Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday September 7.
9 Things to Watch in the Week Ahead: Palo Alto Networks (NYSE:PANW), Five Below (NASDAQ:FIVE), United Natural Foods (NASDAQ:UNFI), Apple (NASDAQ:AAPL), Pier 1 Imports (NYSE:PIR). Other stocks mentioned: Hain Celestial (NASDAQ:HAIN), Whole Foods (NASDAQ:WFM), Monsanto (NYSE:MON), Dupont (NYSE:DD)
Investors need to hear that the good news about a potential Chinese stimulus on Friday will be followed up with a concrete announcement about rate cuts or building programs. If there is no bullish news about China on Sunday, the industrials and commodities stocks will likely give up Friday's gains.
Palo Alto Networks (PANW), along with Five Below (FIVE), both report on Monday, and have been highly successful recent IPOs. PANW, a cyber security company, is up 68% since its IPO, and investors who bought in the after market have seen a 33% gain. Five Below doubled on its first day and is up 30% for those who bought the stock on the following day. Cramer likes both stocks, but prefers FIVE, and expects to hear good news from both companies.
United Natural Foods (UNFI) reports, and should re-invigorate interest in the natural goods segment. If there is a decline in stocks on Monday, Cramer would buy deep in-the-money calls in Hain Celestial (HAIN) and Whole Foods (WFM) ahead of UNFI's earnings on Monday.
Apple (AAPL) releases its newest iPhone. The stock tends to run up into these introductions and often sells off after. Unless there is a new extremely useful feature to this iteration of the iPhone, Cramer expects a decline, which should provide investors with a new opportunity to buy the stock as a long-term investment.
The USDA Crop Report might reflect a brighter future, since some rain has fallen after the terrible drought. Cramer would buy Monsanto (MON) and Dupont (DD) on weakness expected as the result of this summer's drought.
German Supreme Court will rule on the legality of Germany's moves to save the euro.
Pier 1 Imports (PIR) is reporting earnings, and should say something about the health of its online business. While the company had to slash some prices for summer clearance, Cramer thinks the best is yet to come for PIR.
G-20 Meeting: Investors should keep an eye on news from the G-20 Meeting as an indicator of the direction of the global economy.
With the Dow up 15 points on Friday, many wonder why the averages weren't down dramatically on bad news. The unemployment number rose from 8.1% to 8.3%, Intel (INTC) pre-announced lower sales and a decline in gross margins, and the battle between Amazon (AMZN), Google (GOOG) and Apple (AAPL) over tablets and smartphones may mean an all-out price war which may lead to shrinking gross margins. However, a rosier picture of a possible European bailout, a "present" expected from Fed Chairman Ben Bernanke on Thursday and China's pulling the trigger on new stimulus programs kept stocks afloat. Financials like Bank of America (BAC) and industrials were strong on Friday
Cramer took a call:
Vale (VALE) has declined a staggering 60% so far this year, and with a possible Chinese stimulus, there is some upside potential. Vale has a long way to go before it will be too expensive.
Normally, Cramer suggests staying away from battleground stocks, but Questcor (QCOR) might be worth the fight. QCOR is one of the most controversial biotech stocks, and has seen a staggering run from 50 cents in 2005 to its current level of $52. The stock has had a wild ride this summer, from $59 in July to $35 in August, and since then, it has roared back up to $52. Why has the stock been so volatile?
QCOR has a gel, Acthar, that has 19 different indications, and the company wants the treatment to gain approval for even more conditions. The trouble began when there was a rumor that another company was developing a generic form that would be released in 6 months to a year. On further inspection, this was merely a rumor; Any such treatment would have to be filed with the FDA at last a year in advance of such a release, and the FDA received no such application. Another rumor that hurt QCOR was that Novartis, which has a similar, lower cost gel approved in some markets overseas, was going to bring its product for approval in the U.S. However, to compete with QCOR, it would have to pay for 19 separate trials at an overwhelming cost. Far from being a "one trick pony," QCOR actually enjoys high barriers to entry, even though it specializes in one product. In addition, the gel is gaining increasing coverage from Medicaid and insurers and is popular with doctors. Cramer is bullish on QCOR.
Cramer took some calls:
Opko Health (NYSEMKT:OPK) is too speculative.
CEO Interview: David Pyott, Allergan (NYSE:AGN)
Allergan (AGN) has been a high-quality growth stock, but some fear that its momentum may be slowing with competition and has an excessively high valuation at 18.7. CEO David Pyott pointed out that growth was still 9.5%, close to its yearly average of 10%. There were some headwinds with a strong dollar and a slightly slower performance in its ophthalmology segment. The latter issue was "just a blip," according to Pyott, who sees a stronger second half of the year. Even with a slowing economy, the aesthetic side of the business showed record sales with double digit growth. AGN expects a stronger second half because one of its competitors was taken off the market by an injunction. Allergan's most popular product, Botox, has seen success as a treatment for migraines, and most recently, overactive bladders. AGN expects to get FDA approval for use of Botox for severe incontinence. While it may be hard to find a dip in the stock to buy, Cramer would pick up AGN on any weakness.
Did Chipotle Mexican Grill (CMG) announce any good news that justified its 24 point rally on Friday? What brought the stock up, even amid poor employment data and other macro worries, was the fact that Lululemon (LULU), another momentum stock, reported better than expected earnings. Add to that a strong quarter from Ulta Salon (ULTA) and an upgrade for Priceline (PCLN). Cramer urged viewers to think of momentum stocks as comprising their own sector, regardless of what they sell. These stocks tend to move up or down in tandem, as money managers move in and out of momentum stocks en masse. It also helps to look at the fundamentals; LULU rose on real data, its better than expected same store sales, and was not merely along for the ride.
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