Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday December 15.
CEO interview: David Cote, Honeywell (NYSE:HON)
Honeywell (HON) is a diversified industrial which has been showing positives in areas other companies have seen gloom. Guidance was in-line, but CEO David Cote was upbeat and said this is not a bad sign. Cote said he foresaw the weakness in Europe and planned accordingly. Cote said the company is going to be affected by cheap oil, but this may be offset by its exposure to refined products. Cote said he is considering M&A, the company has done 80 acquisitions in the last decade and has a "rigorous process" for buying companies. Cote thinks the economy will be strong for some time since the real recovery hasn't happened yet.
Are Things Really So Bad? PetSmart (NASDAQ:PETM), Riverbed (NASDAQ:RVBD), Cirrus Logic (NASDAQ:CRUS), Apple (NASDAQ:AAPL), Bob Evans (NASDAQ:BOBE), Twitter (NYSE:TWTR), Whole Foods (WFM), Marriott (NYSE:MAR). Other stocks mentioned: Alibaba (NYSE:BABA), Zoetis (NYSE:ZTS)
With the Dow falling 100 points, Cramer asked if things are really so bad? If things are so bad, why is PetSmart (PETM) being taken over on a premium and is one of the best deals of the year? The company had slowing same store sales and faced multiple downgrades. However, the company made a smart acquisition and caught a bid. Riverbed Technology (RVBD) is a "down and out networker" and is being taken private. The space is so crowded, but the buyers paid up for it. Cirrus Logic (CRUS) got an upgrade, and analysts talked about iPhone shortages, which is good for Apple (AAPL). Bob Evans (BOBE) soared on news that its CEO Steve Davis is departing, and the company might break up. Twitter (TWTR) has received some praise from analysts, even though the company has been challenged lately. Whole Foods (WFM) is likely to have an upside surprise despite competition. Marriott (MAR) also received an upgrade. Things are not as bad as the averages seem to be saying.
Cramer took some calls:
Alibaba (BABA) had too much hype going into Singles Day, and that was the peak. There is a Chinese slowdown as well. Alibaba is resting here.
Zoetis (ZTS) was up on a spike because of Bill Ackman's taking a stake. That was a good time to take some profits.
CEO Interview: Klaus Kleinfeld, Alcoa (NYSE:AA)
Alcoa (AA) provides an accurate read on the global economy. Management has announced the acquisition of German-based Tital. The latter provides materials for lighter weight aluminum, has exposure to aerospace, and its products are proprietary. This is the second acquisition this year, but the company is also growing organically. Alcoa is closing non-productive plants. CEO Klaus Kleinfeld is dedicated to making Alcoa a low-cost producer of proprietary aluminum. 3D printing is creating value for the company in cutting down the time and cost of making prototypes.
Cramer said it would make as much sense for the S&P 500 to go higher on cheap oil than lower, as it has been lately. Cheap oil is like a tax break and stimulus for the consumer. Most of the companies in the S&P 500 benefit from lower oil, even as oil producers will be hurt. The madness might end when stocks are so low that they aren't even impacted by oil. Then there may be a bottom.
Cramer took some calls:
Chesapeake Energy (CKE): Has too much debt not to be hurt.
Apache (APA): "Made some good moves that raised cash. It is not a buy yet."
CEO Interview: Burton Goldfield, TriNet (NYSE:TNET)
TriNet (TNET) came public in late March and surged 19% the first day. The human resources outsourcing play has given a 37% gain since Cramer spoke with CEO Burton Goldfield in May. TriNet helps companies outsource human resources paperwork and helps clients save money on benefits packages. "I am seeing more energy and vibrancy around small businesses than I have ever seen before." Small business owners are motivated "to get things done." The hospitality industry is "booming." The company provides human resources services for 10,000 companies in the U.S. Around 50% of TriNet's business comes from referrals. As regulations get more complex, TriNet's services see greater demand.
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