Segment 1: Drags on the Market
Cramer said that there are a few stocks that are holding the Dow back from breaking through the 10,725 level that is acting as resistance right now. Those stocks are American Express (AXP), Exxon Mobil (XOM), Chevron (CVX), IBM (IBM), Coca-Cola (KO), Pfizer (PFE), Microsoft (MSFT), AT&T (T), Verizon (VZ), and Alcoa (AA). He added that Cisco (CSCO), McDonald’s (MCD), and Bank of America (BAC) are hot right now, and he thinks that these other laggards can start moving higher and push the Dow over the 10,725 level.
Segment 2: Interview with Tanger Factory Outlet Centers (SKT) CEO Steve Tanger
Cramer asked why so many commercial REITs are near 52 week highs when commercial real estate is supposed to be the next financial catastrophe, and pointed out that SKT is one of those REITs. SKT owns 31 outlet centers in 21 states, reported a good quarter in February, yields 3.5%, has high, stable occupancy rates, has a great balance sheet, and is benefiting from a trend towards shopping in outlet malls and retailers promoting their outlets more. The only downside is that the stock is a little expensive at 15.8 times earnings, so he wanted to talk to the CEO to find out if that valuation is justified. Here is a summary of the interview.
1. Cramer asked about the quality of stores in their outlets now, and the CEO said that they have Saks, Kate Spade, Nieman Marcus, Juicy Couture, and other high quality brands.
2. Cramer asked if they are concerned about people avoiding their regular stores to go to the outlets, and the CEO said that they are 2 different distribution channels.
3. Cramer asked about their locations at beach resorts, and the CEO said that they like them because they are stable, and people will go shopping if it rains at the beach.
4. Cramer asked if the company is seeing any problems in commercial real estate, and the CEO said that they haven’t seen any problems because people are coming to outlets more than ever during this recession, and they have never had a year with less than 95% occupancy.
5. Cramer asked about their growth rates, and the CEO said that they are building a new center in North Carolina, and another one in Hilton Head.
6. Cramer asked about competition from other REITs in the sector, and the CEO said that the sector is consolidating.
7. Cramer asked if they plan to do any deals with the FDIC, and the CEO said that they would rather buy high end properties than the junk on the FDIC’s balance sheet.
8. Cramer asked if they will raise the dividend this year, and the CEO said that it is up to the board, but they have raised it every year since 1993.
Cramer ended by saying that he thinks the stock is going higher.
Segment 3: Off the Charts
Cramer thinks that a rally is coming in the financial sector, so he looked at the chart of the Financial Select Sector SPDR ETF (XLF) to see if technical analysis shows anything. He said that the ETF had an island reversal in October where the stock gapped up and then gapped back down, which is a very bearish signal because the island becomes a strong resistance point. However, if you look at the weekly chart, you can see that the ETF has been building a floor at $13.50 and is pushing against resistance at $15.30, and it will eventually move off of that floor and move through the resistance level created by the island. The technical analyst that Cramer talked to about this ETF wants to wait for it to break through its long term resistance at $16.01 before buying, and he placed a price target of $20.21 on the ETF. Cramer agrees with the target price, so he wants to get into the sector now, while the ETF is lower than the analyst’s buy price. He would rather buy JP Morgan Chase (JPM) than XLF because he thinks it is best of breed.
Segment 4: Lightning Round!
Range Resources (RRC): Cramer is bullish on this stock as a natural gas play.
Autodesk (ADSK): Cramer is bullish on this stock because they reported a good quarter and their business is turning around.
J. Crew Group (JCG): Cramer is bullish on this stock and wants to buy it on any weakness.
Expeditors International (EXPD): Cramer is bearish on this stock because it is too risky, and he recommended UPS (UPS) instead.
Qualcomm (QCOM): Cramer is bearish on this stock because the management was bullish and then reported a terrible quarter, and said he won’t consider buying the stock until they report 2 great quarters.
Wendy’s Arby’s Group (WEN): Cramer said he doesn’t want to give up on this stock, and his favorite in this sector is Chipotle Mexican Grill (CMG).
Dole Food (DOLE): Cramer is bearish and said he got it wrong when he recommended it, and added that he likes Del Monte Foods (DLM) instead.
American Superconductor (AMSC): Cramer is bullish on this stock as a speculative alternative energy play.
IMAX (IMAX): Cramer is bullish on this stock, though he would wait for a pullback before buying, and said that he likes Cinemark Holdings (CNK) as well.
Silver Wheaton (SLW): Cramer said he would rather own gold than silver, and recommended the Gold ETF (GLD) or Agnico-Eagle Mines (AEM).
Segment 5: Mad Money Mail
Dominion Resources (D): Cramer is bullish on this utility, and recommended Exelon (EXC) as well.
Citigroup (C): Cramer said that the government will announce that they are selling their stake in this bank, and he wants to buy it when it drops on that news.
Proctor & Gamble (PG): Cramer is bullish on this stock because of their sustainable profits, along with 3M (MMM) and Intel (INTC).
Ross Stores (ROST): Cramer is bullish on this stock, and TJX (TJX) as well.
