Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday May 22.
Has Apple (AAPL) Bottomed?
Is Apple bottoming (AAPL)? The stock was a leader, but has fallen out of favor of late. It began moving out of its funk when it rose 31 points in one session last week. The stock rallied from December 2011 to April. However, in April, the stock had an "outside day" during which it opened higher than the high of the previous day, but closed lower than the previous day's low. This is a classic technical sell signal. After that, Apple failed to rally along with the S&P 500, and seemed to have lost its leadership position. The stock fell from $622 to $555 in two weeks. While the stock rallied on a strong quarter in April, it gave up most its gains. However, Apple seems to have bottomed, since it has held up its 100 day moving average on gigantic volume. Several technicians believe that if Apple can break out over $570, then the sky is the limit. In addition to technical analysis, the fundamentals show that Apple is a cheap stock with plenty of upside ahead.
The stock market would be hitting new highs if it weren't being brought down by Europe. Cramer thinks existing home sale numbers for April speak volumes about the strength of the domestic economy. Prices of homes in areas the housing crisis hit the hardest are now rising aggressively, inventory is low and, it might soon be time to start building homes again. If more people are buying homes and are willing to pay higher prices, that must indicate that employment is looking up and banks are lending. Cramer thinks Home Depot (HD) and Bed, Bath and Beyond (BBBY) will benefit from increased consumer spending. Wal-Mart (WMT) hit a 52 week high, in spite of the scandal in Mexico, and may be worth buying.
Cramer took some calls:
Cinemark Holdings (CNK) has been bid up, and it may be too late to buy the stock. Cramer would buy it on a dip.
Cracker Barrel Old Country Store (CBRL) hit a 52 week high and has made an aggressive buyback of shares. Cramer thinks the stock will go higher.
After the botched Facebook (FB) IPO, some social media stocks, like ExactTarget (ET) are getting taken down unfairly. ET specializes in e-mail marketing and has robust cloud, social media and mobile segments. The stock shot up 32% in the first day of trading in March, but has dropped since. The stock trades at 4 times forward sales and reported a 45.7% rise in revenue on a slight earnings miss. The company works closely with Facebook, managing walls and pages, as well as Groupon (GRPN). The company's strategy is to market products directly to the consumer, based on his or her interests. Cramer asked CEO Scott Dorsey if companies like Groupon could develop their own marketing strategies instead of using ET, and Dorsey replied that ET's system has been developed and refined over ten years; "We are special and unique." Since tech is a troubled area right now, Cramer would do significant homework before buying ET.
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