Cramer's 'Mad Money' Recap: Preparing for the Worst
Trimble has now entered into a joint venture with Caterpillar (CAT) and its machine control technology is being sold right alongside CAT's biggest equipment. This gives Trimble a competitive edge, noted Cramer, in an industry where there is still plenty of room to grow.
Trimble last delivered an earnings beat of 6 cents a share on better than expected revenue. Shares currently are going for 17.8 times earnings and the company has an 18.3% growth rate.
Cramer said as the number of users of Trimble's installed equipment grows, the company will soon be able to offer software upgrades and improvements, which can only further improve its margins.
Buying Into Kroger
Some sectors are loathed no matter what the economy is doing, Cramer told viewers. For almost the entire duration of "Mad Money," Cramer has panned both the airlines and the supermarkets, with the sole exception of Whole Foods Market (WFM), which remains a Cramer fave.But even in the supermarket business, one where the margins are razor-thin and the competition is intense, Cramer said execution matters, which is why shares of Kroger (KR) are up 3% for the year while Supervalu (SVU) and Safeway (SWY) have fallen 64% and 19%, respectively. Cramer said Kroger is doing things right and is doing a better job of appealing to value-oriented customers at its 2,425 locations. Kroger is the only grocer to post returns above its cost of capital and the company's same-store sales were up 3.6%. Kroger is also seeing its margins increasing as its taking share from its competitors. Kroger is the second-largest grocery chain, a fact that's helped both its balance sheet and its ability to grow and expand, said Cramer. The company also sells gasoline at about 50% of its locations, which helps attract customers and keep them. But perhaps Kroger's biggest advantage is its large penetration of private-label products. Private-label items carry higher margins than branded ones, Cramer reminded viewers, which is helping the company stay afloat in a highly competitive landscape. Cramer told viewers to avoid buying Kroger ahead of its upcoming results, but as a longer-term stock he said this is one grocery store, along with Whole Foods, that can actually be bought.
Lightning RoundIn the Lightning Round, Cramer was bullish on Clean Energy Fuels (CLNE), Starbucks (SBUX) and Red Hat (RHT). Cramer was bearish on Baidu.com (BIDU), Polycom (PLCM) and BP Prudhoe Bay Royalty Trust (BPT).
Am I Diversified?In the "Am I Diversified?" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets. The first portfolio included: BP (BP), Pepsico (PEP), Apple (AAPL), Bank Of Nova Scotia (NBS) and Windstream (WIN). Cramer said this portfolio was great for diversification but he was not a fan of some of the individual choices. The second portfolio's top holdings included: Chesapeake Energy (CHK), Excelon (EXC), Nokia (NOK), Ford (F) and Sprint Nextel (S). Cramer said Nokia and Sprint are both telecoms and he would swap Nokia for Apple. The third portfolio had: Bristol-Myers Squibb (BMY), National Oilwell Varco (NOV), EZChip Semiconductor (EZCH), Starbucks (SBUX) and Westport Innovations (WPRT) as its top five stocks. Cramer said this portfolio was fabulous just as it was. The fourth portfolio's top stocks were: Bank of America (BAC), American International Group (AIG), ConocoPhillips (COP), KKR (KFN) and Western Union (WU).
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