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NEW YORK (
) -- Next week's trading action may depend on a Chinese interest rate cut, Jim Cramer told his
TV show viewers Friday. He said if the Chinese don't deliver by Sunday, then the second quarter could start out ugly, with less momentum to keep pushing stocks higher.
That's why Cramer's game plan for next week's trading was on the cautious side. In addition to a Chinese rate cut, or lack thereof, Cramer said the markets will also be watching the latest German manufacturing numbers. He said that Germany has been the cornerstone of the European economy, and if Germany falters, that will also heavily pressure U.S. markets.
For Tuesday, Cramer said the markets will be watching the latest auto and truck sales. If higher gasoline prices are hurting the U.S. economy, Cramer said it will show up on Tuesday. He told viewers that weak truck sales will be especially bad for
Wednesday brings earnings from
Bed Bath & Beyond
. Cramer said he expects good things from both companies and would be a buyer on any weakness from either.
Then on Thursday, Cramer will be watching
for another read on the U.S. consumer and higher gas prices. He advised not buying Carmax ahead of the quarter. Cramer was also bullish on
and said that the latest retail sales data will make
the stock to watch in the retail group.
Finally on Friday, Cramer said it's back to the economy with the latest unemployment numbers being released. Cramer said he expects weakness from the decline in oil and gas drilling, thanks to America's inept energy policy.
In the IPO arena, Cramer told viewers to get in on Retail Properties of America, which will begin trading under the ticker RPAI.
In the "Executive Decision" segment, Cramer checked in with Nick Akins, president and CEO of
American Electric Power
, one of America's top generators of electricity and a company with a 4.9% dividend yield. Shares of American Electric Power are down 6.6% for the year over concerns that 65% of the company's power is derived from coal.
Akins reminded viewers that American Electric is a lot more than just coal plants in the state of Ohio. He said his company is in the electric generation, transmission and distribution business in several states outside of Ohio. The company also operates 3,500 barges, an excellent business, said Akins, that transports coal throughout our country and beyond.
That's why Akins disagreed with analysts who seem fixated over the company's proposed rate plans in Ohio. He said the original proposal was rejected, but a new proposal with more gradual rate increases has already been submitted and is likely to be approved.
Turning to the larger picture of using coal in America, Akins said that 48% of America's electric power still comes from coal. He said the industry can adjust to use cleaner alternatives, like natural gas, but that transition will take time. If coal were effectively banned by the Environmental Protection Agency, Akins said that the electric industry would need to replace that capacity immediately, at substantially higher electric rates.
Akins said that the EPA has given president Obama a bad reputation for being anti-business. Even if the country decides to move away from coal, the EPA should still support businesses during the transition and not become adversarial.
Cramer said that American Electric Power remains a great, solid company with a great yield, one that deserves a spot in every investor's portfolio.
In the second "Executive Decision" segment, Cramer spoke with Vivek Ranadive, chairman and CEO of
, a company that saw its shares fall 6% today after it reported a penny-a-share earnings beat on higher-than-expected revenue. Shares of TIBCO, a big data analytics provider, are up 27% since Cramer last spoke with Ranadive on Jan. 11.
Ranadive explained how his company operates on the "two-second rule," providing real-time information to customers in just seconds. For a casino customer, for example, TIBCO can tell when a patron has lost too much money and is about to leave and instantly offer them a reward before they cash out their chips. For a retailer like
, TIBCO provides the smarts behind the product recommendations customers see.
Ranadive was very bullish on TIBCO's prospects, noting that the company could have a 10% to 20% impact on a customer's revenue. That's how TIBOC has outperformed Wall Street estimates for 15 consecutive quarters, he noted.
Ranadive also compared TIBCO's software to that of data giants like
. He said that these companies use older systems, which store information in a database, meaning they have to ask a question before receiving a response. On TIBCO's platform, however, information is constantly being analyzed and the system will alert you when it sees something of interest, even before being asked.
Cramer remained bullish on TIBCO Software.
In the "Mad Tweets" segment, Cramer responded to questions sent via Twitter to
. When asked how a younger investor should speculate on stocks, Cramer jumped right in with not only an investing strategy, but also a great speculative stock as well.
Cramer said that younger investors can afford to speculate more than seasoned investors can, since they have a longer time frame to work with. That said, Cramer said that no investor should ever have more than 20% of his or her portfolios in speculative stocks. "Even a $10 stock can still fall to zero," he reminded viewers.
With that caveat out of the way, Cramer recommended
, a little-known midwest supermarket purveyor with 159 locations under five different brands. Roundy's came public to little fanfare on Feb. 7 and after a modest 6% rise on its first day, shares have been creeping higher, up 26% so far.
But what makes Roundy's unique, said Cramer, is its incredible 8.5% dividend yield, one that's triple the industry average. Cramer said by just reinvesting the dividends alone, investors could double their money in just eight years. But that's unlikely to happen, noted Cramer, as investors will drive the share price higher and higher as more and more of them discover this great company.
Cramer said he dislikes the cut-throat supermarket business with a passion, but Roundy's has a limited geographic footprint, one that doesn't overlap with many of the national chains. The company is also the leading player in the markets it serves and has excellent management with a proven track record of success. That's why shares of Roundy's, which trade at a scant seven times earnings, is far too cheap, given the company's 10% growth rate.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer sounded off against the critics who feel that red-hot IPOs are a sign the markets have gotten too hot to handle. Cramer said nothing could be farther from the truth, as the big secondary offerings from
proved this week.
Dollar General offered 25 million additional shares this week, while Dunkin offered up 26 million, noted Cramer, with both offerings immediately turning a profit for those who got in on the deal. Neither of these companies are spectacular, he said, which means that the interest in their shares was nothing more than interested investors wanting to buy up this merchandise.
This kind of buying only happens in a healthy market, Cramer concluded, which is why the skeptics are once again wrong.
In the Lightning Round, Cramer was bullish on
Cramer was bearish on
Research In Motion
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer's Action Alerts PLUS held no positions in stocks mentioned.
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