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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.
Ollie's Bargain Outlet (OLLI - Get Report) : With the dollar stores getting crushed this quarter, what should investors make of Ollie's, the discount retailer that came public in 2015 and has seen shares rise over 48% so far in 2016? According to Cramer, a lot.
Cramer said Ollie's has a terrific business model that customers love, offering steep discounts of up to 70% off department store prices. The company is also a perfect regional-to-national growth story, with no stores in over half the country.
When he first looked at Ollie's after its initial public offering, Cramer noted the company looked promising, but he was worried about the pending exits of the company's private equity backers. Since then, Ollie's completed a 12 million-share secondary offering, which dinged shares by 3.2%, and this week completed another secondary for 13.7 million shares, which also took its stock lower by 3.2%. But now that the private equity has moved on, Cramer said he'd be a buyer.
When the company last reported, Ollie's posted a 3-cents-a-share earnings beat on a 16% rise in revenue with expanding gross margins and a 3.5% increase in same-store sales. The stock is expensive, trading at 24 times earnings, but given the growth potential and the recent pullback, Cramer said now is the time to buy.
CSX (CSX - Get Report) , Norfolk Southern (NSC - Get Report) and Kansas City Southern (KSU - Get Report) : The railroad stocks have been on fire this year, Cramer told viewers, but that rally is coming to an abrupt end.
After nearly 18 months of declines, Cramer correctly called the bottom in the rails this January. Since that call, shares of CSX and Norfolk Southern have rallied 31% and 50%. What was behind the rally? Cramer said it was a combination or low expectations, big stock buybacks, strong dividends and a more bullish economy.
But after listening to the earnings this quarter, Cramer said it's clear both the amount of cargo the rails are shipping, and the price they're getting for that cargo, are coming under pressure.
Cost-cutting measures will make the rails a lot more profitable when the economy improves, Cramer concluded, but on the eve of interest rate hikes, these now pricey stocks have a lot less dividend protection to cushion any disappointments. While CSX and Norfolk Southern essentially broke even in this shell game, smaller players, like Kansas City Southern, are coming under even more pressure.
Twilio (TWLO - Get Report) : In an exclusive interview, Cramer sat down with Jeff Lawson, founder, chairman and CEO of Twilio, the tech company helping developers build and manage communications in the cloud. Shares of Twilio are up 92% since its IPO earlier this year.
In his first-ever television appearance, Lawson explained that Twilio's goal is to revolutionize communications. He said his company's usage-based revenue model aligns Twilio's success with the success of their customers and supports experimentation and innovation as just about anyone can begin using their service for little cost.
When asked what exactly it does for customers, Lawson said that in the case of Nordstrom (JWN - Get Report) , Twilio helps connect the retailer's network of personal shoppers with thousands of customers via the Nordstrom mobile app. Twilio not only keeps all of the conversations secure, but also links the conversations to other Nordstrom systems.
Lawson said that services like Uber simply wouldn't be possible without a modern, one-to-one communications system, one that replaces antiquated systems that used dispatchers and centralized call centers to get things done.
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