Cramer's 'Mad Money' Recap: Apache Heats Up Oil Patch
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Apache
(APA) - Get APA Corporation Report
is an oil exploration and production company people should take a look at and consider buying, Jim Cramer told viewers of his "Mad Money" TV show Thursday.
Earlier in the year, Cramer highlighted it as one of his $80 to $120 stocks. That is the type that you find at $80, and it tends to go to $100 before rising all the way to $120 in a bull market, he said.
Cramer likes Apache because it is one of the few companies that believes in expensive oil. It is the king of real growth in the oil industry, he said, noting Apache's oil production was up 9% during the third quarter. By contrast,
Exxon Mobil
(XOM) - Get Exxon Mobil Corporation Report
doesn't have any growth, he said.
Compared with other oil companies, Apache isn't locked into any delivery contracts and is free to sell oil at sky-high prices, he explained. That's why it had the best "blowout" quarter and "single best conference call" of any oil company, he added.
Apache buys unwanted properties at a discount and makes them more efficient and profitable, Cramer said. In addition to the U.S., it operates in Argentina, the U.K., Australia, Canada and Egypt. The new discoveries Apache has made overseas means not only increased production for the company, but more earnings visibility as well, he said.
It's cheap compared with many of its competitors, and if it were to get a 15 multiple, the $100 stock could go to $130, Cramer said, adding that a 17-multiple would push Apache to $147.
The Fourth Horseman
Even during a horrible market day like Thursday, Cramer said he likes to recommend stocks that are working. The one sector that is working is tech, he said, adding that there's been a huge tech rally and it's getting stronger.
The three horsemen that have been the vanguard of this rally have been
Research In Motion
(RIMM)
TheStreet Recommends
,
Apple
(AAPL) - Get Apple Inc. Report
and
(GOOG) - Get Alphabet Inc. Report
.
Then he singled out a tech stock that has been overlooked:
Brocade
(BRCD)
."
Brocade, Cramer said, is in the storage and networking business, where it competes with
Cisco
(CSCO) - Get Cisco Systems Inc. Report
"in a happy duopoly."
He said the Street hasn't paid much attention to the stock, but that's about to change once it realizes Brocade's connection to
VMware
(VMW) - Get VMware, Inc. Report
.
VMware, Cramer explained, makes virtualization software that turns one computer into many computers. While that hurts many other players in the tech space because of the need for fewer servers, it increases the demand for software area networks, he said. This, he emphasized, is where Brocade comes in because it makes the switches and ports that route data over these networks.
"As VMware does better, Brocade does better," Cramer said.
In addition, the stock is cheap, he said, noting that the stock, which is currently at $9, will rise to $12 if it trades at 1.5 times its growth rate.
Dump Crocs
During his "Sell Block" segment, Cramer told viewers that it's time to sell
Crocs
(CROX) - Get Crocs Inc. Report
because it has fallen by more than 36% in a short period of time.
"It was a true and genuine disappointment with an unimpressive quarter and dismal guidance," he said. The last time Crocs was at $50, he advised market players to buy it, but now it's time to sell it.
Crocs is a momentum play and can only justify its valuation by beating its earnings, and this time it did not, Cramer said. He said the only reason he stuck with Crocs was its consistent earnings story, but that has now evaporated.
When these kinds of momentum stocks fall apart, they take years to come back, if ever, he said. Just take a look at
Buffalo Wild Wings
(BWLD)
and
NutriSystem
(NTRI) - Get Nutrisystem, Inc. Report
. "In each case there was a bounce, and in each case it was over," Cramer said.
He believes there will be a small bounce in Crocs, too, and "when it bounces, you got to go," he said. Sure, Crocs could defy the odds and come back, but it's not likely. "Sell it," Cramer said. "The fundamentals are not as good."
He said he also wants
lululemon
(LULU) - Get lululemon athletica inc. Report
off his hands because he doesn't believe the stock will catch another double.
Also, Cramer is tempted to take
Under Armour
(UA) - Get Under Armour Inc. Class C Report
off the table. "It's not going to be the next
Nike
," he said.
Mad Mail
Cramer told a viewer
Sepracor's
(SEPR)
main drug is slowing because of competition. "I don't want to touch it for a trade or an investment," he said. Instead, he suggested buying
Celgene
(CELG) - Get Celgene Corporation Report
.
When an emailer asked about
eBay
, Cramer said he's sticking with the company. "I think PayPal is worth a lot of money."
Lightning Round
Cramer was bullish on
Diana Shipping
(DSX) - Get Diana Shipping inc. Report
,
Sirius Satellite Radio
(SIRI) - Get Sirius XM Holdings Inc. Report
,
Baidu.com
(BIDU) - Get Baidu Inc. 百度 Report
,
Celgene
(CELG) - Get Celgene Corporation Report
,
L-3 Communications
(LLL) - Get JX Luxventure Limited Report
,
Becton Dickinson
(BDX) - Get Becton Dickinson and Company Report
,
Lowe's
(LOW) - Get Lowe's Companies Inc. Report
,
Union Pacific
(UNP) - Get Union Pacific Corporation Report
,
Barrick Gold
(ABX)
,
Yamana Gold
(AUY) - Get Yamana Gold Inc. (Canada) Report
,
Goldcorp
(GG)
,
Freeport-McMoRan
(FCX) - Get Freeport-McMoRan Inc. Report
and
Wyndham Worldwide
(WYN)
.
Cramer was bearish on
Navios Maritime
(NM) - Get Navios Maritime Holdings Inc. Report
,
Sohu.com
(SOHU) - Get Sohu.com Limited Report
,
Genentech
(DNA)
,
AuthenTec
(AUTH)
,
Burlington Northern Santa Fe
(BNI)
and
Las Vegas Sands
(LVS) - Get Las Vegas Sands Corp. Report
.
Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by
.
For more of Cramer's insights during the Lightning Round, click here
.
At the time of publication, Cramer was long Freeport-McMoRan.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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