Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Friday May 9. Click on a stock ticker for more analysis.
Cramer gave his viewers instructions on how to play earnings reports next week. He predicts MDR will give a lackluster earnings report after the bell and will take down FWLT, which is a buying opportunity. He would buy WMT before the open on Tuesday, and predicts the giant retailer will reach $60 by Friday. Cramer says LIZ is a sell and is years away from a turnaround. While Deere has been a winner, Cramer says it tends to be volatile on earnings, and would buy half a position before it reports on Wednesday and the other half after its report. While Cramer expects a great quarter from HPQ, he pointed to the company's history of giving back its gains, and would sell half before and half after earnings on Thursday. Even though HPQ is best-of-breed, Cramer doesn't like "old tech."
Visteon is shedding its nickname "Victims' Club" and is quickly becoming "Victors' Club" as the Ford spinoff aggressively cuts costs. It is selling plants, cutting its workforce, and selling some unprofitable segments back to Ford. Analyst failed to pay attention to its stellar quarter when it reported a $51 million profit in the face of an expected $40 million loss. The company is diversifying beyond Ford and is selling to Hyundai, Nissan and other auto companies. Cramer emphasized VC is a speculative play, and noted one risk is its $2.8 billion debt. However, Cramer predicts VC will overcome this problem and may become the next Lear.
Continental Resources (CLR)
Cramer explained how he missed a double in CLR and what investors can learn from his mistake. CLR looked attractive to him in January when it was at $26, a 52-week high. Cramer kept waiting for it to descend to an optimal price, and was unsatisfied with two drops before it shot all the way up to $53.22. Now the company expects 48% growth and will continue to rise with oil. "There is not perfect pitch in this game," said Cramer, and told viewers that it is worth buying even a tiny position in a stock with a good story in spite of the price.
CEO Wall of Shame: Martin Sullivan, AIG (AIG)
Cramer thinks the CEO of the nation's largest insurance firm is so terrible, he devoted an entire annex of his Wall of Shame to Martin Sullivan. The company brought the entire market down on Friday when it reported an $8 billion loss and said it has to raise an extra $12 million. "This company is moronic and I don't trust a thing they say," said Cramer, "It's a disgrace." Cramer thinks the AIG's stock may jump as much as 20% if the CEO is fired.
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