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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.
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 higher, 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 (AZO) : Cramer said this is 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 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. However, 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.
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