Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday September 4.
Many of Cramer's followers on Twitter were urging him to give up on Heckmann (HEK). The company’s stock price is down 59% year to date, and it has been the casualty of lower natural gas prices, which are causing natural gas companies to cut down on drilling and therefore, drilling services like water purification. Heckmann has been the pioneer in dealing with fluids caused by fracking, either by treating the water at the locations or sending the water to treatment facilities. Heckmann’s fortunes might change now that it is making a smart acquisition of Power Fuels to make it a pure play on water purification from drilling. The deal gives it more exposure to oily plays, like the Bakken shale. The stock rose 38% on news of the acquisition, which should soon be accretive to earnings. The deal will make Heckmann the largest player in the industry and will enable it to have as clients all of the oil and gas majors. When Cramer asked if the public will ever be convinced that frack water can be treated, disposed of or recycled safely, CEO Richard Heckmann expressed optimism; “People get hysterical about things they don’t understand…it takes work and time and commitment to the environment to treat the water, but it can be done.”
Cramer said those who didn’t give up on Heckmann were right.
Sunrise Senior Living (SRZ) is a fantastic comeback story. In 2008, before CEO Mark Ordan took the helm, the company was steeped in debt and was trading at a mere 27 cents. Currently, Sunrise Senior Living has received a takeover bid from Health Care REIT (HCN) at a 62% premium, and the stock is up 112% since last year. Mark Ordan said the secret behind a turnaround is having a core, unassailable brand combined with a team that is committed to find constructive solutions to challenges. When Cramer asked if the fact that SRZ is in a highly regulated industry is a cause for concern, Ordan explained that the fact there are many government regulations is a sign that the company provides something that is valued and is a service for which there is constant need. The CEO does not see a possible change in Administration following the election as making a significant difference to the company. Cramer said “Sunrise is coming back and is going to be strong.”
Facebook keeps going lower, but it isn’t the fault of CEO Mark Zuckerberg, who released a statement that he intends to hold onto his shares for at least a year. The problem is shared by any web company that depends on desktop and is suffering from the transition to mobile. When Facebook had its IPO, concerns about mobile were addressed by predictions that the transition would be slow, but no one expected how rapidly the iPhone and other mobile devices are erasing profits for traditional websites. While Google (GOOG) and Yelp (YELP) work better on mobile, companies like Facebook will be left in the dust until they find a way to monetize mobile. Cramer thinks Facebook’s problems are not hopeless, but its stock should be trading at a lower price, and there is no reason to buy FB right now.
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