Segment 1: Game Plan
Cramer said that the came back today because hedge funds ended selling at 3 PM, and that allow people to react to the OK employment numbers and the good earning reports and dividend hikes coming from a lot of companies. He thinks this will continue next week as the market rallies. Here’s what he wants to watch next week.
Monday: CVS Caremark (CVS) reports earnings and Cramer said he will recommend it if they execute. Vulcan Materials (VMC) reports earnings and it will give us an idea of the impact of the stimulus this year. Electronic Arts (ERTS) reports earnings also, and Cramer said that he thinks people will get behind the stock like he has after they report.
Tuesday: He wants to listen to the reports from Coca-Cola (KO) and Walt Disney (DIS) because they are two of the best run companies out there, and he said he would buy one of them if the market drags them down that day.
Wednesday: L-1 Identity Solutions (ID) reports, and Cramer will give his final verdict on the stock after being disappointed so many times. Sprint Nextel (S) also reports, and he would buy it if the stock turns around. Discovery Communications (DISCA) reports, and Cramer is bullish because cable is hot, and this is a pure play.
Thursday: Marriott (MAR) reports earnings this morning, and Cramer is bullish because they reinstated their dividend. Treehouse Foods (THS) reports, and Cramer is still bullish on this stock. Fluor (FLR) reports earnings, and Cramer is bullish on this stock as well. Viacom (VIA) also reports, and Cramer wants to watch the report from this cable stock as well because he thinks it is undervalued. After the close, Panera Bread (PNRA), Cheesecake Factory (CAKE), and Chipotle Mexican Grill (CMG) all report, and he wants to see how optimistic consumers are about spending money in these restaurants. PNRA is his favorite company, but he warned that the stock might have run too much.
Friday: Ultra Petroleum (UPL) reports earnings, and Cramer said that he wants to buy this stock in front of the report because the stock has been beaten down and he believes in their natural gas holdings.
Cramer took phone calls on the following stocks:
Cypress Semiconductor (CY): Cramer is bullish on this stock because it keeps beating earnings estimates quarter after quarter.
Bank of Hawaii (BOH): Cramer is bearish because the economy is Hawaii is terrible.
Segment 2: Interview with Aviat Networks (AVNW) CEO Harald Braun
Cramer recommended this stock back in September when it was called Harris Stratex Networks as a way to play the networking shortage as demand for bandwidth increases, but the company reported a terrible quarter this week where the stock missed on revenue. He wants to find out if demand for their products is weaker than expected, or if it is just an issue of deals taking longer to close than expected. Here is a summary of the interview.
1. Cramer asked for an explanation of the quarter they just reported, and the CEO said that their shipments and bookings were good, but accounting rules didn’t allow them to take all of that as revenue, which led to the shortfall.
2. Cramer asked why they don’t seem to have as much demand as their competitors, and the CEO said that they work on complex deals with major telecom networks that take several quarters to close.
3. Cramer asked why they didn’t make this clear on the quarterly call, and the CEO said that they explained how strong bookings are, that the lower revenues are due timing issues, and they didn’t give strong guidance going forward because they can’t be sure about the timing of their new deals.
4. Cramer asked why investors should stick with this company, and the CEO said that he thinks the load of demand is still a quarter or two away.
5. Cramer asked if they have any plans for the $2 per share in cash they have on hand, and the CEO said that they are changing the company from an excess bandwidth play to a core connection play, including a deal that they made in India where they can serve 22 regions.
6. Cramer asked for a new timeline now that revenue estimates are lower, and the CEO said that he thinks we will see mobile operators expanding their network in the second half of 2010.
Cramer ended by saying he is going to hold the CEO to that timeline, and he wants to wait and see how the company does later this year.
Segment 3: Speculation Friday
Because of the success of Avatar, Cramer thinks that 3D movies will be the next trend in movie theaters. He believes that theaters will push this technology because it will allow them to have an advantage over watching DVDs and home, and that it will be as big as the move from silent pictures to talkies and black and white to color. He is calling this trend the 3D typhoon, and he thinks the best stock to speculate on this change is Cinemark Holdings (CNK). He said not to buy the stock when a caller asked about it last Thursday, but he changed his mind after doing some more homework. The company is the 3rd largest movie operator in the U.S. with over 3842 screens, and 373 3D projectors deployed worldwide. The stock also has a 5% yield. Cramer pointed out that revenue from 3D screenings is expected to grow from a little over $1 billion to $9.4 billion in the U.S. and there are more potential blockbusters being filmed in 3D to help meet those growth expectations. He likes a theater operator as the way to play this trend because 3D ticket prices are $3 more expensive than regular tickets, these companies are already doing well in the current environment, and new trends in movie viewing will draw more people to movies. They also have an IMAX alternative called XD with a lot of growth potential. The company is also the number one chain in Brazil with a lot of other Latin American exposure, has a great balance sheet, is expected to get financing from the studios to roll out new 3D technology, and the stock’s P/E ratio of 15.8 is below its historical level of 20. He ended by warning that this is a long-term trend, so there is no reason to go out and jump in the stock on Monday, and said that you should do your homework and buy in chunks using limit orders.
Cramer took phone calls on the following stocks:
CoinStar (CSTR): Cramer said that he got that one wrong, and Netflix (NFLX) was the right pick.
Best Buy (BBY): Cramer is still bullish on this stock.
Segment 4: Lightning Round!
XTO Energy (XTO): Cramer is bearish on this stock because Obama refuses to promote natural gas and people are concerned about their fractured drilling technology.
Neutral Tandem (TNDM): Cramer is bearish on this stock because their products are commodities.
Citigroup (C): Cramer is bullish on this stock because it is priced below book, he thinks the CEO is doing a good job, and he likes their international business.
Stillwater Mining (SWC): Cramer is bearish on this stock and said you should own the Gold ETF (GLD) instead.
Toyota Motor (TM): Cramer wants to stay away from this stock because it could go up $10 or down $10 so he recommended Ford (F) instead.
Segment 5: Outrage of the Day
Cramer is outraged that Air Products (APD) made a $60 per share takeover offer for Airgas (ARG) and hopes that it is not successful. Cramer thinks that the price is too low for ARG and that combining the companies would be anticompetitive. He thinks that ARG shareholders would be better off if the company remained independent because he believes in ARG’s CEO.
