Jim Cramer's Mad Money Lightning Round, 1/9/08: Mary Just Might Make It After All

Stocks discussed in the lightning round session of Jim Cramer’s Mad Money TV program,Wednesday January 9. Click on a stock ticker for more analysis:

Bullish calls:

Accenture (ACN): 'I like Accenture Ltd. in that business.'
First Cash Financial Services (FCFS): 'I think this is really kind of a stock that's going to make its numbers. I think it's a buy here. I am very surprised it's acted as poorly as it has... I really like it.'
Harsco (HSC): 'This is the kind of stock, HSC, that puts on 10 points that day that the Fed finally wakes up from its Rip Van Winkle like slumber.'
Thompson Creek Metal (TC): 'I think Molybdenum remains in short supply. I'm not backing away from it. I'm backing up the truck.'
CVS Caremark (CVS)

Bearish calls:

Ciber (CBR): 'CBR was asked about... strong in Europe... weak U.S. It lost momentum last quarter.'
Pacer International (PACR): 'Two legacy rail contracts expiring in 2011 and 2013. Nothing there... nothing there at all... Sell, sell, sell.'
Intuitive Surgical (ISRG): 'A very good analyst from Wachovia downgraded this stock the other day … I've got to go with this Wachovia guy... He convinced me that the top may, at last, be here on ISRG.'
KeyCorp (KEY): 'I can't recommend KEY, because I'm afraid that the quarter's bad.'
American International Group (AIG): 'Warren Buffett could run that company and I don't want to touch it right now.'
Rite Aid (RAD): 'She blew it! … I'm talking about Mary Sammons [CEO] … We get two good quarters, and maybe I'll stick with Mary Sammons.'

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Comments

[HarMegiddo]

cramer is a self absorbed, self advertising, money squandering schill. why anyone on earth listens to this guy is beyond me.
i don't understand why alpha jumps in bed with him either by putting his picks up everyday.
just ask yourself this, has cramer ever explained what constitutes a true buy signal or sell signal?
he might mention good companies, but if you buy and sell when he says to, you will be in the poorhouse.

[Victhom]

Hey Jim you didn't say that Rite Aid (RAD) was a takeover target at $3.50 why???


The Capital Research analyst, stated that the title of Jean Coutu Group may rise sharply if Rite Aid (NYSE: RAD), American Chain Drug Stores, owned 31.7% by Jean Coutu Group, was acquired.

As I mentioned Jean Coutu Group holds 31.7% of Rite Aid or approximately 252 million shares, which closed yesterday at Cap $ 2.2 Americas. The real value of the investment is approximately 560 million Americans.

What nobody said it and the problem is the following is that the same shares of Rite Aid worth $ 6.38 to June 29, 2007.

In other words, in six months, the placement du Groupe Jean Coutu melted like snow in the sun. The course is worth 3.5 billion American (3731 billion Canadian), the investment has grown to 560 million US-dollar (565.54 million).

What was the actions of the Jean Coutu Group 6 months ago? At the same time placing Rite Aid worth 3,731 billion Canadian, or at June 29, 2007, shares of Jean Coutu Group worth $ 15.50.

So in closing price yesterday, while the placement du Groupe Jean Coutu in Rite Aid founded nearly 85% (in Canadian currency), the shares of Jean Coutu Group lost almost 28%.

Some analysts believe the US drugstore chain Rite Aid could be acquired by a competitor. Assuming that possibility and the purchaser would pay approximately $ 3.50 reflecting a fairly reasonable premium of nearly 45% over the closing price yesterday of $ 2.22.

If this situation took place, the Jean Coutu Group therefore receive 789 million Americans for all its shares of Rite Aid.

[Victhom]

Jim forget to tell you this from Q3 analysts meeting:

This is from the CFO Kevin Twomey:

Ed Kelly - Credit Suisse

In terms of the Eckerd synergies, were the synergies you achieved this quarter in line with what you had expected?

Kevin Twomey

Very much so, Ed.

Ed Kelly - Credit Suisse

Can you give us a sense as to how much of that $200 million has been achieved so far, year-to-date?

Kevin Twomey

As we talked before, because of some of the ramp up, the fourth quarter is not evenly spreads off the three quarters, but we are very, very close to two-thirds of it.

OK 2/3 of $200M=$133M saving in Bank...Copy that ??

Next...

Ed Kelly - Credit Suisse

Kevin, could you just go over the liquidity situation? Whens your next big maturity? Whats under the revolver? What are you expecting in free cash for this year? Do you still expect it to be positive next year?

Kevin Twomey

The required maturities over the next three years are less than $175 million and the largest component of that is the $150 million note thats due December 15, 2008. Basically as we are going through the integration and ramping up the synergies, fiscal 2008 is going to be what everybody refers to as a negative free cash flow. In other words, operating cash flows will be less than the capital expenditures.

But in fiscal 2009, we still expect operating cash flows to exceed CapEx and in fact have us paydown the revolver. So from a, if you will, strategic perspective, from a commitment in terms of keeping things balanced, nothing haschanged. We are, if you will, very, very flexible; we have a lot of flexibility with regards to revolver and there are no restrictions on it.

So we think we are in very good shape, and as I mentioned, we areat our holiday season third quarter inventory build along with the planogram, retrofitting the Brooks/Eckerds, along with the moving out of the non go-forward inventory and restocking adding an additional burden in building inventory. So, we are kind of where we need to be, but that doesnt mean we dont have opportunities. I think that I would be remiss in my duties as a CFO by saying that we arent always looking for ways to improve the investment of our working capital inthe business.

And last....

John Heinbockel - Goldman Sachs

Finally, you sound pretty comfortable with the revolver availability. At this point you dont seethe need to go out and raise permanent capital to be able execute the CapEx program over the longer term? You are happy with the availability on the revolver?

Kevin Twomey

Very much so, John. I mean, we basically established our revolver and with the mix of revolver and term loan and senior notes with the idea in mind that we needed to have a lot of flexibility and a lot of liquidity to support our business plans over the next several years.

I know its inthe back of everybodys mind because the markets areso goofy right now, but we dont have to access the capital market to execute and support our business plan.