Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday, August 13.
It's as if the market did not already fear trade and tariffs, they have to worry about Turkey as well. Cramer thinks the Turkey currency crisis induced selloff is a buying opportunity for contaminated stocks. "Do not buy anything that can possibly be related to Turkey, at least not at first. That means you do have to stay away from the banks, and not just because bears will claim they're linked with Turkey. Contagion breeds a stronger dollar and that translates into lower interest rates, which mean weaker earnings for the banks," he added.
Cramer also said this crisis is not like the 2007-08 financial crisis as it's a country's problem that is not linked to the U.S. and is not systemic. Even before Trump's tariffs, the country was dealing with high foreign debt and inflation. The tariffs blew the lid. While Turkey's central bank is providing more liquidity, the Lira is still under pressure. This problem is similar to that of the Turkish crisis in 1993.
Investors should keep an eye and buy the following sectors on weakness - Tech: Alphabet (GOOG, GOOGL) and Amazon (NASDAQ:AMZN); Healthcare: UnitedHealth Group (NYSE:UNH) and Centene (NYSE:CNC); Domestic retail: Burlington Stores (NYSE:BURL), Ralph Lauren (NYSE:RL) and Kohl's (NYSE:KSS); Medical devices: Abbott Labs (NYSE:ABT), Baxter International (NYSE:BAX) and Intuitive Surgical (NASDAQ:ISRG); Domestic Telecom: T-Mobile US (NASDAQ:TMUS) and Verizon (NYSE:VZ).
The other sectors to keep an eye on are rails, cybersecurity, financial tech and gaming. All the high quality names are available at discounted prices.
CEO interview - Brink's Company (NYSE:BCO)
Pertz said that Dunbar is an old and well known company in the cash management business and the combination of it with Brink's will make it the largest company in the U.S. and will have cost synergies of $40-45M. "We're talking to some of the largest players there today to manage all of their deliveries, as well as their cash management of that," he added.
Despite being surrounded by online payments and cashless consumers, the cash business has grown 30% in the last 6 quarters. The company also benefits from cannabis legalization as in the U.S., marijuana dispensaries can only accept cash.
Pertz said management is putting together strategies to keep the growth rate up in the future. Cramer said he likes the company.
As travel grows globally, one expects travel stocks to do well. However, this was not the case with Booking Holdings (NASDAQ:BKNG). The company that owns Priceline has fallen 9% after it reported earnings and weak guidance. Its rival Expedia (NASDAQ:EXPE) reported a great quarter and the stock rallied 9%.
How can two companies have such varied results? The reason is differentiation. The problem with Booking started when CEO Glenn Fogel announced last November that the company is moving from online ads like Google to television as they found Google ads expensive. He admitted that growth would suffer in the short term. "In short, the earlier slowdown seemed to be abating and the big headwind everyone was worried about—a possibly misspent marketing budget—looked like a nothing-burger," said Cramer. But the company's last quarter report showed the weakness.
Cramer thinks the company doesn't know if it's a growth stock or a value stock. The trade wars and strong dollar are affecting the company as well and investors are not willing to pay as much for future earnings. The company also blamed the World Cup for decrease in travel.
Cramer called Expedia a better growth story even if it trades at 21 times earnings compared to 19 times for Booking. It's also easy for investors to understand.
The stock of Dropbox declined 6% after earnings, but Cramer said it had nothing to do with the company's fundamentals. The selloff is not a sign of trouble but a result of high expectations. The stock had rallied 14% going into the earnings but it cooled off after the report. The hot money exited the stock as soon as earnings were out.
It was a coincidence that the lockup expiration comes in two weeks and that added to the decline. As the company's revenue growth and margins remain strong, Cramer said he would be a buyer on weakness. It has a lot of growth left.
Viewer calls taken by Cramer
Air Lease (NYSE:AL): It's all over the map and the Chinese are cancelling orders from Boeing. This stock is not right for the current environment.
Caesars Entertainment (NASDAQ:CZR): Cramer believes Pinnacle Entertainment (PNKL) is a better pick as it has a better balance sheet and avoids a lot of issues with China.
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