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Friday should have been dominated by corporate earnings results, but instead the talk was about potential M&A deals, Jim Cramer told his "Mad Money" viewers.
And that's exactly what they should be focused on come Monday, Cramer said as he laid out his weekly game plan.
On Monday, investors should look for any news surrounding AT&T (T - Get Report) and Time Warner (TWX) , as the former is reportedly interested in buying the latter. They should also look for any news on Qualcomm's (QCOM - Get Report) desire to purchase NXP Semiconductor (NXPI - Get Report) . Keep on eye on Kimberly-Clark (KMB - Get Report) , VF Corp. (VFC) and Visa (V - Get Report) for earnings too.
Next week will be a big week for earnings, with Tuesday in the spotlight. Apple (AAPL - Get Report) is scheduled to report, and Cramer is optimistic about results. He also thinks 3M (MMM - Get Report) and Caterpillar (CAT - Get Report) could deliver good results. It might be too early to expect a rebound in Chipotle (CMG - Get Report) , while maybe now would be the perfect time for Under Armour (UA - Get Report) to snap out of its funk. Without organic growth for Procter & Gamble (PG - Get Report) , it's hard to see the stock moving higher.
On Wednesday, Boeing (BA - Get Report) is scheduled to report, and Cramer still thinks the aerospace cycle isn't done growing. Wait for the conference call before reacting though, he said. Coca-Cola (KO - Get Report) and Norfolk Southern (NSC - Get Report) will also report earnings.
On Thursday, Alphabet's (GOOGL - Get Report) results will be out, along with Amazon (AMZN - Get Report) , for which everyone has high expectations. Conversely, most are negative on Twitter (TWTR - Get Report) heading toward its earnings report, so let's see if the company can surprise to the upside on any of its metrics.
On Friday, Exxon Mobil (XOM - Get Report) and Chevron (CVX - Get Report) will report. Cramer wants to hear the companies' opinion on the upcoming OPEC deal and projections for oil prices. If the companies plan to increase capital expenditures, that's a positive read-through for a company like Schlumberger (SLB - Get Report) .
The bottom line: Don't be too quick to react to headline earnings numbers, Cramer said. Next week will be busy, with a lot of back-and-forth. M&A could dominate the headlines, but investors need to be smart when navigating the moves that could come.
Look closely to see the differences
Sometimes it can be difficult to interpret why stocks perform differently on earnings results, despite being in the same sector and reporting seemingly similar results. That's why Cramer's looking to help his viewers break down the differences.
He pointed to Danaher (DHR - Get Report) and Illinois Tool Works (ITW - Get Report) . Both companies topped earnings-per-share expectations, reported in-line revenue results and provided slightly higher guidance.
But Danaher rallied roughly 4% and Illinois Tool Works fell more than 2%. What gives?
For starters, Danaher's stock price was up just 9% on the year heading into the results. While the gain is good, it's not nearly as high as ITW's more than 20% year-to-date rally. As a result, expectations for Illinois Tool Works were higher than the expectations for Danaher.
When Danaher reported good results, it surpassed expectations, while Illinois Tool Works had a higher hurdle to clear, he explained.
Adding to that, investors seem to be less enthused about the industrial sector overall, so other stocks like Honeywell (HON - Get Report) and General Electric (GE - Get Report) have been paying the price too.
But remember that Danaher performed a breakup earlier this year, so it has less exposure to this out-of-favor sector, while Illinois Tool Works is still very much a pure-play industrial name.
The bottom line: Just because two companies in the same sector report similar results, doesn't mean the situation at both companies is the same, Cramer said.
A Bull and a Bear Walk Into a Bar
The company reported earnings of $2.48 per share, below expectations of $2.60 per share, while revenues came in below estimates as well. Shipment volumes fell 12%, gross margins shrank and management cut its full-year earnings guidance.
So why the rally?
Cramer argued that a short-squeeze likely ignited the stock, as short-sellers were looking to cash in on the decline. Still, this may only be temporary and he's not ready to jump on the bull wagon just yet.
The bear case argues that Boston Beer continues to lose market share in the craft beer industry, as the number of competitors has boomed in recent years. That helps explain why the company lost its growth momentum and why shares have fallen roughly 40% from its 52-week highs.
Despite the decline, it's valuation still isn't that attractive, Cramer said, pointing out that the stock trades at 24 times next year's earnings estimates.
The bottom line: Why pay up for a struggling company like Boston Beer when you can buy a phenomenal company like Constellation Brands (STZ - Get Report) for approximately the same valuation? "I am siding with the bears" on Boston Beer, Cramer said.
AutoZone getting back on track?
Cramer took a closer look at AutoZone (AZO) , a stock that has a great long-term track record, but appears to have lost its mojo. Shares are up almost 75% over the past three years and 45% over the past two years. But in 2016, the stock has gained less than 2%. So is this stock out of gas or simply pausing to refuel?
The stock has struggled to move higher after the company reported somewhat disappointing earnings results over the past two quarters. While AutoZone does have challenges, it's making adjustments to better the business.
Consider that AutoZone is putting a larger emphasis on commercial customers, making sure mechanics have the parts they need. It's also turning some of its stores into "mega hubs," Cramer said, explaining that these locations act as distribution centers for smaller, nearby locations.
AutoZone still sports a very impressive buyback, one that Cramer has considered one of the best in the stock market over the past few years.
Despite the somewhat lackluster recent results, AutoZone is still kicking out strong earnings growth. Can you imagine the kinds of results it will have when times are actually good?, he asked.
The bottom line: "Yes, I still like AutoZone the company," Cramer said, "and AutoZone the stock is inexpensive." It also sports the lowest valuation among its peers, despite having some of the best growth and management. He is still a long-term believer in the stock, regardless of the company's short-term performance.
No Huddle Offense
For the show's "No Huddle Offense," Cramer wanted to recap Friday's session, which had an unbelievable amount of news.
Qualcomm is reportedly offering $110 per share for NXP Semiconductor. The deal feels a little disappointing for NXP shareholders, which is also a holding in the Action Alerts PLUS portfolio.
With a potential AT&T-Time Warner deal set for next week, it puts an "M&A bid" in the market, Cramer said, which is much easier to bet with, rather than against.
Another chief exec that's underestimated? How about McDonald's (MCD - Get Report) CEO Steve Easterbrook. This company still has a lot more innovation up its sleeve and it would be wrong to sell the stock, Cramer said.
Earnings from General Electric weren't a disaster, but they weren't anything to cheer about either. If it weren't for that juicy dividend yield, the stock would likely be headed lower.
Verizon is suffering from price-aggressive competitors, like Sprint (S - Get Report) and T-Mobile (TMUS - Get Report) , while investors got too excited about Union Pacific (UNP - Get Report) , Cramer said. The turn hasn't come yet for this railroad operator.
Finally, Alkermes (ALKS - Get Report) shares rose almost 28%, thanks to positive news surrounding its lead drug. While profit-taking will ensue at some point, this one doesn't seem done going higher, he said.
Although this week seemed busy, just wait until next week gets underway, Cramer concluded.
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