Cramer said that in volatile markets, technical analysis is only for the nimble, as these metrics can turn of a dime as they did today. He instead recommends that investors stick with the fundamentals of individual high-growth stocks and use a longer time horizon.
Cheap Chipotle"Investing in quality growth stocks is still in style," Cramer reminded viewers, as he once again highlighted Chipotle Mexican Grill (CMG) as one such company that investors should consider for their portfolios. Even after today's selloff, shares of Chipotle are only 2% off their 52-week high.
Using the 10-point scale he introduced yesterday, Cramer noted that Chipotle has excellent visibility and multiple years of growth ahead of it. The company posted strong same-store sales, up 11%, and management feels their U.S. store count could eventually grow from 1,230 units to more than 4,000 before becoming saturated. Chipotle also has international growth prospects and its Asian noodle restaurant concept on the back burner.
Are Chipotle's end markets big enough to support its growth? Absolutely, said Cramer. Is the company competitive? You bet. Chipotle also sports a strong balance sheet, a best-in-show management team and it doesn't need economic growth in order to prosper. Making things even better, Chipotle customers don't mind paying for quality, which means its margins can easily be maintained over time.
Cramer noted that while Chipotle doesn't pay a dividend, it is investing into its business, which is what growth investors should be looking for. Shares trade at a lofty 28 times earnings, but Cramer said that's not too high, given the company's 22% growth rate, which gives it a PEG ratio of just 1.72.Cramer told viewers not to chase Chipotle shares higher and to instead wait for a market pullback, like today, and buy in on the cheap over time.
Executive DecisionIn the "Executive Decision" segment, Cramer spoke with John Schiller, chairman and CEO of Energy XXI (EXXI), a little-known oil driller that is proving there's still a lot of money to be made drilling for oil. Schiller said the economics of the oil business have changed with oil prices near record levels. That's why oil fields purchased from Exxon-Mobil (XOM) just a few years ago are now windfalls for Energy XXI. Years ago, drilling in these fields barely moved the needle for Exxon, Schiller said, but with oil prices almost double what they were, the same fields are now some of the most lucrative in the Gulf.
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