Cramer's Mad Money - The Next (10/8/12)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday October 8.


Cramer discussed the upcoming IPO of Workday (WDAY) which is a highly-anticipated IPO. He believes the company is reminiscent of (CRM), since it saves companies money by offering cloud-based services to handle payroll and employee expenses. This means that Workday’s clients no longer need expensive servers. The company has 340,000 customers, and its revenues increased by 98%. Although Workday has seen some losses, the company is investing in its business and cutting costs. Cramer thinks Workday should have a significant first day spike and might even rise after. Cramer thinks a reasonable price for the company would be 18 times sales. It might be hard to get shares of Workday, but Cramer would be careful about buying it in the aftermarket; he wouldn’t suggest paying more than $27.50 a share.

Momentum stocks Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG), Netflix (NASDAQ:NFLX)

While it might seem like an old story, Amazon (AMZN) is still the top momentum stock, as it continues to bury brick and mortar retailers. With the Kindle, its cloud-based business and 28% rise in revenues, Amazon is still a momentum winner. Google (GOOG) may be another obvious pick, but Cramer thinks it is still a good one. Google is dominating in mobile, and almost half of the smartphones in the U.S. run on Google’s operating system. Google’s mobile display ads have 51.56% of the market, and the company has no debt. Even though the stock is at $758, it is still cheap, with a multiple of 20 and an aggressive growth rate.

Cramer took some calls:

Netflix (NFLX) is a stock Cramer thinks is not worth the risk.

CEO Interview: Edward Aldag, Medical Properties Trust (NYSE:MPW)

Medical Properties (MPW) has a high yield, but it has been a challenged stock. The company, like many other investment trusts, had to lower its dividend, but now Medical Properties’ distribution is being covered by funds from operations. The company also made some significant acquisitions. The CEO, Edward Aldag, discussed the company’s strong and growing cash flow and the $1 billion in capital the company raised. The CEO said the election won’t impact the company, regardless of who wins. Medical Properties is the only publicly-traded REIT that focuses exclusively on hospitals, and its recent acquisitions are paying off. Edward Aldag said the distribution could reach 7% in the near future, which would be a 75%-80% payout range. Cramer says he has confidence in the dividend.


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