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Did you miss last night's "Mad Money" on CNBC? If so, here are Jim Cramer's top takeaways for next week's trading.
Ulta Salon(ULTA) - Get Report : Short-sellers are just as prone to wishful thinking as those who are long a stock, Cramer told viewers as he took another look at Ulta Salon, which has been roaring back from its Feb 19 lows including a powerful 17% gain Friday.
Cramer said the decline in Ulta started off as general market weakness but was accelerated by a negative research report that sent shares plummeting. The bear case was made in the report that Ulta had reached saturation in its store count and that same-store sales were about to decline.
But Cramer noted that when a retailer hits saturation it happens slowly, and that's not happening with Ulta. The company justified its expansion plans by noting its salon customers spend 2.5 times more in the stores than regular customers, but there are only a limited number of salon appointments available in every store.
As for those "declining" same-store sales, Ulta posted a 12.5% gain, not loss, in its most recent quarter, and that number is up from the growth the company saw last year.
Cramer concluded the bears have simply gotten Ulta all wrong and he continues to recommend the stock.
NRG Energy(NRG) - Get Report : If you want to make money in the energy business, stay away from NRG Energy, Cramer warned viewers. Shares of NRG have fallen over 56% from their 2015 highs and that might not be the end of the decline.
NRG had been a stellar performer in 2012, 2013 and into early 2014 because the company seemed to be doing everything right. NRG was investing in renewable energy and was growing its lucrative power distribution business. Investors cheered. But then energy prices began to decline, and what worked with oil at $100 a barrel no longer worked at $40 a barrel.
Despite having strong quarters in 2015, it didn't matter. Investors dumped shares of NRG with all of the other energy stocks. But then, late last year, management did an about-face, announcing that it would spin off its clean energy assets. This move only undermined investors' trust and led to another announcement, one that NRG's CEO was stepping down.
Cramer told viewers to steer clear of NRG and go with American Electric Power(AEP) - Get Report or ConEd(ED) - Get Report . If they really want solar energy, stick with First Solar(FSLR) - Get Report , which makes a ton of money.
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At the time of publication, Cramer's Action Alerts PLUS had no position in stocks mentioned.