Thu, 30 Jun 2016 10:00 GMT
Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. Here's what Jim Cramer had to say about some of the stocks during the Mad Money Lightning Round Wednesday evening: Dominion Resources : "I think you're fine. You're in good shape." Spark Therapeutics : "They are incredibly speculative. This one makes me uneasy." General Electric : "I think you should own GE." Prospect Capital : "I do not know what they invest in. I say don't buy." Verizon : "I'm not going to recommend it at 52-week highs, but long term it's worth buying." Freeport-McMoRan : "They have a bad balance sheet. I'm going to say don't buy it." Illumina : "This one is a hold but Thermo Fisher Scientific is the better buy." To read a full recap of "Mad Money" on CNBC, click here. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.Click to view a price quote on D. Click to research the Utilities industry.
Thu, 30 Jun 2016 00:07 GMTSearch Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. Tuesday was a relief rally, Jim Cramer told his Mad Money viewers Wednesday. Today's move, however, is a welcome change that is also likely permanent. Cramer said sometimes investors are willing to pay a higher price today because yesterday's price was just too low. That was certainly the case today in several sectors, where investors were re-evaluating what stocks are actually worth. Indeed, the markets have all but forgotten about Brexit, expect to note that thanks to Britain's poor decision, the U.S. will now enjoy low interest rates for a lot longer that anticipated. Today's rally was also driven by deals, with a takeover bid for Diamond Resorts sending those shares up 23.7%, leading to a strong rally in all the travel names including Wyndham Worldwide up 4.1%, Marriott Vacations up 4.5% and Hyatt Hotels up 4%. Even the airlines were sparked into action, with Cramer fave Southwest Airlines spiking 3.9%. Strong earnings from General Mills led to boosts in Kellogg and Kraft Heinz , while Nike rebounded sharply from early losses after investors learned the company has cleaned up its inventory problems. Rivals Under Armour and Lululemon Athletica were also up on the day. Executive Decision: Cliff Hudson For his "Executive Decision" segment, Cramer spoke with Cliff Hudson, chairman and CEO of burger chain Sonic , which recently posted a disappointing 1-cent-a-share earnings beat on weaker-than-expected revenue with a rare decline in same-store sales growth. Hudson said while Sonic is confident in the initiatives it has put in place, the company has been less certain about the shift in consumer behavior seen in May. Promotions have reversed some of the slumping sales, but sales of ice cream and soft drinks continue to lag expectations. When asked about competition, Hudson noted Sonic has always had a ton of competition, from convenience stores to Dairy Queen, all of which want a piece of Sonic's sales. Turning to the issue of wage inflation, Hudson said most of the significant wage inflation has been in states where Sonic doesn't have large footprints, thus the impacts have been minimal. Hudson did tout Sonic's "Limeades For Learning" program, which is committed to donating $15 million to teachers in the communities they serve over next five years. In addition to education, Sonic is also committed to its stock buyback program, which currently stands at $155 million. Retail Survival Guide In his "Retail Survival Guide" segment, Cramer took a look at six ailing department stores to see which ones have what it takes to survive. He compared Kohl's , Macy's , Nordstrom , Dillard's , J.C. Penney and Sears Holdings , all of which are well off their 2015 highs. In his analysis, Cramer ranked each of the companies against four metrics, their decline in both sales and earnings, the strength of their balance sheets and their strategic flexibility to ward off Amazon.com . On the revenue front, both Nordstrom and J.C. Penney are declining the least, while Macy's and Sears are declining the most. Positions change on the earnings front, however, with Penney and Macy's faring the best, with Nordstrom and Sears bringing up the rear. As for the strength of their balance sheers, Cramer gave Dillard's the highest marks, with Nordstrom coming in second. The worst of the bunch were Penney and Sears, both of which have mountains of debt. Finally, on the flexibility metric, Cramer felt Nordstrom and Penney were again in the best position to compete, while Dillard's and Sears were in the worst positions. Adding up all of the scores, Cramer concluded that Nordstrom and J.C. Penney were in the best shape, with Macy's and Kohl's tied for fifth and Sears a distant last place. He said that he would not be a buyer of any department store long term, but for a trade Nor[...]
Wed, 29 Jun 2016 22:21 GMT
With all that's going on in the world from Brexit to Zika, U.S. investors may want to consider keeping their money at home in multi-family real estate projects. But not necessarily in publicly traded real estate investment trusts. " Buying real estate is better done on a direct basis," said Eric Jones, chief investment officer of Dome Equities. "Public REITs are too correlated to the public market and interest rates in particular. Jones spent 11 years at Citibank and GE Capital prior to joining Dome Equities. While at Citibank, Jones spent two years directing its private bank's private equity co-investment platform. The private bank platform was the genesis of Dome. Dome Equities is a New York-based private equity real estate investment firm specializing in core plus, value-add, and opportunistic strategies in U.S. Real Estate with a current focus on multifamily rental properties. Jones said he is targeting 7% to 9% yields on his portfolio, with a low-teens total return. Jones said higher income suburban locations in major metropolitan areas will outperform urban core for apartment investment. In his view, new supply in urban core areas with slowing growth coupled with investors currently paying too low of cap rate is a recipe to lose money, even in multi-family apartments. He prefers to focus on regions with above-average growth in prime renter demographics and regional economies with strong economic vitality. Jones said his favorite locations right now include North Miami Beach, Orlando, Dallas and Denver. Jones said the demographic trends are also compelling for the multi-family apartment space as millennials are still primarily renting. "Home ownership rates for people under the age of 35 have not found a bottom yet," said Jones. "They are getting married later in life. That makes them rent longer. And there is a record number of millennials living at home."
Wed, 29 Jun 2016 21:24 GMTIn a challenge to Amazon.com Prime, Walmart said on Wednesday that it will offer a 30-day trial of ShippingPass, its two-day, unlimited shipping service. "Starting today, we're offering a free 30-day trial of ShippingPass, which gives you unlimited two-day shipping," said Fernando Madeira, CEO of Walmart.com U.S., in a release. "If you already have ShippingPass, there's also good news -- we're going to give you an extra month for free. ShippingPass is about half the price of similar programs out there at just $49 a year, and customers who are using it, love it. They shop on Walmart.com more often to take advantage of our low prices, fast shipping and added benefits of no minimum order requirements and free online or in-store returns." Amazon Prime, which includes two-day shipping as well as other benefits, costs $99 a year. Walmart's move comes as Amazon is expected to launch its second annual Prime Day, which took place last year on July 15. Walmart reported last month that "global e-commerce sales rose 7% in the first quarter, weaker than the 8% in the previous quarter and far below the 20% increases seen less than two years ago," according to a report by the Los Angeles Times. "[Walmart's] U.S. business was a little better but still disappointing. That came as the company reported overall strong first-quarter results that were a bright spot in an otherwise somber season for many retailers." the newspaper said. Walmart shares closed Wednesday at $72.46, up 1.3%. Amazon closed at $715.60, up 1.1%. Facebook is altering its News Feed again, this time to favor more posts from family and friends over followed Pages. "Facebook was built on the idea of connecting people with their friends and family," said Lars Backstrom, Facebook's engineering director, in a company post. "As we say in our News Feed values, that is still the driving principle of News Feed today. "Our top priority is keeping you connected to the people, places and things you want to be connected to -- starting with the people you are friends with on Facebook. That's why today, we're announcing an upcoming change to (the) News Feed ranking to help make sure you don't miss stories from your friends." Backstrom conceded the change "may cause reach and referral traffic to decline for some Pages. The specific impact on your Page's distribution and other metrics may vary depending on the composition of your audience." Read this report by TheStreet's Eric Jhonsa to learn how Facebook's latest move fits in with its overall financial health and corporate objectives. Facebook shares closed Wednesday at $114.16, up 1.3%. Now here's a possible technology breakthrough that could really change the concert-going experience. As a native son of the state that has brought us the likes of Frank Sinatra, Cory Booker and Philip Roth, I'm proud to say I've shelled out more than a few dollars over the years to enjoy Bruce Springsteen from the vantage point of the pit, right in front of the stage. It's always quite a rockin' night. But in recent years it's become more difficult to get an unobstructed view of the Boss and the E-Street Band. Blame that on all the iPhones being hoisted into the air. But that could change one day -- hopefully soon. Apple has "received a patent for technology that would allow cell phones to be temporarily blocked from shooting photos or videos, after receiving infrared transmissions from a broadcasting device," according to a report by SiliconBeat. "A transmitter can be located in areas where capturing pictures and videos is prohibited (e.g., a concert or a classified facility) and the transmitters can generate infrared signals with encoded data that includes commands temporarily disabling recording functions," said the patent application, according to SiliconBeat. Now that's something to look forward to further on up[...]
Wed, 29 Jun 2016 15:49 GMT
Constellation Brands shares, at around $159, are on a momentum ride to the stars, up 12% so far this year and 37% over the past 52 weeks. That's why TheStreet's Jim Cramer is particularly interested in the beer, wine and spirits purveyor's earnings, expected Thursday before the open. This is one of the few consumer packaged-goods companies out there growing sales at a double-digit rate, Cramer, co-manager of the Action Alerts PLUS portfolio, said Wednesday from the New York Stock Exchange. The Modelo and Corona beer brands have really helped accelerate sales, he explained, as have Constellation's wine business and the recent acquisition of a craft beer company. Here's a tip, he said: The stock tends to initially trade lower after earnings. Investors who want to be long Constellation should consider buying half a position before the results are released and half after the company reports, Cramer advised. Shares are up nearly 40% over the past 12 months and a whopping 666% over the past five years.Click to view a price quote on STZ. Click to research the Food & Beverage industry.
Wed, 29 Jun 2016 09:57 GMTDefense contractors Lockheed Martin and Northrop Grumman did not experience major setbacks in reaction to Britain's decision to leave to European Union. The third major contractor, General Dynamics , took a minor hit. Based on this notion, military spending in the war to defeat ISIS appears to have trumped the adverse effects of the U.K. decision to leave the European Union. These three stocks began the year on Jim Cramer's list of 38 "anointed" stocks for 2016. This makes them important allocations to consider in a diversified investment portfolio. Cramer owns Lockheed in his Action Alerts PLUS portfolio. Cramer says this stock benefits from continued defense spending and also is known for its consistency in increasing dividend payouts. Lockheed Martin is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells LMT? Learn more now. Let's take a look at the daily and weekly charts for these defense stocks and the guidelines on how to trade them. Here's the daily chart for General Dynamics. Courtesy of MetaStock Xenith General Dynamics closed Tuesday at $133.94, down 2.7% year to date and up 10.1% above its Jan. 20 low of $121.61, but in correction territory 12.9% below its 52-week high of $153.76 set on Aug. 19. The horizontal lines are the Fibonacci retracement levels from the Aug. 19 high to the Jan. 20 low. The stock set its 2016 high of $147.16 on May 17, well above the 61.8% retracement of $141.49. The stock was below this retracement on June 21 before the "Brexit" vote. The stock closed below the 50% retracement of $137.68 on June 24 and after a low of $132.68 on Monday closed Tuesday above its 38.2% of $133.88. Here's the weekly chart for General Dynamics. Courtesy of MetaStock Xenith The weekly chart for General Dynamics has been negative since the week of June 17 with the stock below its key weekly moving average of $138.38 but well above the 200-week simple moving average of $112.32. The weekly momentum reading is projected to decline to 56.62 this week down from 67.21 on June 24. The weekly chart shows a red line through the weekly price bars is the key weekly moving average (a 5-week modified moving average). The green line is the 200-week simple moving average considered the "reversion to the mean". The study in red along the bottom of the chart is weekly momentum (a 12x3x3 weekly slow stochastic), which scales between 00.00 and 100.00, where readings above 80.00 indicates overbought and readings below 20.00 indicates oversold. A negative weekly chart shows the stock below its key weekly moving average with weekly momentum declining below 80.00 in a trend towards 20.00. Investors looking to buy General Dynamics should do so on weakness to $101.63 and $97.74, which are key levels on technical charts until the end of 2016. Investors looking to reduce holdings should consider selling strength to $141.39, which is a key level on technical charts until the end of this week. Here's the daily chart for Lockheed Martin. Courtesy of MetaStock Xenith Lockheed Martin closed Tuesday at $240.91, up 10.9% year to date and up 20.2% since setting its Jan. 26 low of $200.47. The stock set an all-time high of $245.37 on May 12. The stock has been above a "golden cross" since July 24, 2015 when the stock closed at $201.04. A "golden cross" occurs then the 50-day simple moving average rises above its 200-day simple moving average and indicates that higher prices lie ahead. The stock simply traded back and forth around its 50-day simple moving average of $237.77 in reaction to the Brexit vote. Here's the weekly chart for Lockheed Martin. Courtesy of MetaStock Xenith The weekly chart for Lockheed Martin is neutral with the stock above its key weekly moving average of $237.77 and well above the 200-wee[...]
Wed, 29 Jun 2016 00:16 GMTSearch Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. The high-growth game never ends, Jim Cramer told his Mad Money viewers Tuesday. That's why after a nasty two-day selloff, investors couldn't resist the lure of FANG, Cramer's acronym for Facebook , Amazon.com , Netflix and Alphabet , formerly Google. These names have growth, Cramer said, while everything else doesn't. It was just two weeks ago that Facebook, an Action Alerts PLUS holding, announced Instagram crossed another user milestone, and investors were quick to snap up the stock today. Then there's Amazon, up 2.4% today as new research suggested the online company is top of mind for 42% of gift givers. Amazon also expanded its Dash button programming, allowing even more products to be purchased with just a click of a button. Meanwhile, Netflix received a buy reiteration right as the company announced that it only has 7% exposure to the Brexit fiasco. But then there's Alphabet, another Action Alerts PLUS holding. Cramer said Alphabet just doesn't rebound as quick as it used to, prompting him to remove it from his acronym. In its place, Cramer added Broadcom , which shot up 4.2% today and has growth in spades, along with Ulta Salon , a company with so much growth the stock never sold off in the first place. As for the new acronym, well, Cramer said he's still working on that. Perhaps UNFAB? Off the Charts In the "Off the Charts" segment, Cramer checked in with colleague Marc Sebastian to take a fresh look at the correlation between the CBOE Volatility Index, known as the VIX, and the S&P 500 and what the Brexit decision is playing out in the markets. Under normal circumstances, the market and the VIX are opposite one another. When the market falls, the VIX, also known as the fear index, rises. Likewise, as the markets rise, the VIX typically falls. This pattern played out as it normally would during the market's February lows. As stocks bottomed, the VIX saw a big spike. In the weeks that followed, as the market recovered, the VIX slowly fell. Fast forward to late May and early June and the pattern changed. The markets rallied, but the VIX rallied too, signaling the big run up would be short lived. It was. The VIX spiked big as stocks plunged on Friday. But Monday was another story. Both the markets and the VIX fell on Monday, a sign that even though stocks were falling investors were not worried. That sentiment in turn led to today's strong rally. According to Sebastian's analysis, the bulk of the Brexit damage is now behind us, sentiments Cramer shares. Inspired by Insperity Even in a bad market there are bright spots, Cramer told viewers. That's certainly the case with the business process outsourcing firm Insperity , which has seen its shares rise 52% so far this year. Insperity is not some new, sexy IPO, Cramer explained. The company is over 30 years old and provides services like payroll and expense management to over 100,000 businesses. Things at Insperity became interesting in early 2015, however, as the company became aware that Starwood Value, an activist investor, had taken aim at the company. But unlike some activists, Starwood came to Insperity with solutions to improve the business. Insperity took these solutions to heart, appointing independent board members, cutting costs and buying back 12.4 million shares of its own stock. When it last reported in May, the company shot the lights out with a 16-cents-a-share earnings beat with raised 2016 guidance. The company boosted its dividend by 14%, too. Trading at 17.6 times earnings, shares of Insperity are no longer cheap, Cramer noted, but with 60% earnings growth there is still more upside ahead. Investors should expect another 40% gain, he concluded, but there is more room to run for this reinvigorated company. [...]
Tue, 28 Jun 2016 15:44 GMT
Shares of Nike have struggled so far this year and are down more than 15%. How is the company doing? Investors looking for insight won't have wait long because Nike is set to report quarterly results after the close Tuesday. "Nike is a very difficult situation," TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said Monday from the floor of the New York Stock Exchange. The sports apparel company has such sprawling international operations -- including major businesses in the U.S., China and western Europe -- that it's hard to get a read on how it's doing. Looking at other companies for a potential read-through on Nike is also difficult, he said. Finish Line reported good results, but investors didn't care for the earnings from Foot Locker . There's also the resurgent Adidas brand to worry about, Cramer said. Nike's chart -- as outlined by Real Money's Bruce Kamich -- is also discouraging. With all that being said, Nike stock is down significantly from its highs over $68, he said, adding that his favorite in the group is Foot Locker, simply because the stock has been oversold. Analysts expect Nike to earn 48 cents per share on $8.28 billion in revenue.Click to view a price quote on NKE. Click to research the Consumer Non-Durables industry.
Tue, 28 Jun 2016 14:24 GMT
Shares of Apple are up roughly 1% Tuesday after analysts at Cowen called the stock a buy. While Apple is a holding in Jim Cramer's Action Alerts PLUS portfolio, there was something in the report the co-manager does not like: forecasts for an upcoming iPhone "super cycle." "Don't believe the super cycle hype. Ever," Cramer said on CNBC's "Mad Dash" segment. The analysts outline that 2017 is setting up for a mega-year for the iPhone. But Cramer said the term "super cycle" tends to lead to too much enthusiasm. Examples? Think of housing in 2007, coal in 2011 and fracking sand in 2012. All were simply too bullish, he said. "I like Apple," he said, and the stock will likely go up because this report is so bullish. While shares are attractively priced and the balance sheet is strong, Cramer's trying not to get too caught up in the bullish hoopla.Click to view a price quote on AAPL. Click to research the Consumer Durables industry.
Tue, 28 Jun 2016 14:00 GMTLike children of divorcing parents, markets today are happy that the U.K. and the EU are having a dialogue. At least they're talking. At least they can reach a compromise, is the hope. Continuing the analogy with divorce, at the end of the day separation is painful for the short term but staying together in a toxic relationship is very harmful for the long term. Perhaps, slowly, investors are beginning to realize this. For the long term, investors should probably expect stronger efforts from policymakers to reach a sustainable recovery in Europe. As Algebris Investments CEO Davide Serra pointed out: "Europe gets better when it's on its knees; we are on our knees now. They (European politicians) have a Plan B -- the issue is when do they pull the trigger and how." However, investors should not rush into the markets just yet. Just as I warned before the referendum that the markets were celebrating a Remain vote too early, I feel I have to stress that today is probably not the day to buy U.K. stocks hand over fist, even though the FTSE 100, the DAX and the CAC-40 were all up around 2% in morning trading in Europe. As for European stocks, investors should keep pen and paper (or laptop, smartphone or tablet) handy and jot down attractive names to consider for a shopping list, but not jump in yet either. The markets are celebrating the fact that EU leaders are gathering in Brussels on Tuesday for a summit and outgoing U.K. Prime Minister David Cameron will be there. There is hope that things will begin to move towards some form of progress, although Cameron made clear last Friday that Article 50 of the EU Treaty officially kickstarting the withdrawal will only be triggered by his successor. Already, the battle for leadership in the U.K. Conservative party is underway, with former London mayor and top Brexiteer Boris Johnson and current Home Secretary Theresa May the frontrunners, adding to hopes that things are going ahead. The pound has bounced off its lows, rising around 0.5% against the dollar in morning trade in London. But other than that, investors should not expect any more signs of progress. German Chancellor Angela Merkel has already said that no talks, not even informal ones, can begin regarding the U.K.'s deal outside the EU until Britain notifies the bloc that it wants to pull out. Analysts are optimistic that the EU, and the eurozone especially, will be using the Brexit shock as a positive catalyst. "The response by eurozone officials may be more QE and bigger budget deficits," according to HSBC's chief European economist, Karen Ward. This is because the eurozone will probably be hit by an economic slowdown in the U.K., with Ireland, Belgium and the Netherlands the most vulnerable, but also Malta and Cyprus not far behind, as they are the biggest exporters to Britain from the single currency area. But as portfolio manager and macro strategist at Algebris Investments Alberto Gallo said, investors should be aware we are in an environment of QE infinity, where returns on money-printing are diminishing as "the best of the recovery is behind us and there is less yield." Gallo cautioned that there is political risk ahead for Europe and the world as well. Spain is again facing a hung parliament as repeat elections at the weekend have not yielded a result much different from the one last December. Then there is the Italian referendum on the Constitution in October, followed by elections in the U.S. in the autumn and in Germany next year. "Going forward, volatility and tail risk will be more frequent. Benchmark long-only strategies are no longer good for this environment," Gallo added. Investors should be watching the talks in Brussels today and tomorrow for any signs of what the Plan B is and how it will be implemented, to ge[...]
Tue, 28 Jun 2016 13:41 GMTFor most publicly-traded companies, there was never a good time for the Brexit vote. But for the large software companies that market to corporate IT departments, the referendum at the close of the second quarter came at a particularly inopportune moment. Slippage of large accounts from one quarter to the next is a landmine for software companies, resulting in earnings misses and making the last days of a reporting period crucial for sales. "[T]he timing of this exogenous market shock couldn't have come at a worse time," Credit Suisse analyst Michael Nemeroff wrote in a report, noting that "most enterprise-focused software companies -- regardless of size -- sign a large amount of business in the final few weeks of each [quarter]." Nemeroff suggested that well-positioned stocks, given recent declines and their low exposure to Brexit fallout, include Ultimate Software and 2U , with 98% of revenues from the U.S. and none from the UK and Europe; Paycom , with 100% from the U.S.; and Synchronoss , which generates 90% of its top line in the U.S. and 10% in the UK and Europe. Higher risk companies include Open Text and Verint Systems , each with more than 30% of sales in Europe; Cornerstone OnDemand , with 30% in Europe; and Adobe , with 3% in the U.K. and 22% in Europe. In an earnings call before the vote, Adobe CEO Shantanu Narayen told investors that Brexit had not been an issue in the company's sales meetings. "There isn't a customer on the planet that we go visit where digital disruption is not top of mind, it's a line item in everybody's budget and they are all talking about how they are going to aggressively transition to digital experiences," he said. In Adobe's favor, its quarter does not end in June. Kirk Materne of Evercore ISI suggested in a post-Brexit report that investors take a look at some of the "quality growth names that do not have a June Q end" like Adobe, Salesforce.com , Veeva Systems , Splunk , and Palo Alto Networks . Long-term risk to the sector is low, Materne added. While SAP SAP generates 44% of its business in Europe, the Middle East and Africa, most software vendors obtain about 21% of their sales from EMEA and just three to four percent from the U.K. Tyler Technologies and Ultimate Software have "essentially no exposure" to EMEA, the analyst noted. Oracle and Microsoft have nearly 30% and 20% revenue exposure, respectively, to EMEA markets, Materne suggested, but are well positioned because of their balance sheets. Cyber security companies Fortinet and Check Point Software generate 37% and 35%, respectively, of their sales from the EMEA, Gray Powell of Wells Fargo Securities noted in a report. Companies with less EMEA exposure include CyberArk (27%), Symantec (25%), Proofpoint (18%), Palo Alto (18%), and FireEye (14%). Powell suggested that while Brexit will not likely have a great impact on second-quarter demand, it could weigh on guidance for subsequent periods. "[I]f market volatility remains in place through July -- then we would expect most security companies to guide Q3 conservatively," he wrote. "This is because August is always a slow month due to summer vacations which means that a higher-than-normal percentage of demand could be pushed into the month of September if July is soft." MKM Partners analyst Kevin Buttigieg created a Brexit-bucking "wish list" for software stocks. Pluses include higher exposure to smaller businesses that do more business in the U.S. and less in Europe, fewer dealings with the financial sector, recurring revenues and high margins and lower valuations. Few firms can che[...]
Tue, 28 Jun 2016 13:04 GMTAs you seek safe-haven stocks in the aftermath of the Brexit meltdown, consider the tech giants, Facebook and Google parent Alphabet . They have the size and high-demand services to withstand downturns. To be sure, both companies suffered with the rest of the market Monday. But Facebook and Google should provide growth opportunities -- perhaps a 30% upside. Both companies have expanded their offerings. Facebook is projecting strong growth for the next five years. Alphabet can boast of high profit margins. These stocks should be on your radar as "defensive growth" plays with considerable upside. Facebook is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stock here. Want to be alerted before Cramer buys or sells FB? Learn more now. Facebook Facebook has beaten earnings expectations for the last four quarters. Moreover, Facebook has expanded its portfolio of businesses with WhatsApp, Instagram, videos, news consumption and virtual reality platforms. The company is projecting 34% per year earnings per share (EPS) growth for the next half a decade. Trading at a PEG ratio of 0.91, Facebook shares are among the cheapest for a large tech stock. The company has 1.6 billion active users, and more importantly a growing ad business. It is also expanding its businesses in video and virtual reality. The 44 analysts offering 12-month price forecasts for Facebook have a median target of $145, pointing to the nearly 30% price appreciation potential from current levels. Investors who avoided Facebook because of the high stock price can now take advantage of the recent weakness. To be sure, the stock pays no dividends because it's on a growth curve. But its annual free cash flow is becoming stronger with each passing year. Churning out billions in rising FCF, Facebook is exactly where Apple was a decade ago. Facebook is a growth stock winner in what is likely to be a tough year for markets. Alphabet Alphabet shares are down 11% in 2016. The lower price offers an opportunity, though. The company offers mid-teen earnings growth. It has an upside potential in excess of 30% over the next year. Alphabet's ad/search business is a major cash cow. ALPHABET is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stock here. Want to be alerted before Cramer buys or sells GOOG? Learn more now. Moreover, Alphabet is multi-faceted, including not only its popular search engine, but also ads, maps, apps, YouTube and Android and the related technical infrastructure. The company has been innovative, as well. It offers Google Fiber, which is likely to be a strong competitor to AT&T, Promoted Pins, Self-Driving Cars/Vans, Google Assistant and Google Home and a possible online TV service. While its Moonshot factory arguably hasn't done as well, that tiny business is a relatively small part of the overall landscape. But its strategy of adding other parts is a long-term growth positive. The company's massive cash war-chest, coupled with minimal debt, also makes Alphabet among the safest companies around. Its nearly 22% profit margin, high return ratios and projected revenue growth are other positives. At a PEG ratio of 1.23, Alphabet is Brexit-proof. Accumulate the stock at every dip and set yourself up for major gains. --- Post-Brexit anxiety is pummeling global markets. If you'd rather avoid stocks and bonds altogether during this period of extraordinary volatility, I know a way you can make a guaranteed $67,548 over the next 12 months. In fact, this moneymaking technique is so successful and simple, you might [...]
Tue, 28 Jun 2016 10:00 GMTSearch Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. Did you miss last night's "Mad Money" on CNBC? If so, here are Jim Cramer's top takeaways for today's trading. Twilio : In his "Know Your IPO" segment, Cramer took a look at Twilio, the cloud communications company that came public last Thursday at $15 a share only to rocket 94% to $29 by the close of its first day and another 3% today. Cramer explained that Twilio allows companies including Uber, Nordstrom and Facebook's What's App to add real-time communications services to their applications. The company offers everything from voice messaging, call recording, text messages and even embedded video services for developers of all sizes. Twilio boasts 28,000 active customers and charges fees based on customers' usage, meaning that as Uber and Facebook expand their user bases, Twilio shares in the profits. That's how the company saw 78% revenue growth in 2014 and accelerated that to 88% in 2015. Twilio is not without some risk factors, however. The company is not profitable and is playing in an unproven market. Twilio also derives 15% of its revenue from a single customer, Facebook, which could decided to built its own platforms. Then there's Twilio's valuation. The stock now trades at 13 times sales, or factoring in its growth rate, 7.5 times 2016 sales. That's higher than the current valuation of Salesforce.com . But valuation aside, Cramer said he thinks Twilio is a winner on any weakness. Idexx Labs : In an exclusive interview, Cramer sat down with Jonathan Ayers, chairman and CEO of Idexx Labs, an animal health products and services company. Ayers said when it comes to our pets and their care, the sky's the limit. That's how a company like Idexx can still see 5% organic growth in times of recession, as the company did in 2009. Pets are not just an American phenomenon. Ayers noted that Idexx sees Europe still as an emerging market for the company, while other countries, like Brazil, have 75 million pets and almost no veterinary care. Ayers went on to explain that Idexx' new urine analyzer for cats can give pets a voice and tell vets what's wrong in just three minutes, and is more accurate than traditional testing. Since testing is done on a continual basis, Idexx enjoys lots of recurring revenue. Cramer concluded that Idexx is the type of stock you buy when Brexit takes the entire stock market lower. To read a full recap of "Mad Money" on CNBC, click here. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here. Click to view a price quote on TWLO. [...]
Mon, 27 Jun 2016 23:51 GMTSearch Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. Britain's decision to leave the European Union was the "dumbest financial mistake I can ever recall," Jim Cramer told his Mad Money viewers Monday. Even though it has only been a few days since the ballots were cast, the true cost of British independence from the EU is now becoming apparent. Cramer explained that the decision to leave boiled down to two issues, the eight billion pounds a year that the British were paying to stay in the EU and the flood of immigrants they were forced to accept. But while the eight billion seemed like a hefty sum last week, the stocks of Royal Bank of Scotland and Lloyds have lost over 12 billion pounds in just two days. But that's only the beginning, Cramer noted. Without the 200,000 immigrants a year entering Britain, property prices will certainly fall, and the British pound will only continue to devalue, something that will be felt by all. These are just a few of the costs we know about, Cramer said, and they already far outweigh the much-hyped savings. That's why Cramer said he's not worried about other countries following Britain to the exits. "I doubt any other country is dumb enough to follow," he said. Meanwhile, here in the U.S. stock market, Cramer said prices will continue to fall and are almost at levels where he'd advise investors start buying the dip. Nothing Worth Buying There just aren't enough sectors worth buying, Cramer told viewers. Normally, he would be aggressively buying a big two-day sell off like we've seen, but with earnings fears everywhere, the right time to buy remains illusive. Just over 20% of the S&P 500 is technology, Cramer explained, and that sector is the most levered to Europe. Coming in next is finance. And while the U.S. banks aren't at risk, they are linked to Europe, at least for the time being. The third largest sector in the S&P is healthcare. Cramer said here, there is hope because the sector appears to be bottoming, except for biotech. He recommends Bristol-Myers Squibb and Johnson & Johnson . Beyond healthcare are the consumer staples and the energy sectors. The staples just haven't fallen far enough, Cramer noted, while oil stocks remain trapped by crude prices hovers just below $50 a barrel. That leaves only domestic retail as an attractive bet, but only Ross Stores , Kroger and Dollar General seem to be immune to the pull of Amazon.com . Cramer concluded the only sectors really worth buying are the usual recession names -- mainly gold, utilities and telecoms -- and those aren't enough to get him excited about bottom fishing. Know Your IPO In his "Know Your IPO" segment, Cramer took a look at Twilio , the cloud communications company that came public last Thursday at $15 a share only to rocket 94% to $29 by the close of its first day and another 3% today. Cramer explained that Twilio allows companies including Uber, Nordstrom and Facebook's What's App to add real-time communications services to their applications. The company offers everything from voice messaging, call recording, text messages and even embedded video services for developers of all sizes. Twilio boasts 28,000 active customers and charges fees based on customers' usage, meaning that as Uber and Facebook expand their user bases, Twilio shares in the profits. That's how the company saw 78% revenue growth in 2014 and accelerated that to 88% in 2015. Twilio is not without some risk factors, however. The company is not profitable and is playing in an unproven market. Twilio also derives 15% of its revenue f[...]
Mon, 27 Jun 2016 21:01 GMTShares of Dick's Sporting Goods were caught up in the "Brexit"-induced selloff Monday, shedding 3% to close at $40 on weak volume despite the news that the company submitted bids on 17 Sports Authority stores nationwide. Other retailers bid on only one store, according to Reuters' sources. Sports Authority filed for Chapter 11 bankruptcy protection in March. After efforts to find a buyer who could continue to operate the company as a going concern failed, the Englewood, Colo.-based retailer decided to start liquidating its inventory. There were rumblings that privately held sports retailer Modell's and U.K. retailer Sports Direct International were interested in jointly purchasing between 100 and 200 Sports Authority stores. Under the plan, the stores would continue to operate under the Sports Authority banner. However, those plans fell through, and the two entities ended up bidding on none of the available Sports Authority stores. If Dick's bid is approved, the company will add to its lead as the largest sporting goods retailer in the U.S with over 600 stores. Bids for the sale of 320 of Sports Authority's 450 locations were due last Thursday with an auction based on those bids to follow on Wednesday. Despite the loss of one of its main competitors, Dick's sees the immediate impact of Sports Authority's demise as being minimal thanks to industry headwinds. Earlier this year, Dick's lowered its current-quarter earnings to between 62 cents and 72 cents per share against Wall Street's 78 cents per share expectations. "We're looking at this as some short-term pain that we're willing to endure for the long-term benefit of our shareholders," said Dick's CEO Edward W. Stack following the company's earnings release in May. "Given the expected near-term liquidation activity in the market, we have adjusted our guidance to contemplate this dynamic. Over the longer term, we remain confident in our ability to aggressively capture displaced market share and to strengthen our leadership position." One of the major headwinds facing the sports retail industry is the oversaturation of bricks-and-mortar stores, according to a Credit Suisse note from April. "Excess store growth has been one of our key concerns, with growth accelerating over the last couple of years," the note read. Additionally, the retail sector as a whole has been struggling to cope with the disruption caused by online retailers like Growth Seeker holding Amazon and the increase of direct-to-consumer sales at vendors like Nike and Under Armour , another Growth Seeker holding. "You are seeing retailers make a push online, expanding their online presence in an attempt to reach consumers in the way that they want to shop," said Chris Versace, Fabian Wealth Strategies and Growth Seeker co-portfolio manager. However, that impact does not mean sports retail is dead in the water. For the shoppers who do still like to visit stores, Dick's is well positioned to scoop up the customers Sports Authority is leaving behind. "As we saw when Borders and Circuit City fell, consumers will move to other locations, not forgo spending," Versace said. Editor's Note: This article was originally published at 2:50 p.m. EDT on Real Money on June 27. Click to view a price quote on DKS. Click to research the Specialty Retail industry. [...]
Mon, 27 Jun 2016 13:06 GMTIs the bear finally here? A week ago the weekly charts were flashing technical warnings despite the high probability that he U.K. would vote to stay in the European Union. Even with the Dow Jones Industrial Average closing above 18,000 on Thursday and with the S&P 500 within 1% of its all-time high, weekly momentum (12x3x3 weekly slow stochastics) continued to decline. This technical setup was a clear warning that stocks would be vulnerable given a vote by the U.K. to leave the European Union. The weekly charts are now negative for all five major U.S. equity averages, which is a clear signal that 2016 would be "the year of the bear." All five now have year-to-date losses. The Dow 30 is down just 0.1% with the S&P 500 down just 0.3%. The Nasdaq Composite NDAQ is down 6% year to date, with transports down 2.5% and the Russell 2000 down 0.7%. The Nasdaq and Russell 2000 ended the week in correction territory with declines off their all-time highs of 10% and 13%, respectively. Transports have fallen into bear market territory 21.4% off its all-time high. Here's how to trade the five major U.S. equity averages via the exchange-traded funds that track them. The Dow Jones Industrial Average can be traded using the SPDR Dow Jones Industrial Average ETF , aka Diamonds. The S&P 500 can be traded using the SPDR S&P 500 ETF Trust , aka Spiders. The Nasdaq is best traded using the ETF that represents the Nasdaq 100, the PowerShares QQQ Trust ETF , dubbed QQQs. The Dow Jones Transportation Average can be traded using the iShares Transportation Average ETF . The Russell 2000 can be traded using the iShares Russell 2000 ETF . Here are the daily charts and trading levels for the five stock market ETFs. Diamonds Courtesy of MetaStock Xenith The weekly chart for Diamonds stays negative with the ETF below its key weekly moving average of $176.26 and still well above its 200-week simple moving average of $162.42. The weekly momentum reading ended last week at 56.63 down from 67.04 on June 17. Investors looking to buy this ETF should hold off as the downside risk is to $145.45 by the end of 2016. Investors looking to reduce holdings should do so on strength to $174.99, which is a key levels on technical charts until the end of this week. Spiders Courtesy of MetaStock Xenith The weekly chart for Spiders remains negative with the ETF below its key weekly moving average of $206.44 and still well above its 200-week simple moving average of $185.59. The weekly momentum reading ended last week at 66.64 down from 79.60 on June 17. Investors looking to by Spiders should hold off as the downside risk is to $163.38 by the end of 2016. Investors looking to reduce holdings should do so on strength to 206.91, which is a key level on technical charts until the end of this week. QQQ Courtesy of MetaStock Xenith The weekly chart for QQQ remains negative with the ETF below its key weekly moving average of $107.10 and still well above its 200-week simple moving average of $91.64. The weekly momentum reading declined to 54.15 down from 65.01 on June 17. Investors looking to buy QQQ should hold off as the downside risk is to $96.72, which is a key level for the remainder of 2016. Investors looking to reduce holdings should do so on strength to $206.91, which is a key level on technical charts until the end of this week. Transports Courtesy of MetaStock Xenith The weekly chart for the transportation ETF stays negative with the ETF below its key weekly moving average of $137/06 and just below its 200-week simple moving average of $132.46. The weekly mom[...]
Mon, 27 Jun 2016 08:45 GMTBritish Prime Minister David Cameron once warned that the peace and stability of Europe were at risk if the people voted to leave the European Union. The warning came to be derided by the "leave" camp as his Armageddon speech. Well, the public duly voted to leave in last Thursday's shock referendum result. And, quicker than Cameron could possibly have imagined, Armageddon has broken out. The war is not on the battlefields of Europe, but in the bloody arena of British domestic politics. Nobody has any clue how to proceed. Other European leaders have been preparing their strategies for a possible Brexit. While they might not agree on how quickly to move forward, or whether to punish Britain or try to reach a pragmatic deal, there is little sign of fundamental disagreement on the principles. If the U.K. wants out, so be it. It cannot have access to the single European market without also accepting the free movement of labor. Membership of the single market implies the right of all Europeans, from Greece and Poland in the East to France and Portugal in the West, to live and work in Britain. There will be no concessions on that. And if Germans and Italians can't work freely in Britain, Britons won't be able to work freely in in Germany or Italy. On the British side there is no plan in place. The "remain" camp, led by the government, was unprepared to lose the referendum vote. The leavers, who campaigned on a promise that Britain would "take back control" from Europe, were unprepared for victory. Prime Minister Cameron himself has already fallen on his sword. The Conservative Party, which he first called on to "stop banging on about Europe" and, when that didn't work, tried to unite by calling his ill-judged referendum, is now tearing itself apart as it battles to replace him. In the turmoil, the hard work of planning is on hold. In the leadership struggle, much of the Brexit faction supports Boris Johnson, the charismatic former Mayor of London who led the "Vote Leave" campaign to a victory that seemed to take him by surprise. But Johnson is a journalist-turned-politician who in neither profession has ever let the facts get in the way of a good headline. So there is a powerful "stop Boris" campaign, supported by some more thoughtful and responsible Brexiteers as well as virtually everyone on the other side of the Conservative Party's great divide. He is seen as ill-suited to lead the country through a crisis largely of his own making. Exactly who would have the stature and support to stand against him is unclear, although there are plenty of names being thrown about. But Britain is about to embark on the most difficult and important negotiation in a generation. The threat is not just to our economy, to our ability to trade with and offer financial services to the vast market of 450 million people on our doorstep. It is a threat to the to the rights of our own people to travel and work in Europe. The rights of the 1.2 million Britons working or in retirement in the EU are in the balance. Brexit will restrict the future choices of our children. It will reduce the options for British scientists to work with their continental peers, for British universities to take part in international initiatives and exchanges for British qualifications in medicine or teaching to be recognized abroad. With so much at stake, Britain needs a leader with gravitas, not a shambling clown whose reputation with the crowd rests on his readiness to be photographed kissing a fish, waving a Cornish pasty, or hanging helplessly in mid-air after getting[...]
Fri, 24 Jun 2016 20:49 GMT
It's tough to go down more than the 3% that Britain was down, as they are the epicenter of this, not us. But the complacency of today's opening was too much for me. Now we are getting more realistic. Let's not be glib. I am not worried about systemic risk here. Our banks have never been stronger. Our companies are flush with cash. The world will grow more slowly than it is now and our companies will be ready for that. We will be the safe haven. But here's what I am worried about -- European banks. Lloyds shares are off 24%, Royal Bank of Scotland has lost 22%, Barclays is down 20%, Deutsche Bank has dropped 16% and Credit Suisse has shed 15%. That's very disconcerting. These moves are ugly, and they aren't the type of thing that happens in a vacuum. This is what you should pay attention to, not our banks or our industrials or anything else except oil and interest rates. Oil is bad for the bull and interest rates are terrible for the banks. This is a distinctly subpar situation. (Check out other Real Money columnists take on the banks here, here and here.) Editor's Note: This article was originally published at 1:31 p.m. EDT on Real Money on June 24.Click to view a price quote on LYG. Click to research the Banking industry.
Fri, 24 Jun 2016 13:35 GMTWell, the unimaginable has finally happened. The 17% chance of a ""Brexit"" has come to pass and global markets are paying the price for a political situation. Prime Minister David Cameron of the U.K. has in essence stepped down, but said he will stay on till October, by when Britain should get a new PM. Our futures are indicating a lower open. However, European markets are well off their lows, while our own equity futures are well off the lows of the night. Our futures were off a lot more a few hours ago, when the vote in favor of Britain leaving the EU was first made public. This is mainly an EU issue and a Britain issue with global ramifications, but not to the extent that people might think. Yes, the dollar will strengthen, yes the yen has strengthened, yes there is a knee-jerk reaction to run to gold. However, in the big picture not much will change after all is said and done. George Soros will make a killing on his bet against the British pond, but already the pound is at the high of the day vs. the greenback. The Bank of England has just said that it stands ready to inject up to 250 billion pounds ($342 billion) into the British financial system if required. The FTSE 100 is down around 5% after having plunged around 8% at the open, and has pretty much given back just what it gained in the last five trading days. It is back at last Thursday's levels, which in the big picture is not as bad as feared. Of course, the Asian markets like Hong Kong and Japan got hammered due to the fact that they were closed by the time the European markets opened. Shanghai was barely down given the events of the day, closing lower by 1.3%. Can our markets react as calmly as the Chinese markets did? I doubt it. However, I have never been happier that our markets did not move up in the last five or six days like the European markets did. Maybe our markets had already sussed out that "Brexit" was a go, despite the odds makers saying there was virtually no chance of that. Given the fact that we did not participate in the upside the last week or so, maybe our drop will also be small relative to the European markets and more importantly wash out the excess in our system. The key as far as investors here at home is to not give in to the panic that the headlines, the talking heads and the pundits, swamis and gurus will try to introduce into the trading environment today and for the next few days. There is a lot of uncertainty at the moment globally, and most importantly, it will take up to two years for Great Britain to leave the EU, and a "Brexit" does not mean a global economic collapse. Just like the global markets recovered from the dotcom crash, the horrific fallout from 9/11, the global subprime thievery, "Brexit" will be a long and drawn-out process and most importantly, pales in comparison to the afore mentioned events. In essence, the "Brexit" event just means that we have to find a way to turn the current short-term volatility into an opportunity. Editor's Note: This article was originally published at 6:17 a.m. EDT on Real Money on June 24. [...]
Fri, 24 Jun 2016 12:34 GMTEuropean Commission President Jean-Claude Juncker is pushing for quick negotiations on the U.K.'s exit from the European Union, implying he doesn't want to wait until David Cameron steps down as Britain's prime prime minister this autumn. He told journalists should start the exit process "as soon as possible, however painful that process may be. Any delay would unnecessarily prolong uncertainty.'' He added: 'We stand ready to launch the negotiations swiftly, swiftly with the U.K.'' Earlier at 10 Downing Street in London, Cameron had said he would step down by October so that a new Conservative prime minister would lead the exit negotiations, thereby injecting more uncertainty into the process. He said it would then be up to his successor to invoke Article 50 - the two-year process of negotiating a departure from the E.U. under the Lisbon Treaty, the bloc's governing legislation. The two-year divorce process applies only to ending the current relationship with the E.U. It does not apply to striking a new trade deal with the EU which would have to be negotiated separately. Other major players sang from different hymn sheets, with German Chancellor Angela Merkel calling for "calm and reflection" and French President Francois Hollande urging that "the procedures foreseen by the treaties will be rapidly applied." Earlier in Brussels as Europe was still waking up to a post-Brexit hangover, the heads of the E.U's other institutions called for sober calm and unity, as did the NATO secretary general. "It is a historic moment, but for sure not a moment for hysterical reactions," said E.U. President Donald Tusk, speaking at the Justice Lipsius building where E.U. summits are held. "As you know, the EU is not only a fair-weather project." "Today, on behalf of the 27 leaders, I can say that we are determined to keep our unity as 27," added Tusk, who served as Poland's prime minister from 2007 to 2014. "For all of us, the Union is the framework for our common future. He also offered reassurances that there will be "no legal vacuum," saying that "until U.K. formally leaves the European Union, E.U. law will continue to apply to and within the U.K. and by this I mean rights and obligations." Already next week, Tusk plans to propose that leaders of the E.U.'s 27 other member countries begin a "wider reflection on the future of our Union," starting with an informal gathering in the margin's of next week's previously scheduled E.U. summit. A bit later at the European Parliament down the road, the assembly's president Martin Schulz spoke of a "difficult moment" for both sides. He added: "We have to now from a legal and from a procedural point of view to assess what are the necessary next steps,' including what the vote means for triggering Article 50. Schulz said that E.U. legislators would hold an extraordinary plenary session next Tuesday, where they will vote on a resolution analysing the outcome of the U.K. referendum and the way forward. And at NATO on Friday, Secretary General Jens Stoltenberg said the U.K.'s position in the organization remains unchanged, and that the country will remain a "strong and committed ally, and will continue to play its leading role in our alliance." He also said that NATO remains committed to closer cooperation with the E.U., and will step up at that cooperation at next month's summit in Warsaw "because together we a[...]
Thu, 23 Jun 2016 23:58 GMTSearch Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. Britain's vote on whether or not to leave the European Union is not the only issue that matters, Jim Cramer told his Mad Money viewers Thursday. Out in Silicon Valley, for instance, the focus is not on Europe, it's on innovation and what the world will look like over the long term. Cramer said Amazon.com is worshipped and feared because it continues to change the face of retail. There is a whole industry of companies that help other companies compete with Amazon's relentless innovation. Then there's Facebook , an Action Alerts PLUS holding, which has the business model that everyone craves. Facebook's content is provided by its users, for free, and advertisers can target precisely who they want. That's how a company like Twilio and soar 91% on its IPO. Facebook's What's App is Twilio's largest customer. Cramer noted that Microsoft is still talked about in Silicon Valley, but only in reference to its bid for LinkedIn . And then there's Action Alerts PLUS holding Twitter , which is always abuzz with chatter as everyone ponders who might snap up the ailing platform given its insanely cheap share price. All of these companies are not focused on "Brexit," Cramer concluded. They're focused on what comes next. What's Up With Micron? Did Micron Technologies get its groove back, or is the stock just playing catch-up with its peers? Cramer said today 10% move in the stock is a result of two major turns in the semiconductor space. The first turn is a long-awaited rise in DRAM prices. After a wave of consolidation, the over-supply is finally gone and the major players -- Texas Instruments , Nvidia and Broadcom , along with Micron -- are all the beneficiaries. Then there's the consolidation in the flash memory market, which has helped to buoy prices and raise prices. Western Digital's acquisition of SanDisk, once panned by analysts, is now looking like a smart move. Cramer said Western Digital, with its 4% yield, is an attractive play, as is Micron. He was also bullish on Action Alerts PLUS holding NXP Semiconductors , which is a leader in chips needed for the burgeoning Internet of thing. He said the entire semiconductor group could see another 10% lift higher. Executive Decision: Mark Fields It's not just pure technology companies that are driving the innovation in Silicon Valley. Cramer sat down with Ford President and CEO Mark Fields at the company's Silicon Valley lab that employs over 130 researchers and engineers working to define the car of the future. Fields said Ford is transitioning from being just an auto company to becoming an auto and mobility company, tapping into the $5.4 trillion taxi and ride-sharing market. He said the emerging opportunities in this space are huge. The cars of the future will not just be about getting people from point A to point B, Fields said. It's about human progress and the societal impacts of reducing traffic congestion and accidents as well as the quality of life for millions of people. Ford is also working with cities on smart parking systems. Fields said that 30% of wasted fuel is consumed looking for parking in major cities and reducing that number is a top priority. But Ford is also integrating new technologies into the cars of today. Fields said that Ford's Sync communication and entertainment platform is entering its third generation and Ford will grow f[...]
Thu, 23 Jun 2016 23:26 GMTIt has been game on for Grand Theft Auto publisher Take Two Interactive . The company, which also develops well-known titles Red Dead Redemption, NBA 2K, Civilization and WWE 2K, ended fiscal 2016 with its third consecutive year of stronger-than-expected sales and profit. Sales for the year-ended March 31 fell 6.4% to $1.56 billion, as last year benefited from a more extensive title release slate such as the launch of Grand Theft Auto V on PlayStation 4 and Xbox One. But sales outperformed the company's original outlook of $1.3 billion to $1.4 billion. Earnings for the year tallied $1.96 a share compared to an outlook of 75 cents to $1.00 a share offered at the start of the fiscal year. Sales in the fourth quarter clocked in at $342.5 million compared to guidance for $260 million to $310 million due primarily to stronger than expected results from Grand Theft Auto V and Grand Theft Auto Online. NBA 2K16 also exceeded Take-Two's sales expectations. The better-than-anticipated performance in what remains a crowded videogame space -- made no easier by the competition for consumer eyeballs with Netflix -- has led investors to snatch up Take-Two's stock. Shares have surged 30% over the past year, outperforming the Nasdaq Composite's 4.3% decline. With another solid year under its belt, attention has turned to when Take-Two will unveil Grand Theft Auto 6 to capitalize on GTA 5's success in selling over 65 million copies since its launch a couple years ago. So far, Take-Two has not issued a release date, instead focusing on continuing to upgrade the gameplay for GTA 5 in order to keep consumers hooked. But, seeing as GTA 5 has been on the market for over two and a half years, it's only natural to wonder what's taking Take-Two so long to launch the next iteration in the popular franchise. "We aim for perfection and that takes time," Take-Two Interactive chairman and CEO Strauss Zelnick told TheStreet, adding, "By resting our core products and not being on an annualized schedule we build anticipation." Zelnick pointed out that frequent new content releases for a title like Grand Theft Auto keeps people engaged and drives recurring consumer spending. Meanwhile, it's also natural to wonder if Take-Two's solid performance and bulging cash balance has caught the attention of fellow publishers who may want to bulk up via an acquisition. Take-Two is no stranger to being courted. Rival Electronic Arts made a hostile $2 billion bid for Take Two back in 2008, which was early on in Zelnick's leadership of the company. Now, Electronic Arts appears to be on the acquisition hunt again, and its CEO hasn't ruled out making a play for Take-Two. "For the last three years, we have been very focused on our company and getting it right in terms of culture and reinvigorating the company," Electronic Arts CEO Andrew Wilson told TheStreet in a recent interview when asked about revisiting Take-Two. Wilson, who was at Electronic Arts when it went hostile for Take-Two, added, "We are now at a place where we think we are in a really good position, and so we are open to acquisitions for the first time I would say in the last few years." Zelnick didn't completely kill the notion of sitting down with Electronic Arts, either. "We like being independent, and equally we are here for the shareholders -- I think we are really proud of the track record of building value for our shareholders, the stock just hit an all-time high,' said Zelnick. In the meantime, Take-Two will look to ca[...]
Thu, 23 Jun 2016 14:31 GMT
Bed Bath & Beyond shares are up over 2% Thursday despite the company missing on earnings per share and revenue expectations. Guidance was unimpressive and inventories were a little high, too, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment. Comp-store sales results came in light while gross margins contracted. This was followed by a "not great conference call," Cramer added. Cramer is not impressed. What the company needs, he said, is "someone young" who knows what customers want and can make a big push online. Yes, management did discuss the company's recent acquisition of online retailer One Kings Lane, but didn't call it a savior, Cramer said. Bed Bath & Beyond is full of terrific merchants who know retail but they are just not getting it done anymore. Why? Because Bed Bath & Beyond, like Macy's and other traditional retailers, continues to feel the pinch from online retailers starting Amazon . Unlike Macy's, however, Bed Bath doesn't have the type of dividend to keep investors interested, yielding just 1.15% to Macy's 4.5%. Instead, the company has been buying back a ton of stock, which now appears to be an obvious mistake, Cramer explained. The stock has dropped almost 40% on the year and is down 17% over the past five years.Click to view a price quote on BBBY. Click to research the Retail industry.
Thu, 23 Jun 2016 00:18 GMTSearch Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. There are way too many companies out there, Jim Cramer told his Mad Money viewers Wednesday. But while the market is ripe for consolidation, we just aren't seeing the takeovers and acquisitions we so desperately need. "We've got too many of everything," Cramer said. There are too many stores, too many airlines, too many banks and too many restaurants. But with the government stifling many proposed mergers, including Halliburton and Baker Hughes , Pfizer and Allergan and many more, companies are now reluctant to merge, even if it would make a lot of sense. Our country simply doesn't need all of the retail stores we have, he said. Despite a few bankruptcies, there isn't any capacity being taken out of the equation. Even in biotech and regular tech, two sectors with beaten-down stocks that are ripe for mergers, the deals just aren't getting done. The only deals that is getting done is Tesla buying Solar City . Cramer said if investors like Tesla they should buy the car, not the stock. Executive Decision: Lew Cirne For his "Executive Decision" segment, Cramer sat down with Lew Cirne, founder and CEO of New Relic , the cloud-based data analytics provider that is up almost 50% from its February lows. Cirne said companies are increasingly becoming digital. When you have large software deployments, you need New Relic to monitor that software and let you know how to improve it. New Relic's platform allows any company to measure and improve their software. In fact, when the healthcare.gov website first opened with disastrous results, it was New Relic's software that determined where the site was failing, and why. New Relic also helps companies like General Electric with its software and digital initiatives. Cirne said that for ecommerce providers, New Relic provides dashboards that not only show at a glance if their shopping cart is working, but also how fast it is and how happy customers are using it. By learning more about customers, retailers can focus on keeping them happy. Cramer admitted that he hadn't heard of New Relic until about a year ago, but said the company is doing a terrific job. Ignore the 'Brexit' Hysteria Even if Britain votes to leave the European Union Thursday the impact won't be that terrifying, Cramer told viewers, as he once again urged everyone to step back from the "Brexit" hysteria. Cramer said despite articles claiming tomorrow's vote will be the most significant event in British history over the past 500 years, the reality is that the UK only already an a la carte member of the EU. Britain has its own currency and can opt out of practically any EU regulation it chooses. In fact, the European Union has less control over Britain that any other state. So even if the vote is to leave, it won't be momentous nor historic, especially for most American companies that don't even sell things in Europe. Executive Decision: James Park In his second "Executive Decision" segment, Cramer sat down with James Park, chairman and CEO of Fitbit , the wearable device maker that's seen its shares plunge from highs near $51 in August to just over $12 today, despite posting 50% revenue growth in its most recent quarter. Park said Fitbit is only nine years old and still has a lot o[...]
Wed, 22 Jun 2016 22:19 GMTDespite Lululemon Athletica experiencing several years of slowing growth amid increased competition from Nike and Under Armour in the female athleticwear space, execs still oddly hold a pretty high opinion on its future. During an investor presentation Wednesday, Lululemon CFO Stuart Haselden said the company plans to double its sales -- and more than than double its earnings -- by the year 2020. That would roughly bring Lululemon to revenue and net profit of $4.6 billion and $600 million, respectively, using results from last year as starting points. What's more, the company anticipates doubling sales of its women's and men's businesses over that time-frame to about $3 billion and $1 billion, respectively. What's driving Lululemon's uber-bullishness other than typical executive hubris? Well, the company is keen on the benefits of an improved pipeline of innovative products, opening more stores in key U.S. and overseas markets, expanding the size of existing stores and partaking fully in the digital shopping age. Unfortunately for Lululemon, it may be hard for investors to buy into such an over-the-top outlook due to multiple factors. First, the trend has not been a friend to Lululemon. The company's gross and operating profit margin have declined for four consecutive years as its once enviable market share has been encroached on by larger apparel competitors and smaller upstarts. Further, the company has bore the brunt of internal operating inefficiencies. Same-store sales have risen by mid-single digit percentages in each of the past three years, down from the blistering double-digit percentage gains when it first burst onto the apparel scene in the mid 2000s. In fact, Lululemon barely doubled its revenue in the five years from 2011 to 2015 when it was on fire in the U.S. -- according to Bloomberg data, sales reached $2.03 billion last year compared to $1 billion in 2011. Meanwhile, Lululemon's present-day performance has been tepid. The yoga apparel maker reported first-quarter earnings fell 11.8% from the prior year to 30 cents a share excluding one-time items, missing Wall Street forecasts of 31 cents. Total revenue rose 17% to $495 million, narrowly surpassing estimates of $487 million. Comparable-store sales rose 3%, or 5% excluding the influence of the strong dollar. Total comparable-store sales, which include sales online, increased 6% or 8% when stripping out currency fluctuations. Sales online increased 17% in the first quarter from the prior year to $97.6 million. In the fourth quarter, total comparable-store sales and online sales increased a healthier 11% and 20.8%, respectively. And Lululemon may be experiencing a further slowdown so far in the second quarter. The company forecast second-quarter earnings of 36 cents a share to 38 cents a share, below Wall Street estimates of 39 cents. Total same-store sales, on a constant currency basis, are seen increasing by a mid-single digit percentage, slower than the 8% gain in the first quarter. On a June 8 call with analysts, Haselden acknowledged that traffic to its stores were weak in May and remained soft into the early stages of June. Lululemon went on to leave its full-year guidance unchanged likely as it banks on a bumper holiday season. It sees earnings of $2.05 to $2.15 a share, which was below Wall Street estimates for $2.[...]
Wed, 22 Jun 2016 19:03 GMTIf there's one stock hasn't turned to gold from Warren Buffett's Midas touch, it's Big Blue. Buffett's Berkshire Hathaway first invested in IBM back in 2011 and since then has consistently added to its position. But over the course of three years, from 2013 through 2015, the stock declined by a cumulative 30%. Interestingly, in the first half of 2015, IBM's stock rose only to crash in the second half. IBM is currently sitting pretty on a 12% year-to-date gain. Will history repeat itself, with the stock cratering in the second half of 2016? If you've followed IBM over the years, you would know it has managed to transform itself and stay relevant. By moving away from hardware such as PCs, hard disk drives, and DRAMs and focusing on higher-value, more profitable markets, IBM made a name for itself with higher profit margins and revenue growth. Cut to 2016, when the long-term strategic and financial success of initiatives like analytics and cloud computing has yet to be measured. IBM's strategic imperatives business segment (data analytics, social, mobile, security, and engagement), which makes up 35% of IBM's total reported revenue for 2015, has no doubt shown growth. However, unrelentingly high single-digit to low double-digit declines in some of its portfolio of legacy businesses has led to a degree of concern. Ratings major Moody's believes this will lead to another year of lower revenues in 2016. Profitability and cash flow will be flat to lower in 2016, it says. A major problem for IBM investors is that top-line growth is absent. Since hitting $106.9 billion in 2011, annual sales has dropped every successive year. Analysts project a 3.1% drop yet again in 2016, with revenues at $79.25 billion. Tracking earnings per share (EPS) can be confusing since IBM has spent $155 billion (more than its current market cap) to buy back shares since 2000. IBM is projected to report an earnings per share (EPS) of $13.51 for fiscal 2016, a year-on-year drop. Over the next five years, analysts do not expect any major trajectory change in terms of EPS growth (a 2.65% run-rate in next five years versus 2.5% in the previous period). IBM's ongoing, multi-year industry shift to cloud-based offerings from traditional, on-premises hardware and software solutions is incomplete. Whereas the company generated $17 billion-plus free cash flow in 2009, that number is expected to drop to about $11-to-$12 billion in 2016. While IBM continues to be aggressive with acquisitions, without a huge transaction there will be no major positive outcome, only the additional risk of integration. Our thoughts reflect concerns over IBM's ability to grow revenues and profitability as it "transforms" its broad portfolio. Competition is now emerging from different sectors as IBM is no longer focused on one area. For example, as a cloud infrastructure provider, IBM will face Amazon's AWS. In software, IBM has to rub shoulders with Microsoft, Oracle, and SAP. As a server vendor, IBM battles with HP Enterprise, Dell, Lenovo, and networking giant Cisco. With IBM's stock price already trading above the median estimate of as many as 22 analysts, targets need to be upgraded or the stock needs to decline. We are pretty sure that IBM shares will fall off quite a bit and possibly end 2016 on a sour note. At 10.9 times forward earnings, IBM is no Apple. Cisco and Apple are[...]
Wed, 22 Jun 2016 16:27 GMTFirst-half results for European apparel retailer H&M left investors unimpressed on Wednesday as concerns over margins and same-store performance cluttered the outlook like last season's inventory. Group CFO Jyrki Tervonen emphasized growth in total sales when discussing H&M's six-month performance on a call with analysts, although both gross and operating margins slipped notably and earnings per share plummeted by 21.5% during the period, highlighting the impact that price cuts and rising costs are having upon returns. So-called selling, general and administrative costs drove operating profit lower. But Tervonen insisted: "The increase in SG&A is mainly related to the expansion and long term investments in IT and online." H&M's operating margin fell to 11.3% in the first half from 15.1% a year earlier and its gross margin dropped to 54.9% from 57.4%. Despite the poor first-half performance, the figures announced today were in line with expectations since analysts had already cut estimates after last week's sales preview, and the reaction by the market was muted. The shares first rose, then fell and closed up 1.2% at Skr253.60. The stock has fallen by about 26% in the year to date. Despite uncertainty over the outlook for same-store sales and concerns over margins, H&M stuck to a store expansion target of opening 10% to 15% outlets a year. H&M stopped reporting same-store numbers to investors in 2014, putting the move down to expansion and its efforts to build its online channel. But Credit Suisse analysts estimated a 5.3% second-quarter same-store sales decline. When questioned today about same-store sales growth and the effects of price competition upon the business, Tervonen wouldn't be drawn on the former and declined to provide guidance for the latter. However, he did say that he expects the market to remain very competitive and that H&M's desire to provide a "best value offering" would involve, among other things, adjusting prices both up and downward in the future. Given the aggressive and ongoing price competition coming in from Inditex's Zara and H&M's admission that it will follow the market wherever it leads, investors may need to brace themselves for price cuts. Credit Suisse reiterated its neutral rating for the stock today, with a price target of Skr275.0, which implies upside of 10% from today's level. However, Berenberg analysts reiterated their sell rating for the shares last week ahead of today's release and maintained their price target of Skr222.0, which implies downside of almost 10% from current levels. Click to view a price quote on HNNMY. [...]
Wed, 22 Jun 2016 14:58 GMTMy firm, SpringOwl Asset Management, shorted Tesla stock Wednesday morning after Tuesday night's news that the company made an offer to purchase SolarCity for $2.8 billion. We see no obvious synergies between SolarCity and Tesla. One sells solar panels to retail customers. One sells electric cars. Elon Musk appears to be motivated to use Tesla's stock as a currency to absorb SolarCity as he has $475 million in loans securitized by Tesla and SolarCity stock, as detailed by The Wall Street Journal in April. Tesla has previously warned investors that if its stock price declined, Musk could be forced to sell more of his stock in Tesla to raise money in a margin call to cover his personal loans. Musk owns just under 22% of SolarCity's stock, which is down 63% in the last year. SolarCity's stock has been a popular short by many hedge fund managers. As of Tuesday, 49% of SolarCity's float was held short. It's not clear if SolarCity's stock price was headed for more declines in the months ahead, but with this proposed acquisition Tesla effectively puts a collar on the value of Musk's SolarCity shares. We don't think an acquisition, which appears to be more motivated by self-interest over corporate goals that serve Tesla, is appropriate corporate governance. If the Tesla board believes this acquisition serves their interests, why didn't they choose to buy SolarCity years ago before its initial public offering, when its valuation was much cheaper? We can't imagine that the many Tesla shareholders who bought into the $2 billion secondary offering a few weeks ago would be happy to know that most of that money raised will be going towards absorbing SolarCity. After Musk, the biggest holder of Tesla (11%) and SolarCity (15%) is Fidelity. According to the after-hours reaction Tuesday in both companies' share prices, Fidelity's stake in SolarCity increased in value by $47 million, but its stake in Tesla dropped in value by $440 million. Fidelity's collective investment in the two companies is down $400 million. Its interests have not been served by this deal. The Wall Street Journal article from April also detailed how SpaceX was the largest purchaser of SolarCity's solar bond offering in March. SpaceX bought $90 million of the $105 million offering. SpaceX has also been a popular buyer of these SolarCity bonds in the past. We don't think it's appropriate for different business entities, whose only connection is their founder, to be able to raise money from outside investors and then invest that money -- presumably raised to help fund the operations of that business -- in another business of the founder. If we are going to give Donald Trump a hard time for using campaign money to pay entities affiliated with him, we need to do the same with a beloved tech visionary. At SpringOwl, we criticized out-of-touch CEOs like Marissa Mayer of Yahoo! for needlessly spending company money on holiday parties, exorbitant employee retention packages, free organic food and needless expensive acquisitions. That company is now on the verge of being sold six months later. We took Philippe Dauman of Viacom to task for raking in $71 million in total compensation last year when his stock price has dropped nearly 50% in value over two years. We demonstrated how Dauman had hollowed ou[...]
Wed, 22 Jun 2016 13:18 GMTGold has been on a rollercoaster in recent trading sessions but brokers at Goldman Sachs are recommending investors hang on for the ride and grab a ticket for the thrills by investing in Polymetal International . "We expect Polymetal to remain one of the few global precious metal minders delivering meaningful volume growth with one of the lowest cash costs globally thanks to macro tailwinds and management focus on cost cutting," the broker noted this week as it upgraded its 12-month price forecast to 950 pence ($13.94), from 870 pence. Polymetal shares traded Wednesday at 860 pence, with a little more than 10% to go before it hits the Goldman Sachs target. Underpinning Polymetal's prospects are a pair of deals that appear well timed to benefit increases in the price of gold. The Kapan mine in Armenia and the Komarovskoye gold deposit in Kazakhstan, were secured in March and early April, suggesting negotiations took place just as gold was recovering from its turn-of-the-year lows of below $1,060 an ounce. Those acquisitions, coupled with the ramping up of its Kyzyl gold project in Kazakhstan will likely boost production by about 40% of the coming five years, or a compound average growth rate (CAGR) of about 6.9% until the end of 2020, Goldman predicts. That is almost twice the growth of Fresnillo , which ranks second for growth among the big gold producers with a CAGR of 3.5%, while AngloGold is expected to add just 1.4% a year to output and Gold Fields is expected to shrink 2.2% a year, according to Goldman Sachs. Better still Polymetal is not growing at the expense of cost discipline. Its cash cost for an ounce of gold is expected to come in below $573 this year. That is down 10% since 2014, and should fall to $551 in 2017, according to Goldman's note. By comparison, Gold Fields and AngloGold both spend more than $600 for each ounce they produce. All of that might suggest that Polymetal would trade at a premium to its rivals, yet the opposite is true. Shares are priced at about 12 times forecast 2017 earnings. Rival large gold miners trade at a median closer to 30 times 2017 earnings forecasts, though that figure is inflated by Fresnillo's valuation of about 45 times earnings. "We believe that such a discount for Polymetal vs. peers is unjustified given its superior growth potential and low cost of existing operations as well as assets under development," noted Goldman Sachs. Of course any investment in Polymetal is also a bet on the gold price, and that has been a white-knuckle ride in recent days. Gold traded Wednesday at about $1,268 an ounce, after slumping on June 20 and 21 from just over $1,298 as fears of a British exit from the European Union receded. Gold price volatility is all but assured until the results of that vote, which takes place on tomorrow, are released in the early hours of Friday. Yet Goldman said it is confident that support for gold is set to continue in the short term, driven by delays to a Federal Reserve rate hike, loose central bank monetary policy, devaluation of the Chinese currency and a flight to safety as the U.S. election nears. Click to view a price quote on POYYF. [...]
Wed, 22 Jun 2016 13:15 GMT
What's the worst-case scenario if Britain votes to leave the European Union Thursday? A 15%-plus slump in the pound against the dollar, said Jasper Lawler, a market strategist with CMC Markets in London.. "We've had some fairly absurd theories thrown around in terms of the volatility a 'Brexit' could generate," he said, most notably, George Soros predicting that over 15% drop in the pound. "That is the worst-case scenario," Lawler said. This is the type of decline seen in 1992 when Britain exited the European Exchange Rate Mechanism. "That event was a complete shock. No one expected it coming," he said. "I think it would be very surprising should we see a move like that because we've known about [the Brexit possibility] for months and markets should be prepared for this." On Wednesday, the pound rose 0.16% against the dollar to $1.468. "There's an assumption still in [London] and I think that's being reflected in the British pound and the FTSE 100 that we're going to remain and that's why they're at their highest levels of the year," Lawler said. On Tuesday, Federal Reserve Chair Janet Yellen said a Brexit "could have significant economic repercussions," during her testimony before congressinal lawmakers, which continues on Wednesday. Lawler said one silver lining of a Brexit vote would be a delayed rate hike from the Fed, as record low interest rates have buoyed stocks in recent years. "At the moment, September is a bit of a consensus in markets [for the next hike] and I think that would be pushed back to the end of the year or the start of 2017" following a Brexit, Lawler said. He added the Bank of England may also add stimulus measures and "again, it would be central banks to the rescue."