Stocks traded lower on Friday, but, in Jim Cramer’s opinion, this wasn’t necessarily a bad thing. What doesn’t kill the market makes it stronger. He enjoyed the breather to rest up, especially since he suspects that the market will go higher next week.
“The move I’m watching for is the takeout of the Nasdaq (.IXIC)‘s old highs. You know I feel that it is long overdue. We are on such firmer footing these days, versus 15 years ago,” said the “Mad Money” host.
On Cramer’s radar this weekend will be Warren Buffett‘s annual letter, to hear what he has to say about the market and IBM (IBM).
Why the heck did he keep buying IBM when it continued to disappoint on earnings? Does he think he made an error buying a tech stock after warning investors not to do so for years? What is his view on oil after booting Exxon Mobil (XOM) from his portfolio?
“What am I looking for? Obviously Buffett’s cherished worldview, as well as clues for his next hunting ground; it’s been a while since we’ve seen him bag an elephant,” Cramer said.
Another stock that Cramer has his eye on is Popeyes Louisiana Kitchen (PLKI). This stock ran up to $ 66 from $ 61 before its earnings on Wednesday, as investors anticipated that the company would make an announcement to add more leverage to its capital structure.
While there was no announcement, it did deliver in-line earnings and 9.8 percent same-store-sales growth. And while some investors may have been disappointed, Cramer has a feeling that Popeyes was just being conservative.
Could this be the perfect entry point for the stock for the first time in a long time? Cramer sat down with Popeyes Louisiana Kitchen CEO Cheryl Bachelder to find out where the stock could be headed.
“We have had such a good run. What we are proudest of is that we have [been] sustainable quarter to quarter, and reliable performance. Over time, the market gets it right with our stock, so one day? No problem,” Bachelder said.
How the heck could it be possible that two stocks so completely different could be so much alike in growth trajectories? Cramer took a deep dive into the growth between the natural, organic food company WhiteWave Foods (WWAV), and totally inorganic company Monster Beverage (MNST).
“Both are ragers, just selling product like crazy, and even after their enormous moves, both are still must-own stocks, either on an earnings or takeover basis,” said the “Mad Money” host.
WhiteWave reported a few weeks ago, and while it appeared to have an in-line quarter, that was only because it had to significantly ramp up factories to meet the demand for plant-based beverages. The demand for things like almond and soy milk has skyrocketed in the U.S., up 21 percent.
On the flip side, Monster Beverage tore up its numbers with 11.3 percent growth in convenience stores. Now, Monster matches Red Bull’s market share of 34.8 percent of the market. Even Coca-Cola (CCE) is looking to up its stake in Monster to 16.7 percent.
“They may not share the same culture or the same customers, but they share rising revenues and profits, so count me in for this explosive cocktail of better and faster living from plants and chemicals,” said Cramer.
Another stock that was hit with earnings was Blackhawk (HAWKB). This company is the leading global distributor of prepaid cards and gift cards, representing some 600 brands and running loyalty programs for more than 2,000 business partners.
It reported on Thursday morning delivering an 11-cent earnings beat from a $ 1.05 basis. The stock quickly reversed any gains and dropped $ 4. And while the earnings may have been good, the guidance was murky at best.
What the heck happened? A confused Cramer spoke with Blackhawk Network Holdings CEO Bill Tauscher to find out.
“We released what we thought were terrific numbers from an earnings and revenue standpoint. It turns out that the revenue number was a slight miss to some guidance we gave at the end of the third quarter. But we made this accounting adjustment where we put expenses that were marketing and customer related up as a counter revenue. It doesn’t change the overall number, but it lowered the revenue. We made it very clear in the beginning that we had done that and we actually beat the revenue numbers as well,” Tauscher said.
And even as Nasdaq (.IXIC) flirts with a 15-year high and speculation mounts that tech stocks are now in a bubble, Jim Cramer is putting his foot down once and for all. Enough with the bubble talk already!
If investors what to know what a bubble looks like, there’s no reason to remember all the way back to 2000. Just look at last year!
During the first quarter of 2014, the market was flooded with initial public offerings from cloud-based software companies. A new one was hitting the marketplace every day, and it was dotcom mania.
“In other words, at the moment, things are not at all bubblicious. Sure the Nasdaq has run, but that’s because so many parts of tech are working, even as many of the old-school, PC-centric players like Hewlett-Packard (HPQ) have been hammered,” Cramer said.
So, stop worrying about all this bubble talk. The high-quality stocks that have been fueling the market this year are nothing like the dotcom techs that burst the bubble last year.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
Acadia Pharmaceuticals (ACAD): “We did a piece on Parkinson’s, and I think they may have something. I like this, but it is speculative.”
NXP Semiconductors (NXPI): “Remember that we are in a pullback mode for some of these Nasdaq stocks. Get it below $ 80 and that’s when you pull the trigger. Don’t be too eager.”