Segment 1: Selloff Strategies
Cramer said that days where everything goes down at once like today are not logical, and it reminds him of all of the hedge fund going wild in 2008 when they had to sell off everything they owned and drove down the entire market to very low valuations. He thinks this could go on for a while, so he wants to look for accidentally high yielding stocks like Kimberly Clark (KMB) and Altria (MO), and stocks that were down even though they have strong fundamentals like Visa (V) and Cisco (CSCO), and treat their declines as a gift.
Segment 2: Interview with Allergan (AGN) CEO David Pyott
Cramer said that you have to wonder how good any stock that went up today must be, and this company’s strong cosmestic surgery and eye care business look strong. He is particularly interested in AGN’s eye business because there have been 2 big deals in the eye care business recently that would value AGN’s eye business at $9.3 billion, which means that the entire company is greatly undervalued. Cramer said that he wants to talk to the CEO on a down day like today to see how their company is doing. Here is a summary of the interview.
1. Cramer asked if people have stopped spending money on their appearance to save for necessities, and the CEO said that is not true because their botox and breast implant sales have stayed strong, while their other medical businesses are also doing well.
2. Cramer asked if they should consider spinning off their eye care business because it is undervalued, and the CEO said he has been pointing out that it is undervalued to investors, but that he feels like it is a good fit within their company.
3. Cramer asked if new competition for Botox is going to hurt their margins, and the CEO said that this new drug in the U.S. has been in Europe for the last few years, and Botox has had a lot of success competing in that market, but they are keeping an eye on the market and they take their competition seriously.
4. Cramer asked about the Botox tax that was proposed in Congress and how they avoided its inclusion in the healthcare reform bill, and the CEO said that they organized their customers quickly and were able to convince Congress that including this law would be a bad idea.
5. Cramer asked how their Latisse eyelash enhancement product has been performing, and the CEO said that they had $74 million in sales with growth in each quarter, and they have a target of $500 million in global sales because it is a simple product and it appeals to all age groups.
Cramer ended by thanking the CEO for making money for shareholders and continuing to run a strong company.
Segment 3: Interview with Novellus (NVLS) CEO Rick Hill
Cramer said that he likes this company because semiconductor companies are doing well, and when that happens, they spend money on semiconductor manufacturing products that NVLS makes. The company reported a better than expected quarter last night, but the stock was down 4.4% today. He thinks that demand for semiconductor products will remain strong because of increasing demand in the developing world, Windows 7 sales, and IT security spending, with much of the demand coming in the second half of 2010. Here is a summary of the interview.
1. Cramer asked what a semiconductor equipment manufacturer makes, and the CEO said that they either spray down a wafer with paint, etch off paint, or clean a wafer, and a semiconductor cannot be made without a product like theirs.
2. Cramer asked about their competition and their ability to take market share, and the CEO said that there is a lot of competition in any growing market sector, but they have continued to take market share with their products.
3. Cramer asked why investors should not give up on this stock when the market is down huge like it was today, and the CEO said that this is a best opportunity for the semiconductor sector since the mid 1990s because Windows 7 is driving a IT refresh, governments are spending on technology security, and consumers are buying gadgets at a high rate, especially in China.
4. Cramer asked about the slowdown in China, and the CEO said that they are trying to slow down the housing market and avoid a bubble, but consumer demand has hit China.
5. Cramer asked about the similarities between the mid 1990s and now, and the CEO said that the driver then was the fear of Y2K, the Internet buildout, and PCs in the home, and the drivers now are wireless infrastructure buildout and the fear of terrorists.
Cramer ended by saying that this company is integral to internet security and the mobile internet tsunami, and they just happened to report a great quarter on a huge down day, so he is bullish.
Segment 4: Lightning Round!
Burger King (BKC): Cramer said that they had a good quarter and the company looks it is turning things around, but he likes McDonald’s (MCD) better because of its international business and dividend.
MICROS Systems (MCRS): Cramer said that this is too much of a niche play for him, and he would rather own Cisco (CSCO).
Allied Irish Banks (AIB): Cramer is bearish because this stock is too risky and he would rather own Citigroup (C).
Campbell Soup (CPB): Cramer said this stock is OK, along with Hershey (HSY) and Heinz (HNZ), but none of them have growth, so he would rather own Proctor and Gamble (PG).
Green Mountain Coffee Roasters (GMCR): Cramer said to buy this stock because it was down $3 today.
Frontier Communications (FTR): Cramer is worried because the dividend yield is up to 13%, and said he would rather own Windstream (WIN).
Segment 5: Interview with Waste Management (WM) CEO Larry O’Donnell
Cramer said that he likes to look for new investing ideas on down days like this one, so he looked at WM as a natural gas play in addition to its trash collection business. He likes the company’s waste collection business and the 4% yield on the stock, but he also likes that the company’s landfills put off enough natural gas to power 400,000 homes, and they use natural gas to run 425 of their trucks, which saves them $7000 per year per truck. Cramer wanted to get an update on the company. Here is a summary of the interview.
1. Cramer asked how the company makes money while protecting the environment, and the CEO that that they want to do things that create value, like capturing gas from their landfills or recycling.
2. Cramer asked about their success using natural gas to power their trucks, and the CEO said that it has worked out very well, and they save money by using natural gas, even though the maintenance costs are higher on those trucks.
3. Cramer asked how the company is doing, and the CEO said that they are in a quiet period right now, so he can’t talk about it.
4. Cramer asked about the CEO’s appearance on the show Undercover Boss and employee relations at the company, and the CEO said that he was not very good at the job on the show, they made some changes because of what he learned during the show, the company and employees have been working together to make it through the recession, and the company was able to save $120 million last year because of employee suggestions.
