Segment 1: Squeezing Out Profits
Cramer reviewed comments from President Obama made today about investors in Chrysler, and said that he thinks these negative comments took the market lower today. He thinks this is a buying opportunity because companies are beating earnings estimates, even though it is due to lost cutting and lower estimates rather than sales increases. Cramer said that the only exception to this rule was First Solar (FLSR), which benefits from increased sales and lower costs. Companies like Starbucks (SBUX) and NYSE Euronext (NYX) were the norm because they reported better earnings due to cost cuts that were coming ahead of schedule, not because the company is doing better. He also said that Dow Chemical (DOW) and Owens-Illinois (OI) did a good job of increasing earnings by cutting costs, and he was wrong about both of these companies. He is pleased that companies are finding ways to make money even in this recession, and thinks that these companies will benefit when the economy turns around.
Cramer took phone calls on the following stocks:
L-1 Identity Solutions (ID): Cramer is bearish until they show that they have increased earnings.
Segment 2: Sell Block
Cramer said that an analyst put Watsco (WSO) in the Sell Block today by downgrading it, but he thinks that the analyst was completely wrong, so he is releasing it. Cramer is bullish on this heating and air conditioning maker because he thinks housing is going to bottom, the stock has a 4.6% yield, and that this is a good time to get in after this downgrade. Cramer said that the analyst thinks the valuation of the stock is too high because housing isn’t going to turn around, but Cramer thinks the earnings estimate is too low because housing starts are increasing, so this company’s products will be in demand again, and the P/E ratio will come down. Finally, he also thinks this company could benefit from a renewal of trade with Cuba. Because of all of these reasons, Cramer is bullish and disagrees with the analyst who downgraded the stock.
Cramer took phone calls on the following stocks:
Freeport McMoran (FCX): Cramer said this is another play on Cuba, but he likes it for its copper exposure.
Home Depot (HD): Cramer is bullish and said he hopes that the stock pulls back to $25 so he can buy more.
Sears Holdings (SHLD): Cramer is bullish because he thinks this stock will benefit from a crackdown on naked short selling, plus it will benefit from increased auto repair work as people keep their older cars.
Segment 3: Interview with Skyworks Solutions (SWKS) CEO David Aldrich
Cramer said that tech is one of the sectors that have been leading the market back from its lows, and this stock has doubled during that time. Cramer said that even he was surprised by this move, and he was more bullish than most people on tech. The company just beat earnings estimates for the last quarter, and gave guidance with strong earnings visibility for the next quarter due to its large backlog. Cramer thinks that you still have a chance to get into this stock even though it doubled because there are a lot of hedge funds that are still bearish on tech, and this company is growing at a fast rate. Cramer started off the interview by asking the CEO about Apple’s (AAPL) plans to start designing their own chips, and the CEO said that the chips that they design is very complex, and more companies are outsourcing it to them because ey are experts. Cramer then asked why their products aren’t a commodity like most other phone chipmakers, and Aldrich said that phones are becoming much more complex as more features are added to phones, and their designs are becoming more complex as well. Cramer then asked if there has been an increase in demand, and the CEO said that they saw a large inventory glut appear late last year which has now been worked off, and that they delivered strong growth even during that difficult time. Cramer then asked what they plan to do with all the cash they have on the books, and the CEO said they will figure out what to do with it down the road, but they are concerned with making as much money as they can right now. Cramer ended the interview by asking if any other phone makers are looking to do more design work in-house like Apple, and Aldrich said that most manufacturers are pushing the part of the phone that they work on out to suppliers, and they are happy to do the work. Cramer said that he is still bullish on this stock.
Segment 4: Lightning Round!
BP (BP): Cramer is bullish on this stock because he thinks the dividend is safe.
H&R Block (HRB): Cramer thinks this stock will turn around and make back its recent losses.
Capital One (COF): Cramer said this is risky and only works as a speculative play.
Becton Dickinson (BDX): Cramer is bearish because he thinks this stock has fallen out of favor, but said to wait for a higher price before selling.
Huntington Bank (HBAN): Cramer is bearish on this stock.
Cisco Systems (CSCO): Cramer is bullish on this stock, but said to wait for a pullback before buying it.
Green Mountain Coffee (GMCR): Cramer said to take profits since he thinks the recent rally is a short squeeze.
Aracruz Celulose (ARA): Cramer is bearish on this stock because he doesn’t think the dividend is safe.
Segment 5: Mad Money Mail
Cramer read emails from viewers, but didn’t make any stock picks in this segment.
