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Did you miss last night's "Mad Money" on CNBC? If so, here are Jim Cramer's top takeaways for today's trading.
Dollar Tree (DLTR - Get Report) versus Dollar General (DG - Get Report) : The dollar stores continue to be hot, Cramer told viewers. Cash-strapped consumers are still looking for values. So now that Dollar Tree has completed its acquisition of Family Dollar, is it still be best of breed or is rival Dollar General the best way to play the group?
Cramer said Dollar Tree remains all about the integration of Family Dollar, while Dollar General is all about organic growth and returning cash to shareholders.
After completing its merger, shares of Dollar Tree promptly began a multi-month selloff, falling from $80 a share in July to just $60 by October. But then when the company surprised Wall Street with its earnings on Nov. 24, shares shot right up to $74 and haven't looked back. As long as the integration goes well, so, too, will its shares, Cramer said. But any hiccup will be disastrous.
Shares of Dollar General were also pounded from August through November and still remain well off their highs. But after the company announced better-than-expected earnings and a $1 billion stock buyback, Cramer said investors started taking notice. He said shares remain cheap at 15 times earnings and are consistently undervalued given the company will open 730 new locations this year alone.
Computer Sciences (CSC) versus CSRA (CSRA) : On Monday, Computer Sciences successfully spun off its government contracting arm as CSRA. With virtually no research available on these two new companies, Cramer did the homework.
He said after becoming the laughing stock of the IT industry in 2012, CSC got itself a new CEO and turned itself around. The company sold off non-core assets, replaced its entire management team and laid off thousands of unproductive workers. That's how shares have tripled since 2012.
But post-spinoff, the remaining CSC will be a slow grower, just 1% to 2% annually. With a multiple of 11.5 times earnings, Cramer said investors have likely missed the move.
CSRA, the government-focused part of CSC, is a different story. That company has top-notch management and just a 15 times earnings multiple, which puts it at a discount to its peers, none of which are as good as the new CSRA.
Acuity Brands (AYI - Get Report) : What the heck is going on with Acuity Brands, the old-school lighting maker that transformed itself into a cutting-edge technology company, sending shares up 244% over the past three years? Cramer decided to find out.
Cramer said Acuity isn't on anyone's radar, especially after the recession caused less construction and therefore less demand for commercial and industrial lighting products.
But Acuity didn't sit idly by, it embraced the LED lighting trend and has been snapping up technologies in the Internet of Things space. In fact, nearly half of the company's revenue stems from LED lighting -- and that's with only 35% of all U.S. lighting expected to be LED by 2020.
Many investors had hoped Cree (CREE - Get Report) was the play on LED lighting, but that trade hasn't panned out as expected. Meanwhile, Acuity has been quietly rising, buying up automation and control system technology along with tech for connected shopping experiences.
With construction now on the rise in the residential, commercial and industrial sectors, Cramer said Acuity is a steal, even at 27 times earnings.
Chipotle Mexican Grill (CMG - Get Report) : With the recent E.coli outbreak at Chipotle sending same-store sales down 16% and its shares down 26% over the past three months, is it time to jump back in? Not so fast, Cramer warned.
History can be our guide, Cramer noted. Taco Bell suffered a similar E.coli scare back in 2006 and it took several quarters before sales returned to normal.
Given Chipotle's rich valuation, Cramer said it's too early to attempt to get back into this high-flying stock. The turn isn't likely to come for at least a few quarters, he concluded, but he's fully confident that this great restaurant will indeed get its groove back.
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