- why Sprint's resurgence is for real;
- how to invest in the oil patch; and
- why people are wrong to write off retail.
Make a Dash for Sprint Posted at 7:17 a.m. EDT on Friday, Aug. 10 Why do people spend so much time talking about Research In Motion ( RIMM), Nokia ( NOK) and Yahoo! ( YHOO)? Why? And why don't they spend more time talking about Sprint ( S)? I have no idea how the turn will go at Yahoo! I do know that it will not be a quarter or two turn. Maybe three? Perhaps four. The company has no mobile, social or cloud strategy. Until it does, I think you've got some real flatlined time on your hands. Research In Motion? That's only about takeover. You have 70 million subscribers and a good keyboard, but it is a closed ecosystem so you are buying a list and some patents and an enterprise services business. That list is way too expensive for almost all companies, although the keyboard patents have real value and we have rumors right now that IBM ( IBM) wants the enterprise service business. One would have to hope that the enterprise services business, like the patents, are worth so much that this could be a positive situation, like AOL ( AOL), and not a negative one, like Kodak. Still, I would not recommend a stock just on its parts valuation when the fundamentals are horrendous and the spiral down in cash has just begun. That's too dangerous. Nokia's only interesting to people because of its low-dollar price tag. If it were to do a 10-for-1 one reverse split no one would touch it. But Sprint? Here's a company that generates a huge amount of cash flow that needs to raise cash and can now do so, which will dramatically lower its interest charges in a way that is certainly profoundly positive. RIMM and NOK are in vicious cycles down; Sprint's in the virtuous cycle up.
Where to Look in Oil Services Posted at 12:12 p.m. EDT on Thursday, Aug. 9 Consolidation in the oil patch has been a constant theme. It makes a ton of sense, too, given that there are so many players in the business and there's much to be made by merging. When National Oilwell Varco ( NOV) buys Robbins & Meyers ( RBN), a company that has specialized in fluids management needed for drilling, we shouldn't be surprised that the acquirer's stock jumps on the news, despite paying $2.5 billion more than a 25% premium to yesterday's closing price. National Oilwell Varco is an integral portion of the drilling revolution in this country. It manufacturers the best state-of-the-art equipment and has been trying to get a bigger share of the whole drilling process, hence the bid for Robbins & Meyers. This acquisition gives National Oilwell Varco a chance to become more of a soup-to-nuts proposition for oil service companies. It's immediately accretive, allowing NOV to raise estimates by as much as 25 to 30 cents next year, even as it seemed like they paid a huge amount for the target. Obviously they got a bargain.
The Amazing Sector of Retail Posted at 2:01 p.m. EDT on Wednesday, Aug. 8. When are people going to stop writing off retail? Not that long ago people sold Macy's ( M) down to $32 on what amounted to a decent quarter and good guidance. It just meant nothing to them. Seemed like people just gave up on the department store chain. Today, it gave you a good number, good guidance and it is now six points above where it was when it gave you a good number and good guidance! Remember how furious people were with that last Bed, Bath & Beyond ( BBBY) quarter? While the stock's still down 10 points from its high before it reported, it's now up five points from the low and seems to be gathering strength. Ralph Lauren ( RL) just had a remarkable intraday 9-point run as if things are better than expected, not worse than expected. Home Depot ( HD) and Wal-Mart ( WMT) won't quit, the last one being just a monster. People were upset about Disney ( DIS) initially, but when you think about how much people are spending at theme parks you know that the negativists just didn't get the robust nature of the theme park visitors, something we have seen from Six Flags ( SIX), Cedar Fair ( FUN) and, yes, Universal, which is owned by Comcast ( CMCSA), my other job. There's just tremendous momentum in all retail -- witness the Market Vectors Retail ( RTH) -- and I think that people just keep underestimating the group. Next time we get a downturn, remember how quickly they come back. OK, not everything can bounce like Ralph Lauren, but this group's strength is just plain amazing. Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long Disney.