Segment 1: Time to Pull the Trigger
Cramer said that it is time to buy Apple (AAPL) because the iPad hype is going to begin as it becomes commercially available, and all of that press will send the stock higher. Also, Apple is going to start their ad campaign for the product next week, it is not attached to any cellular carrier, and there appears to be real corporate demand for this product, which is a new market for Apple. He pointed out that the current stock price is only 13 times 2011 earnings because the company has $43 per share in cash, and it has great growth prospects. He thinks this is a great opportunity to get into this stock before everyone else jumps on the iPad train, so you need to buy it now.
Cramer took phone calls on the following stocks:
Cisco (CSCO): Cramer is bullish on this stock because it is cheap.
First Financial Bancorp (FFBC): Cramer likes First Merit (FMER) and Huntington Bancshares (HBAN) better.
Segment 2: Interview with Eaton (ETN) CEO Sandy Cutler
Cramer said that ETN is up 46% since he last recommended it in July, but the company’s management is still bullish as it grows revenue at 12% - 14% annually by increasing its sales overseas, the company has plenty of earnings to cover its dividend, and they think that the economy is going to keep improving for the next 4 – 5 years. Cramer wanted to talk to him about what is making this company successful and see what risks there are for investors. Here is a summary of the interview.
1. Cramer asked how they were able to prepare for the recession and also keep growing, and the CEO said that they had a terrible second half last year, but the future looks strong as the economy recovers, they move into more international markets, and they benefit from improvements to their cost structure.
2. Cramer asked about their earnings visibility and optimism about 2012, and the CEO said that their visibility has gone from a less than a month to several months because of higher demand in Asia and other markets.
3. Cramer asked about ETN’s investment in research and development, and the CEO said that they didn’t cut back on R&D spending last year, which will allow them to have solutions that their customers need.
4. Cramer asked if they should be viewed as a energy conservation company, and the CEO said that their products are used by almost every part of the energy sector.
5. Cramer asked about their business in China, and the CEO said that they have 10,000 employees there, and their products are in high demand in that country as their build their electrical grid and highways.
6. Cramer asked if the company regrets their investments in Europe last year, and the CEO said that it is the weakest economy in the world right now, but he doesn’t regret the acquisitions the company made because they allowed ETN to sell more products around the world and should add $0.30 to their earnings this year.
7. Cramer asked if they will raise the dividend this year, and the CEO said that they had record cash flow last year and have a history of increasing their dividend.
Cramer ended by saying that he believes in this CEO and is still bullish on this stock.
Segment 3: Sell Block
Cramer said that Transocean (RIG) reported a terrible quarter last week, so he put it in the penalty box for now because it is a weak stock in the oil services sector. However, he likes that sector, so he wants you to sell RIG and buy Weatherford International (WFT). He is bearish on RIG because it couldn’t control costs, but the company said that demand for their services is still strong, so better stocks in the sector should do well. WFT is the top company in directional drilling, has a very diverse customer base, has strong growth prospects, and could be a takeover target.
Cramer took phone calls on the following stocks:
Buckeye Partners (BPL): Cramer likes Kinder Morgan Partners (KMP) and Enterprise Product Partners (EPD) better because of their higher growth rates and higher dividend yields.
URS (URS): Cramer said that this is his favorite nuclear play.
Segment 4: Lightning Round!
Sequenom (SQM): Cramer said that this stock is too risky for him, and he would like to have the CEO on the show to find out more about it.
Force Protection (FRPT): Cramer is bearish on this stock and said it is too risky.
TiVo (TIVO): Cramer said the stock moved up huge today because they won a big lawsuit, so he would rather wait for it to pull back before buying a position.
Celera (CRA): Cramer is bullish on this diagnostic sector and recommended buying this stock.
U.S. Natural Gas Fund (UNG): Cramer said this ETF is one of the worst securities in history, and he said you should own something like Devon Energy (DVN) if you want natural gas exposure.
Warner Chilcott (WCRX): Cramer is bullish on this stock.
Segment 5: Pin Action
Cramer said that Altera (ALTR) raised its guidance after reporting a strong quarter yesterday, and Marvell Technology (MRVL) reported a disappointing quarter today, so he is looking for a stock that could be knocked down by MRVL tomorrow. He recommended buying Xilinx (XLNX) because the company reported a strong quarter, had a bullish analyst day a couple weeks ago, and the stock should be down tomorrow morning along with MRVL. He has been bullish on this stock for a long time as a mobile internet tsunami play, and he wants to stick with it even as it approaches its 52 week high. The company has 14% growth, is increasing its profit margins, trades at only 14.7 times earnings making the stock cheap, and it is one of the few tech stocks that pays a dividend.
