Cramer's 'Mad Money' Recap: Next Week's Game Plan
Now that the company has slashed its guidance to where it can beat it, the stock is more attractive, trading at 13.5 times earnings with a 12% growth rate. Cramer said the company remains speculative, but it just might have what it takes for successful turnaround.
Lowe's vs. Home Depot
A rising tide may lift all boats, but that's no reason to sacrifice a best-of-breed company for a second-rate one. That was Cramer's conclusion after diving into the earrings from both Lowe's (LOW) and Home Depot (HD), a stock he owns for his charitable trust, Action Alerts PLUS.
On the surface, it may seem that both companies did well when they last reported. Lowe's delivered a three-cent-a-share earnings beat on higher revenue, but guidance fell below forecasts, sending share lower by 4.8%. Home Depot also delivered a three-cent beat on stronger revenue and also gave guidance below expectations.
But Cramer said the matrix that matters for these home-improvement giants is same-store sales, where Lowe's came in at just 1.9% growth while Home Depot rocked the house with a 7% gain. Cramer said that's the widest split in growth in over 13 years for these companies. Home Depot also offered investors its fourth dividend boost in recent years and a stock buyback that was larger than that of Lowe's.When you boil down the earnings, Home Depot has better stores in better locations and a better management team that knows how to execute, said Cramer.
Lightning RoundIn the Lightning Round, Cramer was bullish on Cisco Systems (CSCO), Lions Gate Entertainment (LGF), Michael Kors (KORS), Newcastle Investment (NCT), General Mills (GIS), Kellogg (K), Enterprise Products Partners (EPD) and iShares MSCI Mexico (EWW). Cramer was bearish on 8x8 (EGHT), Fossil (FOSL), Dean Foods (DF) and Penn West Energy Trust (PWE).
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: American Tower (AMT), Honeywell, JPMorgan Chase (JPM), LinnCo (LNCO) and American International Group (AIG). Cramer said JPMorgan can coexist with AIG and he blessed this portfolio as diversified. The second portfolio's top holdings included: SPDR Gold Shares (GLD), Altria (MO), SHFL Entertainment (SHFL), AT&T (T) and Verizon (VZ). Cramer called two-of-a-kind with Verizon and AT&T and said that he'd swap out AT&T for a drug stock like Bristol Myers-Squibb (BMY). The third portfolio had: Excel Trust (EXL), CenturyLink (CTL), Intel (INTC), RPM International (RPM) and Anworth Mortgage (ANH) as its top five stocks. For this portfolio, Cramer advised selling Excel and once again adding a stock like Bristol Myers.
No Huddle OffenseIn his "No Huddle Offense" segment, Cramer said he's tired of hearing about government sequestration fears because the bears have yet to come up with any stock that's actually being hurt by our national budget woes. He said the closest the bears have come are the defense stocks, but those names are still hitting new highs. Cramer said until some creative financier develops a "federal sequestration misery index" to track those stocks that are actually being affected, the markets will likely still not care. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. -- Written by Scott Rutt in Washington, D.C. To email Scott about this article, click here: Scott Rutt Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV