Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday June 22.
15 Things To Watch In The Coming Week: Hershey's (HSY), Dollar General (DG), NetApp (NTAP), McCormick (MKC), Lennars (LEN), General Mills (GIS), Paychex (PAYX), Research in Motion (RIMM), Nike (NKE), Tibco (TIBX), Family Dollar (FDO), KB Home (KBH). Other stocks mentioned: United Health (UNH), Express Scripts (ESRX), Wal-Mart (WMT), Home Depot (HD), Microsoft (MSFT), SPDR Gold Trust (GLD), Monster Beverage (MNST).
The Supreme Court's Decision on Healthcare: If the Supreme Court approves Obamacare, there may be a selloff, because of the perception that the legislation is bad for employment. However, an approval will be good for United Health (UNH) and Express Scripts (ESRX). If healthcare legislation is struck down, Cramer recommends buying Wal-Mart (WMT) and Home Depot (HD).
Hershey's (HSY) Investor Day: The company is taking market share and is seeing a ramp-up in sales, even as its input costs are decreasing. Cramer thinks HSY is a great play on lower gas prices, given how many chocolate bars are sold at convenience stores and gas stations.
Dollar General (DG) Has an Analyst Meeting/; This company is a serial issuer of shares and has a strong regional to national story.
NetApp (NTAP) Has an Analyst Day: Hopefully, the company will paint a brighter picture than it did during its previous earnings report, which stopped a tech rally in its tracks.
Lennars (LEN) has been a fantastic barometer for housing, and may set off a rally in the group if it continues to say that home prices and sales are going higher.
McCormick (MKC) reports. It has been a consistent performer and a Mad Money favorite.
General Mills (GIS) offers a great dividend, and is likely to give a positive earnings report.
Paychex (PAYX) is a reliable gauge of small business hiring. Its 4% yield has been the main reason to own the stock lately, but if Obamacare is defeated by the Supreme Court on Monday, it is a buy.
EU Summit is scheduled for Thursday or Friday. A solution or lack of a solution will affect stocks, for better or for worse.
Research In Motion (RIMM) may report a miserable quarter, but Cramer discussed the notion that the RIM keyboard has not yet been duplicated by its competitors, and may be sufficient reason for Microsoft (MSFT) to consider buying the company. Cramer thinks this theory is a long shot, but investors should at least take it into consideration.
Nike (NKE) failed to hold its crucial $100 level, but may give a strong earnings report. Bulls say the decline is an opportunity to pick up Nike at a bargain ahead of the Summer Olympics. The shorts think otherwise.
Tibco (TIBX) may deliver a decent number, but this stock has attracted a cohort of short sellers.
Family Dollar (FDO) is the weakest of the dollar stores, but might be a buy if it reports decent numbers because the sector is strong.
Chicago Purchasing Managers Report is a bellwether for stocks. If the results are poor, the averages might start the following week down. The opposite will happen if the report is strong.
KB Home (KBH) is the worst publicly traded homebuilder. If Lennar's results are good, it is worth taking gains in homebuilders before KBH reports.
Cramer took some calls:
SPDR Gold Trust ETF (GLD) depends on whether more money is printed in Europe or not. Cramer would buy GLD below $150.
Monster Beverage (MNST) should have been up, but was down. The company reported a decent quarter, but the bears were all over it. "They are wrong," Cramer said.
Jack In The Box (JACK)
Jack In The Box (JACK) rallied 3.7% to a new high after analysts from Bank of America and Merrill Lynch upgraded the stock from Underperform to Buy. Cramer discussed a method of predicting when an analyst is likely to change his mind about a stock. The same Bank of America analyst was bearish on the stock as recently as May, but showed less conviction about his bearish analysis. When an analyst's conviction seems to be waning, that is a strong indication that he may be ready to change his mind; even as the research was bearish overall, he still raised the price target on the stock.
Jack In the Box is a turnaround story, and has been refranchising stores; the percentage of franchises has gone from 25% to 73%. Franchises provide companies with stronger cash flow and earnings visibility. In addition, JACK has been remodeling its stores, and has seen a rise in its same store sales. The company beat earnings by 16 cents on increased margins and raised guidance for the year. It has a multiple of 17 and a growth rate of 12.5%. JACK plans to aggressively increase the store count for Qdoba, its Mexican restaurant, from 600 locations to 2,000 for the long-term. Cramer would buy JACK, but would wait for a pullback.
CEO Wall of Shame: Bob McDonald, Procter & Gamble (PG)
The best thing that could happen for Procter & Gamble (PG) is if its CEO, Bob McDonald, resigns. The company's shares have risen only 15% in the three years since he has taken over, while competitors have seen shares rise at least double this amount for the same period. PG used to be "the bluest of the blue chips," but now Procter is just a gamble. The first red flag was when the company announced it had to take out $10 billion in costs, even though commodity prices were declining. The company cut guidance not once, but twice so far this year. PG cites competition from non-branded products as the cause for the decline, but other companies in the sector are not complaining. Cramer thinks the resignation of Bob McDonald's would cause PG's stock price to rise, but until then, PG is on the CEO Wall of Shame.
Cramer is "tired of hearing" Procter & Gamble CEO Bob McDonald complain about dwindling demand for branded products and PG's inability to maintain its pricing. Church & Dwight (CHD) CEO, James Craigie, has taken a 160 year old company and turned it into a consumer products powerhouse, with 10% volume growth and an 8.4% increase in organic sales. CHD is famous for its iconic Arm & Hammer baking soda, but it also makes laundry detergent, kitty litter and other products. Cramer thinks Craigie is a CEO after his own heart, and quoted several of his statements: "First and foremost, I am paid to deliver great returns to my investors," and "the lives I care about most are the lives of my shareholders." The company raised the dividend by 41%, and margins have increased from 29% to the mid-40s in the past few years. Cramer is bullish on Church & Dwight.
Cramer took a call:
Clorox (CLX) is a steady grower, is largely domestic and has a solid dividend.
One trend Cramer has noticed is that, once many stocks hit the 4% yield range, they stop declining. This has happened in the case of Freeport McMoRan (FCX), Eaton (ETN), Walgreen (WAG) and Nucor (NUE). Even after it cut its forecast, Nucor was down only 5% compared to a more dramatic decline in U.S. Steel (X). it might be that NUE's 4% yield provided a floor for the stock. While the 4% dividend as a floor isn't a hard and fast rule, it is a trend worth paying attention to.
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