This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Cramer's 'Mad Money' Recap: Go for Growth (Final)

Stocks in this article: AAXHBCMGEXXIBBY

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 Decision

In 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.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,370.29 +174.87 1.02%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,624.88 +58.7420 1.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs