Disney's theme parks, which make up 17% of the company's revenue, saw an 11% boost in this most recent quarter as consumer confidence begins to improve. The company is set to open its largest theme park to date, in Shanghai China, in 2016. Even the company's ailing movie division is turning itself around, as it prepares to deliver fewer, but higher-budget, productions in 2012.
Trading at just 10.8 times earnings with a 13.5% long-term growth rate, Cramer said that Disney is trading in-line with other media companies when historically it trades at a premium. He said that makes shares a Disney a steal and a must-own for every child's portfolio.
Do the HomeworkCramer explained what "doing the homework" really means by examining the most recent results of Nike (NKE - Get Report), a company he told viewers to get behind before they reported earnings earlier this week. He said that the company's 16% dividend boost was one signal, but in its earnings release, there were many others.
First was demand. No demand equals no sales, said Cramer; but in Nike's case, the company's "cool factor" and athlete endorsements create plenty of demand for its products. Then there's the size of its addressable market. In Nike's case, that's a possible $75 billion and Nike is the dominate player in that market. Also helping to make the demand case: Nike's future orders, up 13%.
Investors should consider the near term, said Cramer, as in what catalysts can help boost the stock in the short term. For Nike, those include the return of professional basketball, the 2012 summer Olympics and the World Cup in Brazil.Also on the homework list, a company's costs. Nike said that it's seeing no pushback from customers on its recent price increases, and cotton costs are now falling. There is also geography to consider. Cramer said that much of Nike's growth comes from emerging markets, 13% from China alone. Wall Street also likes accelerating revenue growth, said Cramer, and Nike's got that, too. The company's inventory at its retail locations was higher, he noted, but total units have topped, which is a bullish sign.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts