Game Plan For The Week – Cramer's Mad Money (4/13/18)

Stocks discussed on the in-depth session of Jim Cramer’s Mad Money TV Program, Friday, April 13.

“President Trump is creating a level of uncertainty that breeds selling on any rally, as we know there could be big news flow on Saturday and Sunday,” said Cramer. Despite strong earnings reports from banks, the market was jittery on Friday due to Washington. The uncertainties of Trump firing Robert Mueller, attack on Syria or trade tensions with China still grip the market. With that, Cramer discussed the game plan for the week.


Earnings: Bank of America (NYSE:BAC) and Netflix (NASDAQ:NFLX).

BAC is the biggest beneficiary of interest rate hikes owing to its big deposit base. Cramer expects good earnings from them. Netflix, on the other hand, is expected to report a blowout quarter. “The now-worldwide entertainment company has so many supporters on Wall Street that you’d think it would stop going higher after every reiteration or number bump. But the same thing happened last time around with Netflix and the stock still flew when we saw the quarter,” added Cramer.


Earnings: UnitedHealth Group (NYSE:UNH), Goldman Sachs (NYSE:GS), IBM (NYSE:IBM) and Johnson & Johnson (NYSE:JNJ).

Cramer regards UNH as a company with multiyear trajectory and a consistent track record. “If you can get it in the teens, where my charitable trust did recently, I think that’s a terrific price,” he added.

The bank stocks cooling off before Goldman Sachs’ report is a good sign. The company’s stock does well in times of volatility. IBM, on the other hand, enjoys one of the top spots in cloud plays. “I think IBM is cheap and if it’s in the $150s before the quarter, buy some,” said Cramer.

JNJ has been a consistent performer and is one of the steadiest drug companies in the group.


Earnings: Morgan Stanley (NYSE:MS), United Rentals (NYSE:URI), Alcoa (NYSE:AA) and American Express (NYSE:AXP).

Cramer expects strong numbers from MS due to strong brokerage earnings. Buy the stock if it pulls back ahead of earnings. Equipment rental company URI is a great domestic play and the stock is a buy to keep away from US-China trade war.

Watch aluminum producer Alcoa’s earnings closely to gauge the effects of Trump’s tariffs on aluminum imports. “Be ready for the president to crow about this win. We might hear rhetoric about how trade barriers and duties are working better than anyone thought. Of course, that’s not something that any of the international companies who need access to China will want to hear,” said Cramer.

American Express is a good financials company.


Earnings: PPG Industries (NYSE:PPG) and E-Trade Financial (NASDAQ:ETFC).

The report from PPG will give details on the chemical cost inflation. On the other hand, ETFC has been the best performing financial stock. “Have individual investors gotten more bullish about individual stocks? Let’s find out,” said Cramer.


Earnings: Honeywell (NYSE:HON), General Electric (NYSE:GE), Procter & Gamble (NYSE:PG) and Schlumberger (NYSE:SLB).

Cramer expects good numbers from Honeywell and will be watching for details of the breakup. Schlumberger is the best of breed in oil-service companies. The stock has not benefited much from the bounce in oil prices. “I’m betting this will be the quarter where we get a good service forecast,” added Cramer.

Investors will be closely watching struggling industrial conglomerate GE. “We also want to hear about long-term care costs being under control and unfunded pension plans benefiting from a higher short-interest-rate environment,” said Cramer.

PG has been crushed lately but the consumer packaged goods stocks have growth left which should be confirmed in their earnings report

Though this will be a busy week for earnings, the Washington-related headwinds will be too much even for the best of breeds.

MiMedx Group (NASDAQ:MDXG)

MiMedx is a small-cap biotech that manufactures regenerative biomaterials products and tissue processing services for the wound care, surgical, sports medicine, ophthalmic and dental market categories.

The company is surrounded by a controversy that it inflates its sales numbers and lies to shareholders. Though the company denies any wrongdoing, the stock has moved from $15 to $6. Both the SEC and the Justice Department are investigating and the stock has become a battleground for investors as short-sellers have piled on.

“I don’t want to take a position on which side is right, but one thing is undeniable. Stay away from battleground stocks,” said Cramer. “As long as a company like MiMedx is caught between the short-sellers and a federal investigation, to me, I think it’s not worth the risk. I don’t want to tell you what to do, though. You can make your own determination. But if it were me, I wouldn’t be able to sleep at night taking either side of this particular trade,” he concluded.

Cybersecurity stocks

With high-profile cyber-attacks, cybersecurity remains a hot theme on Wall Street. While the big player names like Palo Alto Networks (NYSE:PANW), Fortinet (NASDAQ:FTNT) and Proofpoint (NASDAQ:PFPT) are obvious picks, Cramer reviewed three under-the-radar stocks that have potential – ForeScout Technologies (NASDAQ:FSCT), Okta (NASDAQ:OKTA) and Zscaler (NASDAQ:ZS).

ForeScout is focused on helping government agencies and businesses implement security measures for growing online networks. The stock debuted in October 2017 and has moved from $22 to $33. The company boasts contracts to Department of Defense to secure data and improve the Pentagon’s response time during cyberattacks. “If you want to buy this one, please, please, please wait for the lockup expiration to give you a better entry point,” said Cramer.

Okta focuses on the identity management and authentication play. This company is an expert in multi-factor authentication, or building multiple steps to a login to prevent breaches. More than 81% of hacks involve stolen or weak credentials and that’s where Okta comes into play. “I like this story. My only hesitation here is Okta’s recent run, but when you consider that this move has happened in the face of some major selling by the company’s venture capital backers, I think it’s absolutely worth putting on your shopping list so you can buy some into the next major marketwide pullback,” said Cramer.

Zscaler is a cloud security provider and this recent IPO has been in the limelight. “Cybersecurity for the cloud that’s infinitely scalable; no wonder there was so much excitement,” said Cramer. The company has won major government authorizations and there are rumors of Cisco being interested in the company. The stock is expensive compared to other two.

Micron Technologies (NASDAQ:MU)

A low PE multiple does not always mean that the stock is too cheap. At times, the earnings estimates could be exceptionally high. That seems to be the case with Micron, which many feel is a bargain at a PE of 5.

Cramer recalled a steel company called Bethlehem Steel in the 1980s and it used to trade at 2 times earnings. It was one of the largest steel producers and considered a bargain. By the ’90s the company was losing money and ceased to exist a decade later.

The case with Micron seems to be similar as the company’s DRAM business seems solid, but the flash memory business is vulnerable. The flash memory business will cause the estimates to fall and suddenly the company’s PE could jump to 10. Be on guard as Micron’s low PE could be a red flag and not an opportunity.

Viewer calls taken by Cramer

Universal Display (NASDAQ:OLED): No. Don’t own this stock since this could be good for Apple (NASDAQ:AAPL). Buy Apple instead.

Knight-Swift Transportation (NYSE:KNX): Cramer said XPO Logistics (NYSEMKT:XPO) is a better buy for a play on e-commerce.

Global Payments (NYSE:GPN): It’s a sensational stock. Cramer has been recommending it for some time.


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