Game Plan For The Week – Cramer's Mad Money (4/28/17)
Stocks discussed on the in-depth session of Jim Cramer’s Mad Money TV Program, Friday, April 28.
The federal government is funded through the week and Cramer felt a sigh of relief even if there was a pullback on Friday on a weaker than expected GDP number. With that he discussed his game plan for the week.
Cramer is unsure what to expect from AMD after Intel (NASDAQ:INTC) slid 3% on decent earnings. “As I have repeatedly said, there is nothing wrong with the company AMD. What can I say? The market’s fallen out of love with last year’s darlings,” he added.
He will be watching Cardinal Health to note the acquisition impact of Medtronic’s (NYSE:MDT) business.
CVS Health’s stock has been under pressure. However, it’s hard to dislike a well run company selling at 13 times earnings. Cramer said the stock is a buy if it goes down on earnings. He expects good numbers from MasterCard as competitors have reported good numbers too. If the stock is hit after earnings, buy it.
Apple reports after the close on Tuesday. “Apple’s doing so many things right. It’s making the best products, developing a deep ecosystem with a substantial service revenue stream. The upcoming iPhone release is rumored to have an array of new features that makes the smartphone more functional and easier to handle, which should boost sales and new customer numbers,” said Cramer. The company also stands to benefit from repatriation if it is implemented by the administration. “Own the stock, don’t trade it,” he added.
Cramer likes Sprint’s stock but thinks they might be pushing along and not growing. T-Mobile (NASDAQ:TMUS) CEO John Legere said he’d be open to buying the company but there may be anti-trust issues. “Any merger would lessen the competition for something that’s become a modern day necessity. You really have to own these for fundamentals, not potential deals, and if that’s the case, T-Mobile remains best of breed,” added Cramer.
Facebook reports after the close and Cramer expects good numbers from them. “I like how competitive Facebook is. If you don’t own it now, I think you might as well wait to see if we get that kind of weird sell-off that we usually get even after it reports a great number.”
Investors will be watching Kraft Heinz’s earnings as the company is looking for an acquisition. “We know, though, it takes two to tango, and I’m hard pressed to see who would possibly want to sell in that consumer packaged goods industry as the remaining players seem to have no inclination to let go of the reins,” said Cramer.
Dunkin’ has become a better investment compared to Starbucks as it went from $46-55. The company is executing well and has outperformed considering the US slowdown.
Activision Blizzard is a secular growth trend story. “I say the trend’s your friend. This franchise is worth buying if it gets hit,” said Cramer.
Non-farm payrolls number will be out on Friday. “If April turns out to have been a robust hiring month, and I think it will be, that gives the Fed breathing room to raise interest rates twice, and therefore the bank stocks will soar,” said Cramer.
CEO interview – Western Digital (NYSE:WDC)
The stock of Western Digital has doubled from last year’s low and they just reported monster earnings. Cramer interviewed CEO Steve Milligan to hear more about the quarter.
Milligan said that WDC is leveraged so that when things are good, they do really well. On the other hand, they are able to manage volatility better. Their products serve a diverse set of consumers and enterprises.
Cramer questioned Milligan on WDC’s joint venture with Toshiba. “The joint venture that we’ve had with Toshiba is 17 years running. I would contend that it’s probably one of the most successful technology joint ventures in the history of our industry. And so our first goal is let’s keep that joint venture healthy,” said Milligan. Although their main focus is growing their business, helping Toshiba could create an overhang.
“Rest assured, we’re going to do our very best to make sure that we protect our interests and advance not only our position, but the stakeholders that Toshiba has, and really come to a resolution that helps us to continue to be successful going forward,” he added. The company remains committed to their dividend and to deleveraging their balance sheet whenever possible.
CEO interview – AGCO (NYSE:AGCO)
AGCO reported a narrower than expected loss on Friday. Cramer interviewed president and CEO Martin Richenhagen to find out more about the quarter and his views on how Trump’s protectionist stance might affect the agricultural landscape.
Richenhagen said that sales are picking up in the US, Europe and South America. Brazil and Argentina look better than last year but France remains skeptical due to the political situation. He added that the company continues to innovate and they are introducing smaller tractors with modern designs.
When asked about Trump’s protectionist stance on steel, he said, “Placing high tariffs on non-US steel will have industry-wide implications. “For us, of course, if steel’s prices would go up because of this kind of protectionism, it wouldn’t be so good because finally our customers would have to pay. So that’s true for all of us, for the whole industry. The move would benefit the steel industry but is not really a great strategy to implement tariffs without explicitly informing consumers of their effects. All kind of protectionism finally has to be paid for,” he said.
CEO interview – BioMarin Pharmaceuticals (NASDAQ:BMRN)
The stock of BioMarin is up 15% to date. Cramer interviewed chairman and CEO JJ Bienaime to hear about the $486,000 drug Brineura.
Cramer questioned Bienaime about the sky-high price of Brineura. “Obviously, the system will have to determine that. But I would say that CLN2, the disease that Brineura is being used for, is an absolutely devastating neurodegenerative disorder for which, unfortunately, the patients will lose their life, most of the time by age 12,” said Bienaime.
CLN2 is also known as Batten disease, that affects 1,200-1,500 patients worldwide with 20 new patients in the US. The disease starts with unexplained seizures and by age 7-8 most lose their ability to walk, talk and see. Most affected patients are on federally funded programs like Medicaid which brings down the drug’s price to $486,000.
“The cost of manufacturing Brineura per year is north of $100,000 per year per patient. The efforts are underway at BioMarin to offer free genetic tests for young patients with unexplained seizures,” said Bienaime. “Nine out of 10 drugs that get into clinical development, that means being tried in humans, never make it to the market, so the failure rate is extremely high,” he added. This drives up operational costs and that reflects in the drug pricing.
“I think, hopefully, if there is any kind of regulations coming around health care, that they will make sure that those regulations protect innovation and protect innovative biotech companies. And biotechnology is one of the only industries left where the U.S. is a leader in the world and we hope it will stay that way,” concluded Bienaime.
Viewer calls taken by Cramer
Costco (NASDAQ:COST): They have all issues under control. Buy half now and half at lower price.
Get Cramer’s Picks by email – it’s free and takes only a few seconds to sign up.
For more Cramer, visit here: Cramer’s Picks