Cramer's Mad Money - The Cash of the Titan (6/9/11)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday June 9.

CEO Interview: David Meyer, Titan Machinery (NASDAQ:TITN)

At a time when most sectors don't seem to be working, the agriculture bull market is alive and well. Corn futures are at a 3 year high, and farmers are increasingly on the lookout for high-quality low-cost equipment to increase their yields. Titan Machinery (TITN) owns and operates 81 full service stores on a local level, has control over its inventory and is making smart acquisitions. This $450 million company reported a beautiful quarter with an 18 cent earnings beat, a 54% rise in revenues and a 37% gain in same store sales year over year. The stock rose 12.2% on its earnings and was one of the best performing stocks on Thursday. The stock trades at a multiple of 17 with a 20% growth rate. David Meyer discussed the company's construction business which is in demand with increased flooding in the Midwest. The company's agricultural division is growing thanks to emerging market demand and ethanol production. He discussed Titan's strategy of buying up smaller concerns and consolidating.

Cramer called Titan the "intersection of every bull market"; oil, agriculture and industrials. He says he wishes it were lower.

CEO Interview: Dan Hesse, Sprint (NYSE:S). Other stocks mentioned: AT&T (NYSE:T), Verizon (NYSE:VZ), T-Mobile (OTCQX:DTEGY)

Sprint (S) may seem like the underdog, with the proposed merger between AT&T (T) and T-Mobile (OTCQX:DTEGY), but Sprint is primed for the battle, and its stock has risen 20% since the merger was announced in March, when Cramer recommended it. The company has seen very low churn, even as it has raised rates on some services and was rated the number one telecom for customer service and the most improved company of the year. Dan Hesse discussed the introduction of the 4G Motorola Photon, and says he sees both high and and low end products selling well. Hess has hope that the Justice Department and the SEC will stop the merger between AT&T and T-Mobile; "I think it is resonating in Washington." If the merger goes through, AT&T and Verizon (VZ) will take up 75% of the industry's revenues. While Cramer suggested Hesse ask for compensation if such a merger is allowed, Hesse was adamant that the merger is anti-competitive and should be stopped. Sprint may have a huge challenge ahead, but so far, it has been growing in spite of the threat.

Pharmasset (VRUS), Merck (NYSE:MRK), Vertex Pharmaceuticals (NASDAQ:VRTX)

There is more to great investing than picking strong stocks; investors need to know when to sell or buy more. Pharmasset (VRUS) is a prime example of a stock that has grown immensely, but should be treated with caution. This company has an innovative treatment for Hepatitis C, and on news of successful clinical trials, it has risen from $31.73 in October to $122.65, a stunning 287% run. VRUS's competitors in the Hepatitis space are Merck (MRK) and Vertex (VRTX); both companies have developed medications which cut the treatment time, but patients still need to take shots once a week that carry extreme side effects. VRUS is developing a treatment that will make these shots no longer necessary. However, even though the news seems to be good for VRUS, Vertex plunged $5 on Thursday on news of failed trials from another treatment; the same thing could happen to VRUS eventually, since it is a biotech and therefore a hostage to clinical trials and FDA approval. "People are too positive on this stock for my liking," said Cramer, pointing out that of 16 analysts covering VRUS, 15 have buys and only one has a hold rating. VRUS is a case in which discipline must trump conviction. Cramer told investors to take some off the table and let the rest run, and even with the house's money, he advised caution.


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