Cramer’s ‘Mad Money Lightning Round’: Fill ‘Er Up at Chevron
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You have to buy stocks next week that report good earnings, Jim Cramer told viewers of his “Mad Money” TV show Friday.
“We’re in a buy-high, sell-higher world,” he said. “What goes up the first day must go up again and again.”
Boeing (BA) , Ingersoll Rand (IR) , Caterpillar (CAT) , Black & Decker (BDK) , American Standard (ASD) and Alliant Tech (ATK) all went up this week and kept going up, Cramer said.
“These stocks go up big the first day, the second day and then the third day,” Cramer said. “This market is dynamic, and you need to be dynamic to keep up.”
Therefore, said Cramer, your mantra should be to pay up for stocks to make money. Buy Boeing and Caterpillar, even though they both “went up huge” after they reported, he said.
The game plan next week is to find which stocks will have good earnings that will cause them to go up not only the first day but the following days as well, he said. The “best bet,” according to Cramer, is to go with Whirlpool (WHR) , which reports Wednesday.
It is a “near monopoly,” and expectations are “extremely low,” he said. Cramer advised viewers to get in ahead of the quarter Wednesday because he believes this one is going to $120, on the cheap side. Whirlpool closed at $92.35 Friday.
Consider getting into Cisco (CSCO) as well, he said, because its bar has also been set very low. And VF Corp. (VFC) is another stock reporting next week that Cramer likes.
In addition, he believes Disney (DIS) “should rally again” and Bunge (BG) “is ready to snap back.”
Lastly, Cramer encouraged people to take a look at Curtiss-Wright (CW) , which should bounce after it reports Thursday. Broken Stocks
It may make no sense that Yahoo! (YHOO) , which Cramer owns for his charitable trust, Action Alerts PLUS, is more expensive than Google (GOOG) , Cramer said.
And it might be confusing that despite reporting a “blowout” quarter, Google got hammered. Meanwhile, eBay (EBAY) , after reporting a not-so-good quarter, went up, he went on to say. But there is a reason for this.
There are two kinds of growth on Wall Street, Cramer explained: accelerating growth and decelerating growth. And there are some money mangers who will pay up only for the former.
Yahoo! and eBay are both “broken stocks,” according to Cramer. He said that Yahoo! has been broken for a while — so much so that some people don’t even consider it a growth stock any more — but with its Panama software, it is getting better.
Similarly, according to Cramer, the market had “completely written off” eBay, but after it “fixed things” and came out with a “halfway decent” number, it demonstrated accelerating growth and attracted buyers. “These two are not done going up,” he said.
However, Google, which had 99% growth last year, is now decelerating, demonstrating 40% growth, Cramer said. Even though 40% growth is still “remarkable,” money mangers make the rules and they don’t go after decelerating growth, he said.
Cramer believes Google has more going for it than just growth. It has a “virtual monopoly” on page search and a low multiple. But with a decelerating growth rate, it won’t get the multiple it deserves, he said. Cramer still believes Google will go to $600 “once it shakes off the deceleration,” but for the near-term it will trade lower. Google closed at $481.50 on Friday.
While Yahoo! and eBay “are nothing compared to Google,” they are going higher, and Google should go down to $450 before it bounces back, Cramer said. Turn the Switch & Data On
Cramer told viewers to buy Switch & Data under the symbol SDXC after its initial public offering, which is expected to take place next week.
While it is a tech IPO, levered to the rising demand for broadband, it is not a typical broadband play, he said. Rather, Switch & Data provides infrastructure for the actual servers, making it possible for companies such as Level 3 Communications (LVLT) to operate, Cramer said.
Its high-profile customer list includes such names as Google, Yahoo!, Akamai Technologies (AKAM) , Apple (AAPL) and Microsoft (MSFT) , he said.
A similar company, Equinix (EQIX) , doubled in the last year, so Cramer believes people should get into Switch & Data.
He advised viewers to first try to get into the stock by going through any of Switch & Data’s underwriters — including Deutsche Bank, Jefferies & Co., CIBC World Markets, Raymond James, Lazard Capital Markets, RBC Capital Markets and Merriman Curhan Ford.
If that’s not possible, Cramer said he’d pay up to $20 for the stock in the public market and sell it at $24.
In his “Mad Mail” segment, Cramer told a viewer he is still bullish on NYSE Group (NYX) , which he owns for his charitable trust, and believes it is a very good stock.
Responding to another mailer, Cramer said Halliburton (HAL) , which he also owns, is cheap and good, and he advised the viewer to stick with it. Lightning Round
Cramer was bullish on Nymex Holdings (NMX) , Grainger (GWW) , Wesco (WCC) , Chevron (CVX) , Devon Energy (DVN) , Amgen (AMGN) , Genentech (DNA) , Celgene (CELG) , Hewlett-Packard (HPQ) , Valero Energy (VLO) , Archer Daniels Midland (ADM) , Amor Holdings (AH) , General Dynamics (GD) and L-3 Communications (LLL) .
Cramer was bearish on 1-800-Flowers.com (FLWS) , Sirius Satellite Radio (SIRI) , Medarex (MEDX) , Illumina (ILMN) and Force Protection (FRPT) .
Want more Cramer? Check out Jim’s rules and commandments for investing from his latest book by http://www.thestreet.com/tsc/cramerbook.
For more of Cramer’s insights during the Lightning Round, click here.
1 What would best describe your stance heading into the coming week of trading?
Bullish
Bearish
Neutral
2 Which of these sectors do you think is set to move up in the coming week?
3 Which of these sectors do you think is set to move down in the coming week?