Cramer's Mad Money - The Case of General Mills' Missing Market Share (9/24/12)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday September 24.

The Case of General Mills' (NYSE:GIS) Missing Market Share. Other stocks mentioned: ConAgra (NYSE:CAG), Kellogg (NYSE:K), B&G Foods (NYSE:BGS), Tootsie Roll (NYSE:TR)

General Mills (GIS) reported that it was losing market share, but to whom? Both GIS and ConAgra (CAG) reported great quarters in spite of the recent drought and the effect on food prices. Both companies are handling raw costs well; GIS rose 2.5% and CAG rallied 6% after earnings. However, someone is taking market share in the cereal business, and Cramer thinks the culprit is Kellogg (K). The stock has been a laggard, but that means that it might be in for some upside, since these packaged good stocks tend to trade together. Kellogg's Pringles acquisition has been a success, with sales of the brand up 9%.

Cramer took some calls:

Tootsie Roll (TR) is a great stock to buy and not worry too much about. "TR is a winner."

B&G Foods (BGS) is a good company, but its stock has moved up tremendously.

Google (NASDAQ:GOOG) or Apple (NASDAQ:AAPL), Skyworks Solutions (NASDAQ:SWKS), NVR (NYSE:NVR), AIG (NYSE:AIG), Marsh & Mclennan (NYSE:MMC)

Google (GOOG) and Apple (AAPL) are two stocks sitting around the $700 mark, but price isn't everything. While Apple has a multiple of 13 and Google's multiple is 15, the multiple still doesn't tell the whole story. Cramer has been bullish on Apple for a long time, but he feels that finally Apple might be harder to own than Google. Apple is faced with incredibly intense scrutiny; only a few days after the release of the iPhone 5, some were saying that sales weren't strong enough, but on further examination, one obstacle to sales was that stores were running out of the hot product. Apple has risen 71% so far this year, and Google hasn't rallied so far that it seems ready for a fall. Cramer thinks it was not a good strategy for Apple to replace GoogleMaps in its newest iteration of the iPhone, and says Google has the advantage of not relying on the genius of one person. After Steve Jobs' passing, Cramer wonders how long Apple can keep delivering, since the company is still so closely associated with Jobs' genius. Cramer thinks Google is a better buy than Apple right now.

Cramer took some calls:

Skyworks (SWKS) may be down so low that it can be bought.

NVR (NVR) is an $800 stock that should have been split. Cramer thinks it is illiquid.

Marsh & Mclennan (MMC) is making a comeback, but Cramer prefers AIG (AIG), which is a buy anywhere between its current level and $40.

CEO Interview: Spencer Rascoff, Zillow (NASDAQ:Z)

Zillow (Z) is on a tear, up 98% on the resurgence of domestic housing. Zillow is facing some competition in the online real estate business, but Cramer thinks the company can prevail over its peers. The company has serious mindshare, and has a great strategy for mobile. The stock trades at a rich multiple of 64, but has a 40% long term growth rate. Zillow recently had a successful secondary offering.

CEO Spencer Rascoff said that housing has bottomed, but not equally in all areas of the country. Mortgage rates are low, and while it might be harder to secure a mortgage than it was in the era leading up to the housing crisis, there is more "moderation" and a return to the "good old days" when borrowers actually had to demonstrate the ability to pay. Rascoff said that Zillow is rated number one or number two in 19 out of 20 states in the online real estate market. Cramer thinks Zillow has the best story in the group, although he acknowledges that the multiple is high. "Go and listen to the conference call and make your own decision."

CEO Interview: David Jaffe, Ascena (NASDAQ:ASNA)

Ascena (ASNA) is a diversified retailer, with stores for pre-teens, women over 35, and now it has exposure to the plus-sized market, with the acquisition of Charming Shoppes. The company handily beat earnings estimates but gave conservative guidance, which caused the stock to drop before recovering. Ascena has risen 59% since Cramer got behind it last year. While the company took on significant debt for Charming Shoppes, Jaffe is confident that the acquisition will more than cover the expenses. Cramer is bullish on ASNA.


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