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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cramer's 'Mad Money' Recap: Look for Buying Opportunities

Stocks in this article: FHN CEO PEET CMG PNRA WFM YUM TMO FTR CTL HES NFLX MNST ETN PETM ROST CL JNJ KO VZ BHI HAL

Cramer said Chipotle is likely fairly valued at its present 34 times earnings. He said a Panera-style multiple of 25 would be a floor for Chipotle, while Whole Foods would likely be a new ceiling. But with Yum Brands (YUM) citing a 13% rise in sales at low-end Taco Bell, the trade-down play is clearly happening, said Cramer, which means Chipotle shouldn't be owned until it hits 30 times earnings, or $270 a share.

Chipotle isn't the same company we knew last week, Cramer concluded, which is why we must now wait for its valuation to come back into line.

Lightning Round

Here's what Cramer had to say about callers' stocks during the "Lightning Round":

Thermo Fisher Scientific (TMO): "I like this business and I think it's inexpensive. I want to buy it."

Frontier Communications (FTR): "No, no, no. I've gone back to CenturyLink (CTL)."

Hess (HES): "Too poorly managed. Sell, sell, sell. I do like the oils though."

Netflix (NFLX): "That is the hardest stock in the world. I don't know what they will do next."

Monster Beverage (MNST): "I think that business is good but no one wants to pay that multiple. "

On the Horizon

In the second "Executive Decision" segment, Cramer spoke with Brian Jordan, chairman, president and CEO of First Horizon (FHN), a regional bank whose shares fell 5% after reporting earnings despite the company already having one of the cheapest valuations in its sector.

Jordan said there are a number of things affecting bank valuations. Despite having strong core fundamentals and an improving capital markets business, the overhang from the mortgage crisis still weighs on First Horizon's stock. When asked about the lingering mortgage morass, Jordan said his bank is on the back side of the crisis and feels they now have enough reserves set aside for any mortgage repurchases that may come along.

Turning to the question of what is a fair valuation for First Horizon, Jordan said that tangible book value is an important reference point as it takes into consideration many of the bank's core fundamentals. He said First Horizon's business is in line with an economy growing at 1% to 2% a year but also of a bank that's been able to take a little market share from its competitors.

3 of 4

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!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

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