Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday, June 8.
The trading session on Friday was silent after what was an otherwise successful week. The coming week will determine if the rally will continue as there are few earnings but because of the President and the Fed. Don't trade around Trump's tweets in the coming week. "Think of it this way: we've had the best action in three months for the Dow and that occurred ahead of the Fed meeting, ahead of the G-7 meeting and ahead of the North Korean summit. Worry has not been paying off here," said Cramer. With that, he discussed the game plan for the week.
Earnings: RH (NYSE:RH)
Cramer expects good earnings from RH. "Frankly, I think we're witnessing a once-in-a-generation retail and apparel accouterments bull market, where these companies report good numbers and their stocks go up for three or four or five days, rather than just one or two. I bet Restoration Hardware experiences something similar," he said.
The G-7 summit starts on Monday. These summits do no mean much for the market but considering the trade war tensions, it's an event to be watched closely. If there is good news from the US allies, it would mean well for the overall market.
North Korea summit takes place on Tuesday. "Nobody really expects anything big to come out of it. If something does, I believe the stock market will be ebullient but, again, the odds are slim," said Cramer.
A court ruling on AT&T (NYSE:T) & Time Warner (NYSE:TWX) attempted merger will be out. In Cramer's interview with Assistant Attorney General for Antitrust Makan Delrahim, he found out that Delrahim believes the consumer will be the loser if the deal goes through. "More important, he talked about being a powerful antitrust enforcer, more powerful than his predecessors, which suggests to me that he might keep trying to block this merger even if he loses on Tuesday," he added.
Comcast (NASDAQ:CMCSA) could bid for the media assets of Twenty-First Century Fox (FOX, FOXA) on Wednesday. "Assistant AG Delrahim had positive things to say about how Disney's approaching the deal, cordoning off things that might make the transaction more problematic for the regulators," said Cramer.
The Fed's meeting on Wednesday will be important with a potential rate hike. "I'll say this: if the market takes this well-telegraphed rate hike poorly, that might be another chance to do some buying into weakness," he added.
Cramer expects good numbers from The Michaels Companies, but Jabil could have a tough quarter.
Centene (NYSE:CNC) will hold its analyst meet on Friday. Cramer expects them to give good guidance considering their recent acquisition. "That said, Centene's had a monster move and I think it may be too late to buy it, at least for the moment. Nonetheless, the meeting will be positive."
CEO interview - Oath
Cramer interviewed CEO Tim Armstrong of Oath - the digital media subsidiary of Verizon (NYSE:VZ) that was formed after the acquisition of Yahoo. Armstrong is the former CEO of AOL.
Armstrong spoke about Verizon's new CEO Hans Vestberg, who joined the company one year ago as the CTO. He added that 5G is important to the company as it will bring 10 times more speed than offered today. It will enable augmented and virtual reality on a massive scale.
Armstrong said that 5G will make Oath the largest media company connecting directly to consumers. "For our business, 5G represents a really quantum shift. 5G is going to bring an enhancement that will feel like AR-VR-type-level content and services. It's more speed, but it's also amazing amounts of compute power for us to do different types of content," he added.
Oath has $8B in revenue and 13,000 employees. They don't have the capital to spend on original content like Netflix but Verizon's presence will help Oath get its original and branded content to consumers.
There are 3B people connected right now and another 3B are expected to be connected. "If we can be the first company to bring trusted brands to that size audience overall, that represents an unbelievable opportunity for us as a business and that's what our global team is really excited about," concluded Armstrong.
Five Below (NASDAQ:FIVE)
Cramer had expected good numbers from Five Below and they did not disappoint. They reported good guidance and the stock is up 41% in the last week.
The analysts could not anticipate the strength of Five Below. The company has 650 stores in 32 states and they aim for 750 stores by the year end with 2,500 stores a long-term plan. This signifies the stock has more room to run.
Cramer said that the company's national expansion has been great as they know their target audience and they have an effective social media presence. The company's gross margins are expanding too. There were lots of short-sellers in the stock and almost all of them have covered their positions which led to the huge spike in stock.
The stock is now vulnerable to short-term volatility as it has run up a lot. Cramer cautioned investors against buying at current levels. Wait for the next market-inspired weakness to buy it.
Off the tape
Cramer went off the tape to review the privately held Houzz, a technology company that is using augmented reality to help consumers visualize furniture and decor in their home. Cramer interviewed CEO Adi Tatarko to find out more about the company.
Tatarko said their app 'View in my Room 3D' lets users put virtual items in their rooms at any angle using their devices' cameras. It allows users to put multiple products into their rooms to see how they'd look together. "We're very proud as a technology company that we can always be in front of the best technologies and apply them very deeply into our own industry," she added.
Since the introduction of the tool last year, over 2M people used it in order to make decisions for re-modeling their home. "These people were 11x more likely to purchase the product and materials that they saw using this technology," said Tatarko.
The company has two revenue models. They have 1.6M professional designers and remodelers that pay a subscription for local exposures to homeowners and they also have a database of 60M images attached with data and tagged with materials they contain which is linked to 20,000 vendors.
Viewer calls taken by Cramer
International Game Technology (NYSE:IGT): The company is doing fine but there is a lot of hot money in it. The downside is overdone.
Denbury Resources (NYSE:DNR): Oil is likely to go down. Cramer is not a fan as the stock has moved up a lot.
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