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Sometimes going head-to-head with analysts can be lucrative, Jim Cramer told viewers of his "Mad Money" TV show Thursday.
Cramer still likes
after UBS "unbelievably" downgraded the stock today, lowering its estimates from $72 to $68 a share.
Cramer believes Under Armour CEO Kevin Plank knows more than UBS, and Plank didn't exhibit a single sign that business had slowed. UBS' downgrading of Under Armour reminded Cramer of efforts to call a top on
, which turned out to be wrong.
The UBS analysts' conclusions are based on "flawed methodology," Cramer said. Their assessment is based on extrapolation and anecdotal evidence from visits to sporting goods stores. Cramer acknowledged that Under Armour has been hurt by unseasonably warm weather, and that the stock "isn't blowing the lights out so far this quarter."
Nevertheless, for the stock to tumble from $78 a share to $58 because of a rumor of slower sales is excessive. When the weather does cool down this season, sales should pick up.
To short Under Armour is to bet that the weather will not turn cold this year and that the revamping that Plank was talking about won't work. "The downgrade is just plain wrong," Cramer said. He urged viewers stay with Under Armour.
Cramer urged viewers to get in early on a merger deal between
which he owns for his charitable trust,
Action Alerts PLUS, and
Cramer believes that Hologic is the "greatest women's health care company on earth," and that the synergy yielded by this merger will net great gains for investors. The products sold by the two companies taken together will cater to women of all ages. Additionally, Hologic and Cytec will benefit from shrinking their back offices and consolidating their manufacturing.
Hologic is expected to grow 25% over the next several years. Cramer believes that synergies between Hologic and Cytec are greater than that. When the deal closes, analysts will raise their estimates, and the price of the stock will increase, he said. For those reasons, it is important to get into Hologic before the deal closes, to avoid paying too high a price, Cramer said.
During the "Sell Block" section of the show, Cramer urged viewers to sell
. Although it was one of Cramer's best speculative stocks of the year, and its new drug Puricase ought to bring in revenue, the stock's price likely already reflects that.
Cramer also urged viewers to move away from
( CHTT). The stock has jumped 100% since Cramer recommended it, and it would be greedy to stay with it much longer.
Investors should also take partial profits on
Research In Motion
Dismounting the Four Horsemen
This advice might surprise some viewers who watched Cramer tell investors to buy his "four horsemen" of tech earlier this week. Cramer explained that institutional buyers have artificially raised prices by buying shares of the stocks in high volume. This technique is deplorable, Cramer said, but hedge fund brokers do it when they are behind on a hot stock, and Cramer believes that is what happened with the four horsemen.
When the third quarter ends Friday, the artificial rise in these four stocks will disappear. Although Cramer still believes his four horsemen will rebound, he urged viewers to sell in the short term and remain in the stock for the intermediate term. "Take a little off the table in case they get hit at the end of the quarter," Cramer said.
Peet Gathering No Moss
Cramer welcomed Patrick O'Dea, CEO of
Peet's Coffee and Tea
( PEET), to the show to ask him about a recent report that indicated
might be in for a downturn.
O'Dea said that Peet's Coffee differs from Starbucks in that it is a smaller company that focuses more heavily on coffee itself than on customers' experience in the store. He said Peet's is growing 20% annually.
People who sell Peet's based on the Starbucks report are foolish, Cramer said, adding that investors should stick with Peet's.
Cramer was bullish on
Global Santa Fe
Cramer was bearish on
China BAK Battery
International Flavors & Fragrances
United Parcel Service
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At the time of publication, Cramer was long Hologic and Transcocean.
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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