Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday May 18.
13 Things To Watch In The Coming Week: Lowe's (LOW), Campbell's Soup (CPB), TechData (TECD), Autozone (AZO), Best Buy (BBY), Ralph Lauren (RL), Dell (DELL), Toll Brothers (TOL), Hewlett-Packard (HPQ), Pandora (P), Phillips Van Heusen (PVH), Costco (COST), Tiffany (TIF). Other stocks mentioned: Home Depot (HD), Hain Celestial (HAIN), LinkedIn (LNKD), Facebook (FB), Salesforce.com (CRM), Chesapeake Energy (CHK).
Cramer discussed things to watch in the coming week:
Lowe's (LOW) reports, and Cramer is circumspect after a downbeat reaction to Home Depot's (HD) good quarter. HD might be picking up market share from Lowe's, and Cramer would rather own HD than Lowe's.
Campbell's (CPB) yields 3.5%, and might ordinarily be a buy, but after talking with CEO Irwin Simon of Hain Celestial (HAIN), Cramer thinks the latter might be winning the soup wars, as consumers increasingly buy healthier choices. Cramer would stay away from CPB.
TechData (TECD) is a supermarket of tech, but with tech slowing down, Cramer would just listen to the conference call and would not buy.
Autozone (AZO) has a great buyback, and is a solid company
Best Buy (BBY) is a value trap.
Ralph Lauren (RL) is a battleground. It has a terrific domestic story, but it may suffer in Europe.
Dell (DELL) is reconfiguring itself, but Dell customers, including governments and Europeans, are spending less on its products. Dell is too risky.
Toll Brothers (TOL) is good to buy if it gets hit ahead of the quarter. TOL should benefit from the turnaround in housing, improving mortgages and cheaper raw materials.
Hewlett-Packard (HPQ) is going through a major restructuring, but is struggling. Its consulting business is facing furious competition. It is not worth trying to call a bottom in HPQ.
Pandora (P) is an unmitigated disaster, and needs a few good quarters before it can be considered a buy.
Phillips Van Heusen (PVH) is the retailer most likely to survive the woes in Europe. Cramer would buy it only after hearing what Ralph Lauren has to say.
Costco (COST) may see an upside after it raised its membership dues.
Tiffany (TIF) recently increased its dividend by 10%, but it is in the penalty box after a it failed to deliver last quarter.
Cramer took some calls:
Chesapeake Energy (CHK) is too opaque right now since its financials are hard to decipher; "I have better fish to fry," Cramer said.
When Bad Stock Prices Happen To Good Companies
It is not enough to buy stock in a good company and expect shares to rise. Often there is a disconnect between share prices and the value of a company. This can happen when macro data is working against a company, when certain sectors are out of favor or when hedge funds need to buy or dump certain stocks. ETFs cause stocks in the same sector sometimes to trade in lockstep, making the distinction between best and worst-of-breed seem irrelevant. However, it is still important to do homework. Cramer recommends spending an hour a week per holding on homework and to read conference calls and reports from the company carefully. Homework can help investors decide whether a decline is deserved or not, and it can empower people to take more intelligent risks. While few can predict when and how much a good stock may be taken down, doing homework and keeping abreast of the fundamentals will help investors know when a decline is deserved and when it is a buying opportunity.
All About IPOs. Stock mentioned: Google (GOOG)
There is nothing wrong with gaming an IPO as long as investors are aware of the elements involved in such a deal. IPOs often gain from 20% to 100% in the first day, and it is usually worth it to get in on an IPO, but to avoid buying in the aftermarket. However, investors should beware of many private equity offerings which enable the sponsors simply to unload some bad assets. Well-known brokerages that have solid reputations worth protecting are more careful about what IPOs they are involved in, and are a better bet than private equity. While it is useful to look at the management of a company, with internet IPOs, it might be a hard metric to measure; who would have thought the two young inventors behind Google (GOOG) had a company that would revolutionize tech and advertising?
Often, brokerages offer a very small amount of shares at an extremely low price to orchestrate a huge pop on the first day. It might be hard to get on these deals, but it is usually worth trying to get in on a good IPO. However, once the pop has happened, it is prime time to sell. As with the Facebook IPO, investors might have to be patient to wait for a buying point, but it was not a good idea to buy on the first day. LinkedIn jumped 100% on the day of its IPO, but it has given investors better entry points since it came public last year, and LNKD is a social media company with real earnings and growth.
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