy boom. Cramer is bullish on Chart.
Cramer was thankful that there was a pullback because it allowed investors to buy growth stocks like Lululemon (LULU). This stock has been up nearly in a straight line since the year began, and hasn't given investors a chance to buy until now. Cramer analyzed the stock according to 10 criteria.
- LULU is a "junior growth stock" which is still in its early phases of growth. The company gave a very bullish analysts day when management discussed its 26% same store sales, the highest in the industry, and its intention to double its store count. The company has new concepts, including children's clothing, which has seen 85% growth.
- There is no question that the end markets are big enough, since athletic apparel is a huge category and most women like LULU's apparel for everyday wear.
- The company will stay competitive since it is a lifestyle brand with customer loyalty. LULU is innovating with quick-drying nylon and antibacterial fabrics.
- LULU is growing quickly and is doing the right thing by continuing to invest in itself rather than offering a dividend.
- Lululemon has plans to grow internationally with19 stores in Australia and a London showroom. Management estimates it can open 300 stores overseas, but Cramer thinks this estimate is too conservative.
- The balance sheet is clean; LULU doesn't have a penny in debt.
- The near-term multiple is 35, but the company has a 30% long-term growth rate, so it is still buyable.
- Management has a proven track record of executing and should make good on its future plans.
- Retail can sometimes be vulnerable to macro economic trends, but since LULU is a lifestyle brand, it transcends the usual problems retailers face, because of intense customer loyalty.
- Lululemon is less vulnerable than other apparel companies to raw costs, because it develops its own synthetic fabrics and uses less cotton.
Cramer took some calls:
Hot Topic (HOTT) is not a consistent stock.
Arena (ARNA) is too speculative.
Vocus (VOCS) is a highly speculative cloud-based software company. Vocus just acquired a social and email marketing firm for a huge price, and Cramer is worried about integration, especially since small businesses are not in great shape.
Ubiquiti (UBNT) is a growth stock, but just came public and doesn't have a long-term track record. The stock has already run up 129% since its IPO. It trades at a multiple of 27, but has a 25% revenue growth rate. Cramer would wait for the stock to cool off, and thinks it has an interesting story.
CSX (CSX) is too levered to coal to be a buy.
Nordic American Tankers (NAT) is going to benefit from rising day rates, should report a good quarter and has an apparently safe dividend.
Western Digital (WDC) should report better than expected earnings. However, Cramer thinks WDC is expensive and would buy Intel instead.
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