Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday July 20.
21 Earnings To Watch This Week: Eaton (ETN), Halliburton (HAL), Dupont (DD), Biogen (BIIB), Dominos (DPZ), Panera Bread (PNRA), Buffalo Wild Wings (BWLD), Apple (AAPL), Caterpillar (CAT), Wyndham Worldwide (WYN), Boeing (BA), Whole Foods (WFM), Kimberly-Clark (KMB), Dunkin' Brands (DNKN), Hershey (HSY), International Paper (IP), Celgene (CELG), 3M (MMM), Chevron (CVX), Weyerhaeuser (WY), Merck (MRK). Other stocks mentioned: Cooper Industries (CBE), Potash (POT), Agrium (AGU), Mosaic (MOS), JPMorgan (JPM).
Eaton (ETN) will give the first snapshot of its merger with Cooper Industries (CBE). People expect the worst, but the stock has fallen to the point where it yields 4%. Cramer thinks the stock's downward move has been an overreaction.
Haliburton (HAL) has been hit with the fall of natural gas. The stock may have been punished enough.
Dupont (DD) needs to do something transformational, like spinning off one of its more sluggish segments.
Biogen (BIIB) is a biotech that is clearly in control of its destiny. Cramer expects good news from its clinical trials.
Dominos (DPZ) is signalling a bottom with its charts, but the bears won't give up, because they believe it will get hit on commodity costs. However, DPZ's franchisees might be suffering more from rising raw costs than the parent company. Cramer thinks DPZ might be ready to run.
Panera Bread (PNRA) and Buffalo Wild Wings (BWLD) are both being affected by commodity prices, but the question is, "How much?" Both stocks could see some selling, especially given PNRA's and BWLD's high mulitples.
Apple (AAPL) is having a transitional quarter ahead of its new iPhone and iTV release. Investors should hope for a sell-off to buy. "I need you in this stock," said Cramer. "Don't trade it, own it."
Caterpillar (CAT) may have been so badly hammered that any good news will send it up, but if it reports disappointing numbers, it will not rally.
Wyndham Worldwide (WYN) doesn't get enough respect, but it might blow away the numbers, since its hotels and timeshares are doing well, and it has been increasing value for shareholders through dividend boosts and buybacks.
Boeing (BA) needs to confirm that the aerospace cycle has not peaked.
Whole Foods (WFM) has been the last man standing in the supermarket space. Cramer suggests buying WFM on a down day in case there will be a post-quarter pop.
Kimberly-Clark (KMB) might be hurt by the strong dollar, but since it yields close to 4%, Cramer would buy it if it gets hit.
International Paper (IP) has successfully integrated its Temple-Inland acquisition, and is benefiting from rising prices for boxes. If it drops to $30 ahead of the quarter, Cramer would buy.
Celgene (CELG) needs to give a full explanation of the failure of Revlimid in Europe. Cramer thinks investors will be rewarded for staying with CELG.
3M (MMM) has been on a tear and might have some risk, given the strong dollar. The stock may give back some gains.
Chevron (CVX) is cheap, steady and has better growth than any other oil play.
Weyerhaeuser (WY) isn't done going up.
Merck (MRK) has a 3.8% yield and might be worth buying, even if growth isn't strong.
Cramer took some calls:
JPMorgan (JPM) is seeing strong revenue growth. "JPMorgan is back."
What should investors do when they have too much exposure to a stock that is falling? Cramer urges viewers not to panic. Many would feel tempted to dump an entire position in a stock at once, but this is almost always a mistake. He suggests taking a deep breath and selling some, but not all, of a position.
A sudden drop in a stock demonstrates the importance of taking gains on the way up, to reduce losses when the stock switches directions. On bad economic news, an investor should honestly assess whether this news will really affect the earnings per share of a particular holding. If not, the stock is most likely being unfairly punished. Cramer suggests coming up with a list of conservative, safe stocks to buy on down days. A few examples include Bristol Myers, Verizon (VZ), Southern Company (SO) and Kinder Morgan Energy Partners (KMP).
IPOs: Take the Money and Run: Groupon (GRPN)
The main thing to consider before getting in on an IPO deal is its starting price. The other factor is how many shares will be offered. A common practice by brokerages is to make a "sliver deal," or to offer only a small number of shares to increase demand for an IPO and to engineer a one-day pop. Groupon (GRPN) was a sliver deal, which jumped from $20 to $30 on its first day as buyers poured in. However, those who bought in the aftermarket saw a steady climb down. For many IPOs, Cramer's advice is "Take the money and run."
Your First Loss Is Your Best Loss
Defensive stocks can be bought and held for months, even years, but stocks in more volatile sectors, like industrials and tech, should be considered as trading vehicles, not long-term investments. It is important to take profits in these trading vehicles, and once the cycle is reversing and techs and industrials start to decline, it is important to sell. Investors shouldn't fool themselves thinking it is too late to get out when the cycle has reversed; "Your first loss is your best loss," advised Cramer.
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