Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday July 19.
Facebook (NASDAQ:FB), Five Below (NASDAQ:FIVE), Synacor (NASDAQ:SYNC), Supernus Pharmaceuticals (NASDAQ:SUPN), Ignite Restaurant Group (NASDAQ:IRG), WageWorks (NYSE:WAGE), Merrimack Pharmaceuticals (NASDAQ:MACK), Allison Transmission (NYSE:ALSN), Freeport McMoRan (NYSE:FCX), Annie's (NYSE:BNNY)
After the Facebook (FB) fiasco, investors have been nervous about IPOs until now, with the successful first day for Five Below (FIVE). The stock rose 53% instantly and closed up 56%. Cramer would ring the register on FIVE. Cramer discussed two 2012 IPOs that are still riding high, two newly public companies that are losing and one IPO of 2012 with significant upside.
Synacor (SYNC) is a cloud-based internet play that has rallied 160% since it became public. The company trades at a rich multiple of 40 compared to its 20% growth rate. Cramer would ring the register.
Supernus Pharmaceuticals (SUPN) has rallied 197% from its IPO, and while it has a promising epilepsy drug, Cramer would take profits.
Ignite (IRG) is having accounting problems during its very first quarter since going public. The stock is down 21.5% from its IPO. Cramer would sell.
WageWorks (NYSE:WAG) trades at 24 times earnings with a 14% growth rate, and is priced for perfection, which is not good, since hiring has been anemic and the business is not strong.
Has More Upside:
Merrimack Pharmaceuticals (MACK) is up only 25 cents since its IPO. This single-digit small market cap biotech is definitely a spec play, but it has a terrific pipeline, including a pancreatic cancer drug in Phase III, and colorectal cancer, lung cancer and breast cancer drugs in Phase II. Cramer thinks those who don't mind playing FDA roulette with a cheap stock should buy MAC, but only on a decline.
Cramer took some calls:
Allison Transmission (ALSN) has been hurt by the end of the truck bull market. Investors who want to buy ALSN as a value play will have to wait to see gains until the next truck bull market.
Freeport McMoRan (FCX) is fine to hold, but Cramer would not buy it until it pulls back to a level where it yields 4%.
Annie's (BNNY): Cramer would take profits.
PPG Industries (NYSE:PPG), VFCorp (NYSE:VFC), Walgreen (WAG), CVS Caremark (NYSE:CVS), Express Scripts (NASDAQ:ESRX), Wells Fargo (NYSE:WFC), Honeywell (NYSE:HON), Eaton (NYSE:ETN), Cooper Industries (CBE), Disney (NYSE:DIS), Whiting USA Trust (NYSE:WHX), Energy Transfer Partners (NYSE:ETP)
Cramer discussed companies that are taking control of their destinies and refusing to accept the notion that there can't be growth in a volatile economy. PPG Industries (PPG) is going to unlock value by selling its commodity chemical division, which has been a drag on earnings. The stock was already up 34% for the year, and it rose by $7.77 on Thursday.
VFCorp (VFC) shot up 10 points, and has been a strong acquirer of brands. Even though it is experiencing headwinds in Europe, VFC is revamping brands to grab market share. Walgreen (WAG), which has long been losing market share to CVS Caremark (CVS) during its long disagreement with Express Scripts (ESRX), finally decided to settle the longstanding conflict, even as some critics think that Walgreen merely caved in. The stock saw an 11.97% rise.
Wells Fargo (WFC) is outshining other banks, with 30% of the mortgage market. Honeywell (HON) CEO Dave Cody predicted 5 years of zero growth in Europe, but the company is finding new ways to grow with technology for domestic natural gas refining and research and development investments to improve its aerospace business. Energy saving devices are needed, regardless of how well the economy is going.
Eaton (ETN) is going through growing pains with its challenging acquisition of Cooper Industries (CBE), but Cramer thinks that ultimately the acquisition will be accretive.
Cramer took some calls:
Disney (DIS) is at its 52 week high and might be climbing higher. Cramer thinks it could reach $52-56, and said "ESPN is the most relevant brand in the world."
CEO Nick Pinchuk, Snap-On (NYSE:SNA)
The legendary toolmaker, Snap-On (SNA) "knocked it out of the park" with its 7 cents earnings beat with 10% organic growth in tool sales. The stock soared 9.6% to a new high.
"We are a cash rich and a confidence poor nation," said CEO Nick Pinchuk. In spite of a gloomy attitude many have about the economy, the CEO says he is seeing strong demand. The fact that most cars in the U.S are old means that they require repairs. Asia's cars are newer, but Pinchuk thinks that as SNA expands abroad, so will demand as the average age of the Asian car will rise. Pinchuk discussed the company's successful expansion into airplane repair. He was proud that SNA has been good for domestic jobs, since 80% of the manufacturing is done in the U.S.
"The company is doing unbelievably well," said Cramer.
CEO Interview: Moshe Gavrielov, Xilinx (NASDAQ:XLNX)
Xilinx (XLNX), the producer of programmable logic devices and customized chips, reported a better-than-expected quarter, but guided down. A full 30% of the company's value is in cash, the stock trades at a multiple of 11 with a 12% growth rate, and it would seem to be a buy apart from its lackluster guidance. CEO Moshe Gavrielov said that there is often "ebb and flow" in demand from its 20,000 customers, and given worries about the macro economy, customers are getting cautious. Orders have slowed, but XLNX isn't seeing an increase in cancellations. The CEO said he sees a "little hiatus" in demand, but the long-term trend toward wireless is not going to change.
"This is a tepid quarter for Xilinx," said Cramer, "But you should take advantage of it. Not run from it."
Jim Cramer's Action Alerts PLUS: Trade right alongside a Wall Street pro! Start your 14-day FREE trial today.
Get Cramer's Picks by email - it's free and takes only a few seconds to sign up.