Jim Cramer's Mad Money Recap
Cramer's 'Mad Money' Recap: Riches in Cheap Threads
10/10/05 - 07:19 PM EDT
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TJX Companies (TJX)
, which owns T.J. Maxx and Marshalls, is as cheap as its clothes, said Jim Cramer on his "Mad Money" TV show Monday, and he wants you to buy the stock.
Cramer has been bearish on retail, but said it's time to start looking for retailers that have bottomed. TJX fits the bill.
TJX lowered earnings estimates last week, which is bullish for the stock, he said, because TJX now has reasonable earnings estimates it can meet or beat. That's the first step for a stock to bottom, he said.
What's more, the company is hosting a conference call Tuesday to update its strategic outlook. If the call goes well, Cramer believes it could get the stock moving.
Third, TJX should benefit from a slowdown in the economy because people tend to shop more at T.J. Maxx and Marshalls when they don't feel as affluent.
Fourth, the company's former CEO, Ben Cammarata, and former senior executive, Carol Meyrowitz, are back running the company. Cramer is a big fan of both.
Finally, Cramer believes TJX should be able to sell some of its standalone retail stores such as Bob's Stores, A.J. Wright or HomeGoods to an "eager and willing private-equity market."
TJX is a "safe and smart" buy here, said Cramer. The company's shares ended the regular trading session Monday at $21.60.
Commenting on online retailers, Cramer said he would be buying Amazon.com (AMZN)
, thinking it will do better because of high gasoline prices. Cramer would look to sell Amazon into potential future upgrades of the stock.
As for traditional retailers, Cramer likes Kohl's (KSS)
and J.C. Penney (JCP)
because they're down so much. He also likes Wal-Mart (WMT)
because it is too low, he said, adding he wished he owned the stock.
BioCryst Pharma as Bird Flu Play
Cramer is bullish on BioCryst Pharmaceuticals (BCRX)
for a trade because of the company's very early-stage vaccine for avian flu, Peramivir. The stock is risky, he said, because Peramivir is only in preclinical testing, and the drug has already been through an unsuccessful phase III study in 2003, said Cramer. Nevertheless, trading is all about the buzz, he said. "Wall Street's a fashion show. You want to buy the fashions before they become fashionable. When you see everybody wearing it, you want to sell it."
Cramer expects BioCryst's stock to jump whenever avian flu gets mentioned in the media, he said. At that point, you should sell it. If in six months nothing has happened and no one is talking about avian flu, you should sell it then, too, he said.
Also, don't pay up for the stock, he advised. Try to buy it at least within 50 cents or so of where the stock closed the regular trading session Monday at $12.98, said Cramer.
Cramer is changing his tune on oil tanker shipping company General Maritime (GMR)
. Cramer has been bearish on GMR "for 20 points down," he said. But, rates for midsized oil tankers are up 20% to 30% so far in October in the wake of hurricanes Katrina and Rita, and GRM is the pure play on midsized oil tankers, with the world's second largest midsized tanker fleet, he said.
Cramer also mentioned Teekay Shipping (TK)
, which has the world's largest fleet of midsized oil tankers. But Teekay also owns one large-class oil tanker, and rates for the largest class of tankers have declined 50% vs. last year's average and are not recovering strongly, said Cramer.
"General Maritime's rates are recovering," said Cramer. "The rest of the tanker business is sitting dead in the water ... You go with GMR."
Allscripts Healthcare Solutions' (MDRX)
CEO Glen Tullman spoke with Cramer on the phone. Cramer asked Tullman how close doctors are to having fully computerized offices.
Tullman said the trend is just beginning. "It's turned for the big physician groups, and it's starting to turn in the mid-market," he said.
Cramer asked why Allscripts' solutions were better than competitors' offerings such those from Quality Systems (QSII)
, "another company I like a lot," said Cramer.
Tullman said Allscripts' product is easier to install and use and that Allscripts has a built-in advantage in the high-end market because of its relationship with practice-management software provider, IDX Systems (IDXC)
Cramer asked Tullman if he was concerned that with General Electric's (GE)
planned acquisition of IDX Systems that Allscripts' relationship with IDX might change.
Tullman said GE would not make a change and that "both parties have publicly reaffirmed our partnership."
Cramer concluded by saying that some analysts had cut Allscripts' numbers as a result of GE's planned acquisition of IDX. Cramer said after hearing from Tullman, he believes that is a mistake.
"If it goes down, I'd do a 'mon back* on MDRX," Cramer said.
Sticking With Tech Titans
Commenting on news after the close, Cramer said the litany of tech blowups such as Skyworks Solutions' (SWKS)
"total train wreck" is not a reason to sell the "big dogs" of the Cramer tech rally like Motorola (MOT)
And, of news Monday that Refco (RFX)
had placed its CEO on leave and that its financial statements since 2002 should no longer be relied upon, Cramer said, "If you own the stock, I think that you've got to still throw it away." The situation is "way too big for the CEO and for the board not to know what was going on," he said.
Cramer was bullish on
NL Industries (NL)
PNM Resources (PNM)
Duke Energy (DUK)
Ultra Petroleum (UPL)
Southwestern Energy (SWN)
General Motors (GM)
Lions Gate Entertainment (LGF)
Grey Wolf (GW)
FPL Group (FPL)
Chesapeake Energy (CHK)
Cramer was bearish on
Penn National Gaming (PENN)
Mylan Laboratories (MYL)
Fair Isaac (FIC)
Waste Management (WMI)
Dominion Resources (D)
Applied Materials (AMAT)
Cisco Systems (CSCO)
*For all you home-gamers, a 'mon-back opportunity means Cramer would back up the figurative truck and load up on a stock.