Day: June 16, 2017

The Love For Tech Stocks – Cramer's Mad Money (6/15/17)

Finances

The Love For Tech Stocks – Cramer's Mad Money (6/15/17)

Stocks discussed on the in-depth session of Jim Cramer’s Mad Money TV Program, Thursday, June 15.

While money was flowing out of tech stocks on Thursday, Cramer made the case to buy the tech stocks. “It might be worth remembering why we used to like tech in the first place, and why, despite what you see and hear, maybe you shouldn’t give up on it so easily. Despite the fact that so many people are worried about the valuations of technology stocks, you need to take a look at what else is out there to see why, maybe, tech’s a little more special than you think,” said Cramer.

The reason that tech stocks are good is due to solid earnings organics growth. Consider other leaders like Nike (NYSE:NKE) which went down due to layoffs and competition from Under Armour (NYSE:UA). The sneakers business is now getting crowded.

The market leader Kroger (NYSE:KR) slashed its forecast due to competition. The steel leader Nucor (NYSE:NUE) went down due to weaker than expected guidance. But if one looks at the tech leaders like Alphabet (GOOG, GOOGL), there are not shortfalls. The high growth FANG stocks keep delivering on their earnings.

“Remember that while tech has become a curse word of late, there’s a reason why so many clamor for it and come back to it in the end; earnings, solid, raw, organic earnings, the type you don’t get shortfalls from, the type you get upside surprises from,” concluded Cramer.

Rent-A-Center (NASDAQ:RCII)

The stock of Rent-A-Center is up 50% from its lows. If the move in this troubled stock genuine. Cramer digs deeper to find out. It sells consumer goods like appliances, computers and furniture on a rent-to-own basis, where customers pay off the cost of the merchandise they take home in installments. It was a consistent grower as consumers preferred their installment plans over buying the good outright.

Over the last four years, the stock has fallen 70% from their highs. Is the bounce in the stock sustainable? The company has made lot of changes and has over 3,000 locations in North America. “The company’s founder, Mark Speese, recently returned to his previous role as CEO, there’s an activist firm in there pushing to make changes, and just last week we found out that they’re shaking up the board of directors. Plus, the company’s made some operational changes,” said Cramer.

The company’s numbers had started to decline in 2013 through 2015. Their same-store sales also went down the cliff. Activist Engaged Capital took a stake in the company and urged them to go private to fix issues. Speese was re-instated as CEO. Another activist firm Marcato Capital Management took a stake and they reiterated Engaged Capital’s stance of a board shakeup. Will a sale take place?

The company has announced new strategic changes and did not announce a guidance for 2017. “I think this is way too risky, to buy the stock of a retailer with plummeting same-store sales based on the hope that someone might want to take it private. I can see so much why you’re tempted to speculate here, but for me, Rent-A-Center is way too risky. I say don’t own it, don’t even rent it, there are better fish to fry,” he concluded.

Grocery business

Cramer said that the groceries business has become as bad as retail sector. Kroger declined 19% after slashing their guidance. “We have now officially come to still one more un-investable space in the retail business,” said Cramer.

Kroger is a fantastic company. “But after listening to today’s conference call, one can only conclude that supermarkets are now in one gigantic race to the bottom and no one come out unscathed, perhaps least of all Kroger,” he added.

At their conference call, CFO Michael Schlotman agreed that competition from Wal-Mart (NYSE:WMT) and Amazon (NASDAQ:AMZN) is cut-throat. The margins are getting narrower. The grocery business got highly competitive after players like Costco (NASDAQ:COST), Whole Foods (NASDAQ:WFM), Trader Joe’s and Target (NYSE:TGT) entered the space. The last nail in the coffin was Amazon.

“Now, there’s no way that Kroger is going to cede its turf to everyone. It will compete. It will compete aggressively, which is exactly why, even down here, this stock’s a tough one to own. Right now, though, everyone’s approaching groceries with eyes wide open, and I think, in the end, the only winner is you, the consumer,” said Cramer.

CEO interview – Patterson-UTI Energy (NASDAQ:PTEN)

As the oil prices continue to decline, the stock of Patterson-UTI Energy is off 30% from its highs. Cramer interviewed Chairman Mark Siegel to know his take on the energy sector.

Siegel said that rise in rig counts impact the oil prices but it serves well to oil service companies such as theirs as it means more business. “We’ve had 12 consecutive months of increases in rig count despite oil prices, as you say, being a little bit soft. So the reason is that the people who produce oil in the mid-continent and the Permian Basin, they figured out how to be economic at these kinds of prices. And for us, on-shore, $50 is the new $80,” he added.

Most of their drilling comes from ‘super-spec’ rigs, which are complicated wells that are drilled deep. There are 425 super-spec rigs and 90% of those are being utilized.

“We’re kind of in a Goldilocks position, and the Goldilocks position is between $45 and $55 for oil prices. Quite frankly, it’s not so good for off-shore, it’s not so good for international, but it’s pretty darned good for people who are in the on-shore business in the regions of the mid-continent and the Permian,” said Siegel. He adds that oil remaining in the $45-55 range is fine for them.

Viewer calls taken by Cramer

Ferrari (NYSE:RACE): It’s a great story. Stay long.

MGM Resorts (NYSE:MGM): Don’t buy more until it comes down at $30.

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Michael Kors Is A Loser – Cramer's Lightning Round (6/15/17)

Finances

Michael Kors Is A Loser – Cramer's Lightning Round (6/15/17)

Stocks discussed on the Lightning Round segment of Jim Cramer’s Mad Money Program, Thursday, June 15.

Bullish Calls

Cloudera (NYSE:CLDR): Its last quarter wasn’t that bad, and guidance was conservative. The stock is at 52-week low, and it involves a lot of negativity. Cramer thinks it can be bought.

VMWare (NYSE:VMW): The company had a better quarter than most people think.

Sirius (NASDAQ:SIRI): “Pandora (NYSE:P) is a sell and Sirius is a buy. Sirius, once again, took advantage of its unbelievable balance sheet and management and did that deal with Pandora. I think Sirius is very good at stall. What happens is it goes up, and then it stalls, goes up, then it stalls. That’s where it is right now. I like it.”

XPO Logistics (NYSEMKT:XPO): Cramer likes the company but advised waiting for the stock to cool off, as it has run like a horse.

Bearish Calls

Michael Kors (NYSE:KORS): The company’s last quarter was weak. It’s a loser.

Goodyear Tire & Rubber (NYSE:GT): It’s at a peak. Sell and book profits.

Crestwood Equity Partners (NYSE:CEQP): This yields 11% and could go down another 3-4 points due to pain in the oil patch.

Transocean (NYSE:RIG): There isn’t enough deepwater drilling to merit buying the stock.

3D Systems (NYSE:DDD): “No. I think that’s a crowded space, and I’ve got to tell you, if you really want 3D, I’m going to go with the HP Inc. (NYSE:HPQ) kind. That stock has been weak since they reported that great quarter. I like that opportunity.”

FedEx (NYSE:FDX): “I like the call options, but I, too, am worried. We’re going right into the quarter with a stock that won’t quit. I’d rather have the downside protected.”

Micron Technology (NASDAQ:MU): Cramer would prefer Western Digital (NYSE:WDC), which has upside from Toshiba (OTCPK:TOSBF) left. Cramer’s trust owns the stock.

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Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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The TV shows and novels that will help you understand the weirdness of European politics right now – Quartz

Politics

The TV shows and novels that will help you understand the weirdness of European politics right now – Quartz

Reality, in the world of European politics, truly is stranger than fiction.

With the divisive Brexit referendum and the surprise results to the recent snap election, the UK has lately been battered by political change. In Finland, a three-party governing coalition recently collapsed over differences on immigration policy. The Netherlands has been struggling to form a government since national elections three months ago. Spain narrowly avoided a third general election in October and accepted a minority government, after ten months of wrangling. Greece is governed by an uneasy coalition of the far left and the far right.

To help make sense of “these days of a crisis of confidence in the idea of Europe,” the European Parliament has a helpful list of 100 books on Europe to Remember, filled with worthy political works and no-doubt-inspiring academic texts.

But these books are not exactly beach reads. So if recent events have left you wondering, what the hell is the UK doing? Why is European politics so confusing? Or, where’s the West Wing-style series to explain it all? Look no further:

Borgen

Start with this Danish political series, which depicts a principled woman prime minister trying to lead the country while heading an uneasy coalition government. We’re not making direct parallels with Theresa May here, but as the UK comes to terms with its minority Conservative Party government—propped up by a loose agreement with the ultra-conservative Northern Irish Democratic Unionist Party—Borgen is apt because it examines coalition politics, which are the natural state of affairs in much of Europe.

Germany, for example, is governed by a so-called “grand coalition,” whereby the two largest parties from opposing sides of the political spectrum join together to form a government. Denmark, where Borgen takes place, is a small country with a homogenous population that’s highly engaged with the practice of democracy, and where coalitions are a normal state of affairs.

The Thick Of It, Season 4

Hilarious, awkward, relentlessly harsh, and a masterpiece of profanity, The Thick of It turns the British political establishment inside out, laying bare the spin, the infighting, and the weary childish rivalries at its heart.

The series is the predecessor to the US sitcom about American politics Veep, and both were created by writer Armando Ianucci. But, as with the British and American versions of The Office, the UK series is less riotous and more bleak. There is no redemption for the terrible civil servants, vicious PR people, and hopeless politicians, who blunder through the attempt to govern—in Season 4, during a coalition—through unmitigated chaos.

The Pickwick Papers by Charles Dickens

Steven Fielding, a professor of political history at the University of Nottingham, says there is a long tradition of extreme cynicism in British portrayals of politics in fiction. The Pickwick Papers—which is by no means all about politicsis a joy to read anyway, but especially so as a reflection on today’s UK.

In one section, Dickens’ first novel depicts a by-election in a fictional area called Eatanswill. “You could just change the characters a little bit, and it’s an episode of The Thick Of It,” Fielding says. “Because it’s hopeless. There is no hope.”

The election segment involves two candidates who are essentially the same. It’s all about power, the candidates are being spun remorselessly, and both the politicians and their agents have a disdain for the electorate. Their attitude has some justification: The people themselves are easily bought off.

Wolf Hall by Hilary Mantel

To dip even further back in time, the 2009 Booker Prize-winner by Hilary Mantel is both a great education about British history—the court of King Henry VIII—and a political thriller.

Main character Thomas Cromwell is a court advisor, privy to the secrets of queens and cardinals, and Westminster is already a seat of power. It will help you understand why Europeans seem so obsessed with the distant past (because it’s fascinating). Mantel is also giving this year’s annual series of Reith Lectures, in which she unpicks the relationship between history and fiction.

House of Cards (1990 UK version)

The US version of the TV show House of Cards features Kevin Spacey as a machiavellian congressman who aspires to the top job. Its UK predecessor from 1990 is equally brilliant, and very different.

The main character is the governmental chief whip, a role that exists to keep a political party in line and stop its members rebelling and voting against the leader’s wishes. It’s another example of extreme political cynicism that gives some more insight into the sometimes ugly world of negotiations and compromises that happen behind closed doors in politics.

Spin

If all that gets you too far into the weeds of the UK’s self-identity, it’s time to watch Spin, a glossy French political drama. The original French title, Les Hommes de L’ombre, translates as “The Shadow Men,” and refers to the spin doctors behind the public face of government. But the series also has plenty of sex, well-tailored suits, and sumptuous interiors to relieve the sense that European politics is all about bureaucrats in endless meetings discussing fishing quotas.

What about the more upbeat stories? Among all the depictions of European politics in art and culture, Fielding notes, it’s almost impossible to find a positive version of the European Union—which perhaps is telling in itself.

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