Stocks discussed on the in-depth session of Jim Cramer's Mad Money Program, Tuesday, March 8.
Home Depot had fallen to $111 at the beginning of February from $126. When Cramer dug deeper, he found out the company had mentioned that it would hire more than 80,000 workers for the spring gardening season. This number was bigger than last year in comparison and there was no negative news on the stock. The stock still went down as investors were worried about the European banks fallout. That was a buy signal. "If you stepped up around the time of the hiring binge announcement, you could have had a gigantic gain. But fear probably kept you out of it," said Cramer.
Verizon had a similar case. The stock fell to $44 from $47 over 3 days since the market was selling. The company's earnings seemed alright, but it had spectacular cash flow and customer churn rate. It yielded 3 times the Treasuries and rallied to $52 soon after.
Caterpillar, which was surrounded by negative news and was a play on China, had a different case. The company reported an unexpected earnings beat which Cramer interprets as the real deal since job cuts and cost cutting was paying off. This was a tough one, but a buy nonetheless. Cramer thinks the analysts will upgrade the stock as soon as they get a chance.
"Not every sell off is a buying opportunity. You just need to stay clear-headed so you can stop saying 'I missed it', and start screaming, 'I nailed it'," said Cramer.
Off the charts
With all the chatter about Netflix (NASDAQ:NFLX) killing cable companies, Cramer decided to take a technical view with the help of technician Tim Collins on Time Warner Cable (TWC). "When you look past all of the glib headlines about cord cutting and actually check out what is happening with the higher quality cable stocks, it is clear that we are dealing with a very different story. Reports of cable's death have been greatly exaggerated," said Cramer.
"When you actually look at the monthly chart of a stock like Time Warner Cable, it is very clear that when it comes to the death of cable, these guys obviously haven't gotten the memo," said Cramer. The shares are near all-time highs.
The RSI and volume indicators show a bullish and stable pattern. The MACD indicator on the weekly chart turned bullish 3 weeks ago after consolidating briefly. The last 3 pullbacks have happened in a single month's time and the previous ceiling of resistance becomes the new floor of support.
The Force index which measures the strength of the direction also shows bullish indicators. The stock is set for another up move and could hit $225 which means a 16% gain. Collins thinks the stock could get there by the end of March. There would be concerns if the stock goes down below the current floor of support at $190.
In Collins' view, based on charts of large-caps, the chatter about death of cable is overdone.
New era of stocks
Cramer has seen a pattern in stocks, which he thinks is the new era. "This is an era where we forgive and forget, and then take advantage of changes that management has made that are working," he added. Down might not necessarily out.
Take the case of Urban Outfitters (NASDAQ:URBN) that reported better than expected earnings at a time when investors had already discounted them and were expecting poor earnings. The stock rallied 16% as the company was able to transform itself into more of a home goods store.
J.C. Penney (NYSE:JCP), on the other hand, has started giving customers what they want. Their categories such as handbags, footwear and Sephora have all outperformed. These companies have figured out the customer's demand and are reinventing themselves. The gains in their stock price are a signal that the market is willing to forgive and forget.
Lastly, Whole Foods (WFM) is also beginning to show changes with new loyalty programs and small stores. "The guys at Whole Foods clearly believe that their stock deserves to go higher, and I can't say I disagree with them," said Cramer. The stock at current levels is what Cramer expected it to be when the company reported a good quarter after a long time four weeks ago.
"Urban Outfitters, J.C. Penney and Whole Foods remind us that nothing is static in this market, and smart changes will be rewarded with higher share prices, just as they should be," concluded Cramer.
CEO interview - CyberArk (NASDAQ:CYBR)
After being beaten down so much, is it time to look at high-growth cyber-security stocks again? CyberArk is the Israeli cyber-security firm that helps companies protect privileged and administrator accounts which are the usual targets for hackers. Their stock is 50% off from its all-time high and is slowly moving higher. Cramer interviewed CEO Udi Mokady to find out more about the company's prospects.
Mokady gave the example of Home Depot's $13M settlement of its high-profile security breach. He said that companies do not want such a kind of negative publicity. "What we are seeing is increased demand because customers really want to make sure that they control their network. That their secrets don't leak out, their customer information doesn't come out. And 2015 actually showed some very big data breaches," added Mokady.
He said that CyberArk is all about preventing threats to privileged accounts not only from hackers but insiders as well. Commenting on growth, he said that all companies run their business on IT infrastructure and hence they need protection. The growth opportunities are unlimited.
Pin action in stocks
The reality is that these stocks are not related apart from being in the cloud business. In fact, the more related company to Tableau is Splunk (NASDAQ:SPLK) which just reported good earnings and its stock rallied 8%. This goes to show that Tableau's issues don't go beyond itself.
Sometimes, the pin action is not justified and can be used to take advantage of unrelated weakness in stocks.
Viewer calls taken by Cramer
AstraZeneca (NYSE:AZN): The company is in the middle of a change and yields are good.
Enbridge Energy Partners (NYSE:EEP): Their yield is not sustainable. It's too risky.
Microsoft (NASDAQ:MSFT): The stock is a buy around $50.
SolarCity (SCTY): They are a concept name and are without traditional earnings. Cramer would much rather buy First Solar (NASDAQ:FSLR) based on earnings.
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