For the week ending March 14 2013, Jim Cramer covered 54 companies, while being bullish on 40 of them. The 74% bullishness reflects a similar market sentiment for the week. The S&P 500 index, as measured by the SPDR ETF (SPY) rose 0.25% and is up 9.42% for the year-to-date. [Related: Jim Cramer is Bullish on Tech: 4 to Watch]
Some of the most notable calls are listed on the table below and were selected based on having an average trading volume of over 5M shares:
Bear Calls Cramer made some negative calls that are worth investor caution. Groupon, Inc. (GRPN), whose shares are up 11% on the year and 107% from a November 2012 low is gaining buyers. An analyst at Legg Mason mentioned Groupon favorably. Groupon’s founder, Andrew Mason, was pushed out as CEO, and is also gone from the board. Investors are betting that Groupon will turn itself around. Investors should expect Groupon to first cut payroll, reduce costs, and to focus on profitable ventures. In the retail space, J.C. Penny (JCP) was a sell. Cash flow is worsening: its lender, CIT Group, is adding a surcharge on short-term lending for JC Penny. Investments in shops and capital expenditure are hurting cash flow. If suppliers follow suit, the cash crush would exert negative pressure on the business. J.C. Penny shares bottomed at around $14 and are up 9% from a March 2013 low. Bullish Calls The resource sector is not performing well relative to the markets, but Cramer mentioned Valero (VLO) favorably. Wall Street Journal recently published a story focusing on the rising costs of using corn ethanol in fuel. The move would hurt refiners like Valero. In February, Wells Fargo was bullish on Valero, projecting shares would be worth between $54 – $56. Valero shares peaked in March at around $49. Valero trades with a price of profit of 8. Las Vegas Sands (LVS) was another favored play. In January 2013, revenue for casinos in the Las Vegas strip fell nearly 19% from the year before. Earlier in the month, the company admitted to breaking bribery laws. LVS closed at around $53.60 and has a forward P/E of 20. Blackstone Group LP (BX) received a favorable call. The Private-Equity firm was accused of conspiring to lower prices on their targeted acquisitions. The firm wants to securitize REO-to-rental properties, a move that has never been done before. Its CEO noted that the company is the largest owner of individual houses in the United States. The company has a real estate portfolio that is $3 billion in size. Blackstone surged to $20.89 and has a forward P/E (as reported by Kapitall’s snapshot tool) of 9.
Written by Chris Lau