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Thứ Sáu, 19 tháng 7, 2013

Cramer's Mad Money - SAP And The Cyclical Bump (7/18/13) - Seeking Alpha

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Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday July 18.

CEO Interview: Bill McDermott, SAP AG (SAP)

SAP (SAP) reported a number some analysts found disappointing. CEO Bill McDermott admitted that his enterprise software company had a slow quarter. The problems seem to be industrywide, since competitors also gave lackluster results. McDermott stressed that these issues are temporary, and were mainly due to China. "Asia Pacific should never be in negative territory and it was down 7% this quarter. That is unacceptable." However, McDermott added that orders have been delayed, not taken off the table. SAP has seen double digit growth and significant upside in Southern Europe; Germany was up 9%. What has been going on recently is just a "cyclical bump," and McDermott emphasized the growth in operating profits and success with cloud.

Boeing (BA), 3M (MMM), Johnson & Johnson (JNJ), Google (GOOG), Microsoft (MSFT), eBay (EBAY), Intel (INTC), Blackstone (BX), Textron (TXT), Phillips 66 (PSX), Valero (VLO)

Mixed data is good for a bull market, because if the news is too good, people fear the Fed will cease its assistance, and if the news is negative, stocks get hit. The Dow rose 78 points, and Cramer discussed the biggest contributors to the Dow's move upward so far this year. Boeing (BA) has contributed 241 points to the Dow's rise, 3M (MMM), 172 points and Johnson & Johnson (JNJ), 156 points. Cramer thinks it is a good sign that industrials like BA and MMM are rising alongside a defensive stock like JNJ; that shows that the bull market is widespread and not just centered in a few sectors. Transports are up even though fuel prices are high. There were some disappointments, including weak news from Google (GOOG), Microsoft (MSFT), which has "gotten ahead of itself," eBay (EBAY), which Cramer thinks has bottomed and Intel (INTC). This negative news might cast a pall on the market on Friday morning, but the gloom might not last long.

Cramer took some calls:

Blackstone (BX) is one of Cramer's favorite specs, and he thinks it is still cheap.

Textron's (TXT) management is "not doing the right thing." Cramer doesn't think the company will split itself up. He would not buy it.

Phillips 66 (PSX) is not a buy, but Valero (VLO) is because Cramer thinks it has bottomed and will reverse itself.

CEO Interview: Mike Sutherlin, Joy Global (JOY)

Joy Global (JOY) is down 20% for the year because of the slowdown in China and the decline in coal use. Goldman Sachs downgraded Joy Global, but Cramer thinks the stock could do well in the second half of the year. At this point, the stock is so cheap that any improvement will send the stock higher. Cramer asked CEO Mike Sutherlin about the divergence between the company's positive performance and its low stock price. Sutherlin says that JOY's business model is widely misunderstood; 60% of its revenues are from the after market segment that focuses on service for equipment. Joy engages in outsourcing to cut down on volatility. Asia might see a muted increase in demand for commodities; this will not be aggressive demand, but may be higher than in the U.S. The decline in capital expenditures by clients hurt Joy Global, but Sutherlin thinks most of the cutbacks have already been made. While environmental regulations are a challenge, Sutherlin noted coal use has increased over the past year. "My charitable trust wouldn't own Joy Global if it weren't cheap."

CEO Interview: Bob Dudley, BP (BP)

Three years after the disaster in the Gulf of Mexico, BP (BP) is performing well and is among the cheapest oil companies. While BP is still being hit with litigation, some of these claims are under investigation to examine whether they are legitimate. While CEO Bob Dudley says he is proud that BP stepped up to the plate to take responsibility for the spill, some claims are becoming more extravagant and are "absurd," according to Dudley. In spite of the litigation, the company is committed to buying back shares aggressively. The company beat earnings estimates by 22 cents, is trading at a multiple of 7.4 and yields 4.9%. Currently BP is quite active in Russia; it owns 20% of the largest Russian oil producer. BP is the largest investor in U.S. energy. When asked about high gas prices. Dudley replied that historically, U.S. gasoline prices are correlated with the global price of crude. Cramer thinks BP is a cheap stock.


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