Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday July 27.
16 Things To Watch In The Week Ahead: Anadarko Petroleum (NYSE:APC), Apache (NYSE:APA), Cirrus Logic (NASDAQ:CRUS). Masco (NYSE:MAS), Coach (NYSE:COH), Pfizer (NYSE:PFE), Allergen (NYSE:AGN), Avon (NYSE:AVP), Time Warner (TWC), Beam (NYSE:BEAM), Chart Industries (NASDAQ:GTLS), Clorox (NYSE:CLX), Procter& Gamble (NYSE:PG). Other stocks mentioned: Apple (NASDAQ:AAPL), Whirlpool (NYSE:WHR), Amarin (NASDAQ:AMRN), Qlik Technologies (NASDAQ:QLIK).
On a second "up" day for stocks, with the Dow climbing 188 points on Friday, Cramer warned investors not to be too optimistic. However, the coming week could be a good one if Europe finds solutions for the euro and to the sovereign debt crisis. However, all of the gains of the week could be given back if the Jobs Report on Friday isn't strong. Cramer isn't expecting a solid employment number, and suggests taking gains in high-flying stocks ahead of Friday.
Anadarko Petroleum (APC) is a great oil growth story that has been stalled. If management says good things, Cramer would buy Apache (APA) ahead of its earnings on Thursday, because both companies have similar product profiles.
Masco (MAS) is a kitchen and bath company that might be ready to roll, particularly since its competitor, Whirlpool (WHR), reported a poor quarter and the stock wasn't hit. "Housing is the brightest spot in the investment universe," said Cramer, and Masco is a cheap stock if its news is positive.
Coach (COH) will indicate whether luxury spending is in the doldrums and if business in China is slowing.
Pfizer (PFE) received disappointing data recently on its Alzheimer's drug. However, Cramer thinks the company has plans to counteract this disappointment and unlock value. In the meantime, PFE pays investors to wait with its generous dividend.
Apache (APA) should give an indication on the direction of natural gas, and is a buy ahead of the quarter if Anadarko reports strong results.
Allergan (AGN) is likely to surprise to the upside, given strong Botox sales, especially as a treatment for migraines. Cramer is confident enough about AGN that he would buy it ahead of the quarter.
Avon (AVP) is going to report its first post-Andrea Jung quarter, and Cramer thinks things can only look brighter for AVP. However, he also suspects that Jung might be still wielding influence from her position as Chair, and would like to see her removed from this position as well.
Time Warner (TWC) is a stealth housing play since new homeowners often purchase cable for their homes. The company should give good results.
Beam (BEAM) is likely to report good news and give an upside surprise.
Chart Industries (GTLS) will be busy making more storage tanks if natural gas has indeed bottomed. Cramer wants to see if management talks about new orders.
The Federal Reserve Meeting will give a clearer picture on where the Fed is headed with the domestic economy.
Clorox (CLX) has been somewhat protected by its largely domestic exposure, but Cramer wants to hear about strategies for growth.
European Central Bank needs to outline its strategy for the euro and sovereign debt.
Procter & Gamble (PG) needs to discuss new initiatives to unlock value.
July Non-Farm Payroll Number is not expected to be strong. Cramer thinks a weak number could give a final sour note if the week is strong, and he would take gains in momentum stocks ahead of this announcement.
Cramer took some calls:
Amarin (AMRN) received approval for a new drug, but the stock was down 2 points. Cramer told the caller that he also expected a stronger performance from the stock, but believes results were lackluster because the label for the drug was not aggressive enough, and the treatment was expected to be applicable for multiple uses.
QLIK Technologies (QLIK) has been on a rough ride. Since the stock is up 3 points, Cramer would ring the register.
CEO Interview: Jim Reid-Anderson Six Flags (NYSE:SIX)
Six Flags (SIX) has made a comeback after filing for bankruptcy in 2009. A year later, it emerged from bankruptcy, and recently reported a 63 cent earnings beat, revenues 6.4% higher than expected at 10.7%, ticket sales up 11%, concessions and retail sales within the park rising 12%, attendance increasing by 12%, and a 22% rise in sales of seasonal passes. The stock yields 4.1%.
CEO Jim Reid-Anderson says the company "hasn't looked back" since filing for bankruptcy. When asked about consumer spending and gas prices, Reid-Anderson says he hasn't seen a fluctuation in the number of guests, even when gas prices were high, because visitors are looking for a unique experience close to home. Around 85% of visitors live within 100 miles from the theme parks, and see their visits as the "perfect day out." The rise in seasonal passes has been valuable in providing the company with earnings visibility and increasing the number of sales within the park of concessions and retail items.
The company owns 40% of Dick Clark Productions, and Reid-Anderson indicated the company might spin-off or sell this non-core asset. The company generates $4 in cash per share, and the CEO says the intention is to give a good amount of that back to shareholders.
Cramer is bullish on Six Flags.
Cramer considers Sprint (S) the "holy grail of speculative stocks". Even though it has doubled in the last 6 months, it is still a buy, since it is 70 cents away from the $5 threshold. Institutional investors are prevented from owning stocks below $5, and once Sprint crosses this barrier, demand should increase substantially. Sprint reported a "thing of beauty" quarter that confirmed that CEO Dan Hesse is orchestrating an impressive turnaround. First, Sprint has made a deal with Apple to sell the iPhone, and has sold 1.5 million phones, 40% to new iPhone customers. Sprint, unlike AT&T (T) and Verizon (VZ), offers unlimited data. The company is getting rid of Nextel's network, which was a drain on the company, and is busy converting former Nextel customers to Sprint; it is estimated that 60% of Nextel's 3 million customers will use Sprint. In addition, Sprint is a pure wireless play, and has no slow-growing landline segment to be a drag on earnings. Its churn rate was 1.69%, the lowest level ever, and its average revenue per user increased 7% year over year. Sprint has been improving for a while now, with 4 straight quarters of higher operating income, this time, a 10% increase over the last quarter, and the 9th straight quarter of higher subscriber additions. Analysts still seem to hate Sprint, but Cramer thinks they will soon change their minds.
Cramer took a call:
MetroPCS (PCS) reported a decent quarter, but it is time to ring the register.
While some pharma stocks like Merck (MRK) offer secure dividends and others, like Abbott Labs (ABT) and Covidien (COV), are unlocking value by breaking up, Cramer also likes "old school senior biotech" stocks that continue to deliver. Amgen (AMGN), Celgene (CELG) and Gilead (GILD) are three biotech stocks that have strong growth prospects for years ahead. Amgen is close to a 52 week high, thanks to its breakthrough drugs to treat tumors and "bad" cholesterol. Gilead's stock rose $4 after it reported robust earnings. While some were worried about Celgene's blood cancer drug Revlimid, in Europe, CELG's story remains intact and its pipeline is solid.
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