Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday June 27.
Facebook (FB) Is Hard To Like
Facebook (FB) isn't "liked" on Wall Street, at least not well-liked. A Morgan Stanley analyst put a price target for Facebook at the level of its IPO, $38. Goldman Sachs' and JPMorgan's targets were slightly higher, $43 and $45 respectively, but the projections were for 2013, and one would expect more aggressive growth for a stock with the market cap of Facebook's. Citigroup's target was $35, and the analyst cited difficulty in the transition from desktop to mobile as a major issue, as well as privacy concerns. While the low price targets might be easy for Facebook to beat if business does improve, Facebook seems to be an expensive stock with significant obstacles and not many catalysts.
While the macro news looks negative, the economy isn't facing the same crisis that threatened it four years ago. Corporations, particularly financials, do not have the same kind of debt problems. The number of homes has gone from surplus to shortages in some areas of the country. Revolutionary oil discoveries in the U.S. could fuel an economic uptrend. Cramer commented that, while it is not time to get bullish, it is also not time to join the bears and panic.
Cramer took some calls:
Cramer told one caller that he is bearish on the for-profit education industry.
Arena Pharmaceuticals (ARNA) has had a huge gain, and Cramer would sell half.
CEO Interview: Debra Cafaro, Ventas (VTR)
Ventas (VTR) is a great way to get exposure to healthcare without having to worry about the outcome of the Supreme Court decision on healthcare legislation. Ventas is a REIT which owns housing facilities for seniors and medical office buildings. The REIT has a compound annual return of 32.5%, and its stock has risen 680% in the last 10 years. The company is making substantial acquisitions to increase its footprint in the senior living space, which is responsible for 60% of its revenues. With baby boomers hitting retirement age and seniors living to more advanced ages, demand is expected to remain strong, and the company is not directly affected by changes in Medicare and Medicaid subsidies, but those who are directly affected are Ventas' tenants. CEO Debra Cafaro pointed out that 80% of Ventas' tenants rely on private funding, and not on Medicare or Medicaid. If the stock gets unfairly hit after the Supreme Court decision, Ventas may be a buy. "What an amazing story," Cramer said.
CEO Interview: Ken Powell, General Mills (GIS)
For some reason, the consumer packaged goods space is not working as well as it usually does in times of economic uncertainty. General Mills (GIS), a leader in the sector, increased its dividend by 8% to 3.5%. While its earnings report was solid, guidance was conservative and considered disappointing by some analysts. The company has an Analyst Meeting in a couple of weeks, and Cramer wondered whether management might say something bullish at the meeting. CEO Ken Powell discussed the fact that the company is coming out of the highest commodity inflation in 30 years; currently, commodity inflation has decreased substantially, and is a tailwind for the stock. While there is significant competition in the industry, sales of grain bars, soup and health-oriented products are strong. The company expects to continue to grab market share in the Greek yogurt space; its first product launch in that category, Yoplait Greek, has doubled in size, and GIS is following up its success with Yoplait Greek 100, a lower calorie version. Powell says the company will continue to find ways to address the consumer's need for health, convenience and value.
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