Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday February 28.
While Cramer devoted a segment to discussing earnings for the week ahead, much of the earnings news will be colored by the non-farm payroll number on Friday, which is looming large. There have been 2 poor jobs numbers in a row, and while there was some forgiveness for the last one, given the weather, 3 bad reports in a row could consolidate the trend of sector rotation from industrials and cyclicals to defensive, consumer goods stocks. Cramer discussed the earnings for the coming week:
Ascena (ASNA) may rally on poor numbers, as have many other retailers.
SolarCity (SCTY) is working on a revolutionary new battery and is overly shorted. Cramer thinks it goes higher.
AutoZone (AZO) is a play on frugality, as consumers prefer to have their cars serviced to buying new vehicles. The company has an aggressive buyback strategy and has been a terrific buy on weakness. If it drops after earnings, Cramer would "snap it up."
Joy Global (JOY) is in the ailing coal sector, and Cramer expects it to disappoint.
Kroger (KR) is the best of the traditional supermarkets, but supermarkets are suffering.
Costco (COST) is a stock that flew up before Cramer could buy it for his charitable trust. If it declines ahead of the quarter, Cramer would pick some up. This is a stock that tends to transcend macro weakness.
Foot Locker (FL) is in the sweet spot of the thriving athletic shoe industry. If a weak employment number hits FL's stock, Cramer would buy some.
Cramer donned a tuxedo to present the "Golden Bull Awards":
Best Director: CEO, Bob Iger, Disney (DIS): Disney rose 55% last year and 6% so far in 2014. Disney is making winning acquisitions and has released blockbusters as well as consistent earnings results. ESPN is a winner, and Disney's theme parks are going strong. Cramer would wait for a pullback before buying.
Best New Company: Zulily (ZU) is an ecommerce play that offers daily deals for parents with small children. It spiked 37% the first day and reported a winning quarter which saw a doubling of revenues. The stock rose another 36%; those who bought it in the aftermarket have seen an 81% gain. Cramer would ring the register on some of the position, but would buy on a pullback.
Best "Editing": Beam (BEAM)
Beam (BEAM), which is being taken over by private Japanese company Santori, wins best "editing." Beam used to be Fortune Brands, which "edited" out its golf and home security business and transformed itself to the liquor company Beam. This spin-off created massive value for the company, which has doubled in value since it sold off its other segments and focused on liquor. While it is not worth buying Beam now, it is worthwhile to be on the lookout for profitable spinoffs.
Lifetime Achievement: Retired CEO of EOG Resources (EOG), Mark Papa
Mark Papa retired as CEO of EOG Resources (EOG) in July, 2013 and transformed EOG into a major American oil company which benefited greatly from new discoveries. The company is still growing strong, and recently reported a 40% increase in oil production.
Viewers' Choice For Best Picture: Facebook (FB)
Based on a vote by viewers, Facebook (FB) wins for "best picture." Cramer's other candidate would have been Chipotle Mexican Grill (CMG). FB is the king of social, mobile, cloud and connectivity, and FB's advertising has huge demand. FB has grown revenues by 62% and gross margins by 580 basis points. Many were shocked by the $19 billion FB paid for WhatsApp, but Cramer thinks the text service will be a long-term positive for Facebook. While it trades at a multiple of 41, this seems not quite expensive, given its 32% growth rate.
Cramer took some calls:
Dupont (DD) is making the transition from commodity to proprietary chemicals and could trade into the $70s.
PPG Industries (PPG) reported strong earnings with healthy cash flow, an aggressive buyback and gave solid guidance. However, it was sold off mercilessly because of global macro worries. Last week, Home Depot (HD) gave a positive report, and said that paint sales were robust. PPG, which makes paint, rallied. Eaton (ETN) was also sold off, despite its strong earnings. Cramer thinks this sell-off in Eaton is also unfair, and it might be a buy.
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