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NEW YORK (
TheStreet) -- It's a treacherous time to trade on earnings, Jim Cramer warned
"Mad Money" viewers Friday, but it's a great time to listen to what companies have to say.
Cramer said that's why his game plan for next week's trading includes a lot of listening but not a lot of trading.
On Monday, Cramer said he'll have his eye on the
JPMorgan Chase(JPM) health-care conference, where both
Biogen Idec(BIIB) are expected to present. Cramer said he expects to hear great things from both of these companies.
Tuesday brings earnings from
Alcoa(AA). Cramer said Monsanto has rallied big, so he expects a sell-off, which would be a great time to buy. Alcoa will remain challenged, he said.
For Wednesday, it's the
Walgreen(WAG) analyst day taking center stage and Cramer said he'll be waiting to hear about the company's international plans, which he expects to be good news for the stock.
Turning to Thursday, the
Herbalife(HLF) analyst day will give the company a chance to respond to a rash of short selling, said Cramer, but he's continuing to stay far away from this heated battleground stock. Also on Thursday,
Chevron(CVX) reports. Cramer said this would be a good name to pickup on weakness.
Finally on Friday,
Wells Fargo(WFC), a stock Cramer owns for his charitable trust,
Action Alerts PLUS
, will report. Cramer said this bank is taking huge market share in mortgages and he'd buy more if the stock gets hammered.
Break Up Johnson Controls
Some companies are worth more in pieces than they are as a whole, Cramer reminded viewers. He said
Johnson Controls(JCI - Get Report), which was down 1.8% in a roller-coaster 2012, would be an excellent candidate for splitting itself into three separate companies.
Johnson Controls currently has three different divisions, each accounting for about a third of company sales. It's a big player in HVAC and building efficiency systems, it manufactures automotive seats and interior components and the company makes batteries, both old-fashioned car batteries as well as some newer hybrid batteries.
Johnson Controls currently trades at a discount to similar companies like
Honeywell(HON), noted Cramer, and with easy comparisons the stock should perform well even without a breakup. But with a breakup, the stock would be worth a whole lot more.
Cramer said that Johnson Controls is fairly valued using 2013 earnings estimates, but said that's the wrong ways to value the company's businesses, all of where are late-cycle recovery plays that are just coming into their sweet spot. If the divisions were separate and easy for investors to understand, they'd be using 2014 and 2015 estimates to value the potential for a strong housing recovery and continued strength in the auto markets worldwide, he said.
Based on those "out year" estimates, Cramer said Johnson Controls' divisions would be valued at $39.80 a share, or a 27% premium from where they trade today.
For "Speculation Friday," Cramer said it's once again time to consider telco equipment maker
JDS Uniphase(JDSU), a company with a long history of boom or bust, feast or famine cycles that is once again coming into favor.
Cramer explained that all of the telco equipment stocks live or die based on the capital expenditures of the major telco carriers. Over the past two years, those carriers have been reluctant to spend, making JDS Uniphase not investable.
But recently, equipment inventories have fallen to three year lows and carriers including
Sprint Nextel(S) have all signaled they're beginning to spend on new initiatives and major expansions of their networks.
Cramer noted that 40% of JDS sales stem from testing equipment, another area that will be in demand as carriers upgrade and expand their networks to the latest 4G service.
On a price earnings basis, JDS Uniphase is lagging its peers, trading at just 22.6 times earnings while the rest of the group has seen multiples expand from 20 times to 27 times earnings over the past few months. With a JDS Uniphase investor conference coming up soon, Cramer said he'd be a buyer of the stock on any pullback.
In the Lightning Round, Cramer was was in a bearish mood and advised against owning
Harvest Natural Resources(HNR) and
Energy Transfer Partners(ETP).
In the "Mad Mail" viewer feedback segment, Cramer followed up on
Natus Medical(BABY), which stumped him during an earlier show. Cramer said the company is speculative and hasn't shown a lot of growth. He advised waiting on the sidelines for now.
Cramer said he's also not a fan of
WR Grace(GRA), nor
Taser(TASR), which he said can only be owned if the stock pulls back below $8 a share.
Cramer continued the tough love with
Burger King(BKW), saying he's not buying into the burger wars, and
Phillips 66(PSX), saying investors looking for a natural gas play need look no further than
No Huddle Offense
In his "No Huddle Offense" segment, Cramer said that he'd normally put a company like
Google(GOOG - Get Report) in the penalty box, after missing earnings and sending its share price plummeting nearly $100 last quarter.
But after the Federal Trade Commission concluded its investigation of Google without any major enforcement action, and in the face of an improving advertising market, Cramer said that perhaps the FTC's decision is the catalyst investors need to pull the trigger on the stock.
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-- Written by Scott Rutt in Washington, D.C.
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