Archive for the ‘CVX’ Category

Best Day This Year for S&P 500, Nasdaq; Dow Closes Up 215 Points

Tuesday, October 21st, 2014
Stocks rallied on Wall Street to make it the best day in 2014 for the S&P 500 and the Nasdaq.

Wild Day for Stocks With a Virtually Flat Close; Dow Lower

Thursday, October 16th, 2014
It was a volatile day on Wall Street. After dropping more than 200 points, the blue chips ended the session pretty much where they started -- just a bit lower.

Massive Selloff Across the Board; Dow Jones Down 334 Points

Thursday, October 9th, 2014
Broad selloff on Wall Street Thursday. The Dow Jones Industrial Average dropped 330 points. Renewed concerns about weakness in Europe's economy weighed on stocks.

Oil Prices are Dropping Again, Now Under $88 — Where Is the Bottom to Be Found?

Thursday, October 9th, 2014
Dan Dicker talks with Brittany Umar about the dropping prices of oil.

Cramer’s ‘Mad Money’ Recap: Getting Rich Carefully

Monday, October 6th, 2014

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. (This program originally aired on June 24, 2014.) NEW YORK (TheStreet) -- These are confusing times for the stock market, Jim Cramer told his "Mad Money" audience. There's always somebody telling you to do exactly the opposite of what you should really be doing. Must Read: Warren Buffett's Top 10 Dividend Stocks But Cramer said it's not about sounding smart, it's about getting it right -- what to buy, what to sell, what direction the market's headed. "You get those things right, and it's a heck of a lot easier to make money in this or any market," Cramer said. By doing your homework, "you just might learn something that will make you a better investor," he said, and a better investor is one who makes more money, "because that's the goal here." Cramer said he and Stephanie Link, the research director of Cramer's charitable portfolio, Action Alerts PLUS, recently went back over every trade AAP made over the last five years. Here's what Cramer has learned. Caterpillar had been going down for weeks on end as analysts raced to cut their estimates ahead of what looked to be a particularly bad quarter, Cramer said. The analysts had turned bearish after CAT's business globally took huge hits because customers were struggling to get credit for new machines. This was at the depth of the Great Recession. When Caterpillar finally reported, the quarter turned out to be even uglier than the analysts had predicted. But CAT's stock barely reacted to the bad news. "That's a classic sign that you're looking at a bottom," Cramer said. "The worst is over!" CAT roared and then rose. It may seem counter-intuitive to buy a stock right after the estimates have been slashed, but when you think about it, it actually makes a lot of sense. JPMorgan Chase is another example of this, Cramer said. It seemed done for after its "London Whale" trading fiasco of 2012. However, just like Caterpillar in March of 2009, JPMorgan's stock didn't get hit after analysts cut estimates. Instead, it flat-lined and then actually inched up slightly. Once we learned JPMorgan's losses were contained at $6 billion, that was the moment we had to buy, Cramer said. If you did, you rode a huge rally. Coming Back for Secondaries Everybody makes a mistake sometimes, Cramer said. But if you want to become a great investor you don't just need to learn from your mistakes, you need to learn how to recognize what your mistakes actually are and notice what works. Must Read: Here Are 20 Stocks That Could Buck the Odds and Do Well in October "We're full of all sorts of unconscious biases, and that can make it incredibly difficult to learn from experience," Cramer said. Think empirically, he said. After analyzing the last five years' worth of trades as part of his research for Get Rich Carefully, his latest book, Cramer came to another counterintuitive realization: Stop worrying and learn to love secondary stock offerings. Cramer said we're all conditioned to believe that when a company issues new stock it's bad news for shareholders. When a company does a secondary, it tends to weigh on the stock for a time. But these days that totally reasonable fear of secondaries is also a mistake, Cramer said, because interest rates are still low by historical standards. For example, real estate investment trusts have done a huge number of these kinds of secondaries, and those deals have worked fabulously for investors. You can find these deals in all sorts of companies that were hit hard by the housing crash, said Cramer. They're now snapping back, like mortgage insurance companies, a group that had pretty much been left for dead. Cramer mentioned how investors could have made a killing on Radian if they had listened to his buy call in February. Cramer also likes the secondary offerings from master limited partnerships, the oil and gas pipeline players that are always issuing stock to finance their expansion plans to crisscross the country with pipelines. Enterprise Products Partners , Kinder Morgan Energy Partners and MarkWest are the best-of-breed players here, and they've become serial issuers of equity to expand their pipeline networks. These companies can be risky if interest rates are rising, Cramer warned, but if rates are stable you should jump all over their secondaries. The bottom line, Cramer said: Forget the conventional wisdom that says a secondary stock offering always means a company is in trouble. Know When to Fold 'Em Like "The Gambler" of song, Cramer has some suggestions for when you should fold your positions or even run. "When it comes to picking stocks, cash is not always king," he said. In fact, if you buy a stock just because it's sitting on a mountain of cash, you could get crushed. Think about it, Cramer said: What do Cisco , Microsoft , Oracle and Intel all have in common? People were lulled into buying their stocks at very high levels simply because they had so much cash on their books, as if cash per se is always good news. What really matters is how companies put that cash to work. Cash can been wasted on undisciplined buybacks -- when you see a company doing that, you should pass on its stock and walk away, Cramer said. Must Read: 5 Semiconductor Stocks Delivering Big Shareholder Profits Now Contrast this with one of the best performing stocks in the S&P 500 since the generational bottom in 2009, Wyndham Worldwide , run by Steve Holmes, one of the most shareholder-friendly CEOs out there today. Holmes buys back stock aggressively and when it makes a difference, particularly during those ravaging downturns when most other CEOs seem frozen. Holmes thinks it is his duty to return his company's excess cash to the shareholders via dividends, Cramer said. He's the model of what Intel, Microsoft and Cisco need at the helm. Here's another sign that you should fold. If you own shares in a company that starts blaming its customers for its own poor performance, it's time to walk away. "I learned this the hard way when my charitable trust decided to buy Juniper Networks , the maker of networking and communication equipment, back in 2011," said Cramer. Juniper encountered shortfalls and blamed a lack of Japanese orders in the wake of the tsunami and Fukushimi Daiichi nuclear disaster. But the stock continued to drop. He stuck with Juniper because the company had a ton of cash. Oops. Juniper's blame-the-customer act was a lame alibi, Cramer said. It turns out Cisco was taking market share the whole time and simply kicking Juniper's butt with a better mousetrap. There's a pretty simple moral here: When a company blames the customer, check to see whether the customer isn't actually still buying from a different vendor. Beyond EPS A huge part of this business is figuring out where a given stock is headed, said Cramer. That isn't always easy. Most stocks, most of the time, trade on their earnings-per-share numbers. When the earnings are headed lower, so is the stock; when the earnings go higher, the stock rallies, too. But for some industries, earnings are not the most important metric, said Cramer. If the only thing you're watching is the earnings per share, you could end up getting clobbered or missing some fabulous opportunities. Watch the key metrics for everything you own. For example, Cramer said, when it comes to oil companies, production growth is key. For many tech stocks, it's the average selling price of their products. In these two sectors, those metrics are more important that anything related to beating the earnings estimates. Devon Energy sagged due to production shortfalls, not earnings per share; Chevron rallied with lower earnings and higher production growth. Another mea culpa: Cramer admitted he totally missed the bottom for Micron MU, the semiconductor company that makes memory chips, back at the end of 2012. Micron's stock had been a dog for more than a decade. But then the stock jumped higher. "What did I miss?" Cramer asked. DRAMs, or dynamic random access memory chips, had a nice bump up in their average selling prices during the quarter. DRAM business had been so horrible for so long that many companies in the industry had simply given up, Cramer said. So supply had become constrained. Micron's been off to the races ever since, more than tripling from December 2012 to December 2013. Must Read: Can These 22 New Restaurant Foods and Drinks Feed Investors Too? One last metric to note, said Cramer: when a company is based in the United States but does a lot of business in emerging markets, particularly China. One of the best buys his charitable trust ever made was picking up Yum! Brands , the parent of KFC, Taco Bell and Pizza Hut, off a sudden decline in Chinese sales because of a KFC tainted-chicken scandal, Cramer said. While Yum! is a worldwide outfit, the growth is in China. So when the Chinese KFC division had a shortfall, the stock got clocked, Cramer said. Soon after, Yum! let it be known that its earnings would be slashed as it boosted its Chinese advertising. You had to buy the stock on that shortfall, said Cramer. Not long after, YUM's Chinese business began to turn and the stock headed right back up to its 52-week high. KFC's sales growth in China is more important to Yum!'s stock than the actual reported earnings of the entire chain. As much as we'd like to keep things simple and just focus on the earnings per share, sometimes the truly important metrics can elude us if we don't keep our eyes on the ball, Cramer said. Anybody who waited for revenue growth to kick in missed the whole move since 2009. Some so-called experts tell you to wait for revenue to roar, but they've kept you out of some of the best stocks out there, he warned. Earnings are not always all-important. Let It Ride Finally, Cramer said, if you have a core holding in your portfolio, a high-quality stock with terrific prospects that you want to own for the long haul, don't sell it at the first little gain or the first sign of turbulence. If you really have conviction in a stock, you need to let it ride, Cramer said, because it is a core holding and want to own it through thick and thin. If you don't follow through with that, he said, it's almost always a big mistake. The temptation to take a gain is palpable. It's a difficult task to keep a fabulous stock riding in your portfolio, because you never want to let a gain turn into a loss. If you own a stock and you think it could go up over the next few years, then by all means keep it, Cramer said. But all bets are off if the business starts to deteriorate. What makes him so sure of this rule? Cramer said his trust rates stocks on a scale of 1 to 4 every week. Those rated 1 are, by and large, meant to be core positions, and he wants as many shares as he can get. However, looking back over the last five years he found it unnerving to see how many of these 1 stocks the trust sold because of short-term market turbulence, only for the stocks to continue roaring ahead. Must Read: 10 Best Apple Products Ever A core position is what it says it is: something that's integral to your portfolio. It should not be so easily dislodged, he said. Resist the urge to sell your franchise players, no matter how tempting it may be. 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.

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Here’s How a Stronger Dollar Should Be Changing Your Investment Strategy

Friday, September 12th, 2014

a NEW YORK (TheStreet) -- There are a couple of ways to profit from the strengthening dollar, one of which is to simply buy it. Active investors looking for such exposure might consider the PowerShares DB US Dollar Bullish ETF . The European Union's move to lower rates last week and further easing in Japan have caused the dollar to break out of its multiyear downtrend. As you can see below, there is a strong technical setup for continued dollar strength (as shorter-term moving averages eclipse the longer-term) in a positive fashion: Read More: 10 Stocks George Soros Is Buying UUP data by YCharts What changed? Well, since the beginning of the year both Europe and Japan have been losing their respective fights against deflation. Japan seems to have been deflating long enough to turn itself inside out. Nevertheless, the central banks for both regions have launched efforts to devalue their currencies (against the dollar). Why do this? There is no quicker way to make one's goods more attractive to the largest consuming nation, which also happens to use dollars. Just six months ago we pointed out that the dollar looked to be weakening further and recommended buying commodities, via the PowerShares DB Commodity Tracking ETF -- priced in dollars -- as a result. It looks like it may be time to concede defeat and fold our hand on this one, especially in taxable accounts in which the blow will be softened by a tax loss. Read More: How the Apple Watch Stands a Chance With Teenagers in the Race for Wearables So whom does a stronger dollar help? And whom does it hurt? Let's start with oil, since it's probably the most widely used commodity. Since commodities are denominated in dollars, a stronger greenback will tend to force prices down. UUP data by YCharts Here are some others who benefit from a stronger dollar: The U.S. consumer, who has more purchasing power with a stronger greenback. U.S. Treasuries, because foreign investors searching for yield will buy them. Airlines, because of lower oil prices: Delta Air Lines Southwest Airlines , United Continental . International and emerging-market stocks: Vanguard FTSE Europe ETF ; Vanguard FTSE All-World ex-US ETF ; iShares China Large-Cap ; iShares Latin America 40 , iShares MSCI Emerging Markets . And those who might be hurt: U.S. large-cap stocks, because big companies will be less competitive overseas. So consider further profit-taking in positions such as the Vanguard Total Stock Index , iShares Russell 1000 Value and iShares Russell 1000 Growth here. Big, domestic oil producers: ConocoPhillips ; Chevron ; and ExxonMobil . Russia: Market Vectors Russia ETF, . It costs Russia something like $80 to get a barrel of oil -- the country's single largest export -- out of the ground. Oil and gas exports make up 40% of Russia's GDP. As the price drops globally, so does Russia's chances of turning around its already floundering economy. And that's not even taking into account current and future economic sanctions. Read More: Broadcom's Push Into the 'Internet of Things' Will Be a Winner At the time of publication, the author's firm held DBC, EEM, ILF, UUP, VGK and TLT in client accounts. Follow @ArgyleCapital // 0;if(!d.getElementById(id)){js=d.createElements);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); // ]]> This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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European Equities No Match for Strengthening U.S.

Wednesday, September 3rd, 2014

NEW YORK (TheStreet) -- European stocks continue to lag U.S. stocks as the economies' paths diverge. The Standard & Poor's 500 Index and German DAX stock index continue to move in opposite directions as the U.S. economy improves at a faster pace than before, and euro area fundamentals deteriorate. >>Read More:10 Stocks Carl Icahn Loves in 2014 The S&P 500 is tracked by the SPDR S&P 500 , an exchange-traded fund, and the DAX is tracked by iShares MSCI Germany Index . Aareading for the Purchasing Managers' Index in the euro area, which was released on Monday, fell to 50.7 from 51.8 for July. The figure came in below a preliminary reading of 50.8, according to London-based Markit. The index for Germany, the region's largest economy, was 51.4, compared with an aestimate of 52.4, while Italy's index was 49.8, compared with estimates of 51.9. The decline in European factory activity was largely the result of fighting in Ukraine and uncertainty over sanctions in Russia. In contrast, Markit said its final U.S. manufacturing PMI rose to 57.9 in August from 55.8 in July, marking its highest level since April 2010. The chart below shows that in 2014, euro-area manufacturing activity has trended downward, while U.S. manufacturing activity has risen to record levels. Chart provided by Trading Economics a European inflation figures released on Friday provided further testament to weakness in the region. Consumer prices rose by just an 0.3% annual rate in August, according to official figures released by Eurostat, meeting expectations but marking a five-year low. That was down from 0.4% in July, and is significantly below the central bank's target of 2% growth. >>Read More: Cramer: What’s Working, What’s Not The chart below also shows a divergence of inflation readings between the U.S. and euro area. In 2014, U.S. inflation has risen to an annual pace near 2% as economic growth and labor market conditions have improved. a Chart provided by Trading Economics A divergence of economic fundamentals in the euro area against the U.S. has led to the relative strength of U.S. equities versus German equities during the past year. Because Germany is the largest and most stable European economy, its equity market will be used as a proxy for European equities as a whole. The chart below shows a ratio of the S&P 500 over the German DAX dating back to 1990. U.S. equities outperformed German equities during the early 2000s as U.S. financial markets recovered from the crash of the technology sector. As the effects of the euro, a common currency, took hold, however, the DAX outperformed the S&P 500 during the middle part of the 2000s. Since the global financial crisis in 2008, the relative relationship of the two equity indexes has traded in a sideways pattern. aa Data provided by Yahoo Finance a >>Read More: Hubris of Market Bulls; Second-Quarter Big Picture: Best of Kass U.S. stocks could resume the leadership seen in the early 2000s, however, if the economies continue to diverge at the current pace. Economic releases later this week will speak volumes about the future of the relationship. On Thursday, the European Central Bank will discuss its view on monetary policy, and on Friday, U.S. nonfarm payrolls will be released. A way to gain exposure to U.S. strength and European weakness, aside from buying the S&P 500 and shorting the German DAX, would be to buy PowerShares DB US Dollar Index Bullish and sell CurrencyShares Euro Trust . If you believe in further U.S. dollar strength, commodities and commodity stocks are likely to be hurt. Selling SPDR Gold Shares , United States Oil , Market Vectors Gold Miners and Energy Select Sector SPDR could be good trades. The energy ETF owns Chevron , ConocoPhillips , EOG Resources , Exxon Mobil a and Schlumberger . The gold miners ETF contains Barrick Gold , Franco-Nevada , Goldcorp , Newmont Mining and Silver Wheaton . At the time of publication, the author held no positions in any of the stocks mentioned. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.








The Single Best ETF Strategy for Second Half of the Year

Monday, July 14th, 2014

NEW YORK (TheStreet) -- To me, it's all about income -- either current or future -- and the single best exchange-traded fund for this purpose is the State Street S&P Dividend ETF . It's a well-diversified portfolio of high-quality dividend paying stocks, many of whom raise their dividends consistently. Among the top holdings are PepsiCo , Coca Cola , AT&T , Chevron  and many other household names. If markets continue to rise without any meaningful correction (over 5% e.g.), the underlying stocks should do well. In the event of a pullback or even a prolonged period of underperformance, the dividends will soften the impact of the correction and will keep building for a future income stream. Now, of course, I'm not suggesting you put all your eggs in one basket, as it were. So before any new or increase allocations to SDY, you should have already prepared your portfolio by trimming bond funds to the minimum. As I've pointed out before, whether interest rates rise or not, bonds are not holding their value as a whole. >>Apple's Almost Back: A Chart You Should See >>Why JPMorgan Is Undervalued on Long-Term Earnings Growth Estimates Second, you may have positions in individual stocks that you feel are performers for the long haul, despite any dip which might occur tied to a pullback, correction or other. I'm not saying dump them, by any means, but check them again mid-year now that earnings seasons has pulled the curtain back. Make sure your assumptions about the fundamentals of those stocks still hold. Furthermore, you may have investments in ETFs that have served you well. Now is the time to make sure that the bulk of their holdings are held in stocks whose fundamentals you can identify. Characteristics to Seek OutYou want a combination of the following characteristics, but certainly all should be present in the single stocks you hold and the major holdings of ETFs in which you are invested: Strong balance sheets. I think Apple exhibits this characteristic very well. Visible and predictable earnings. One that I feel has proven itself in this particular regard is Verizon Communications . Above-category growth stocks. As Cognizant Tech Solutions , demonstrates, it's not always the best-known names that are in the lead of their sectors. Consistent and rising dividends. For me, Royal Dutch Shell is a classic example. As a side note, our company holds Royal Dutch Shell in our "Dividend Busters Program." Part of the secret to identifying these high-quality, low-volatility, solid dividend paying stocks is to enlarge your sphere to include international stocks that meet these criteria and are available in the U.S. as ADRs. Other internationally based companies that have exhibited respectable if not outstanding performance and are all held in our fund include Total , GlaxoSmithKline and Sanofi . When choosing ETFs, certainly any that holds a majority portion in these or similar stocks will provide you the balance of international exposure along with easy liquidity and solid performance. At the time of publication the author had no position in any of the stocks mentioned. Follow @Opursche // 0;if(!d.getElementById(id)){js=d.createElements);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); // ]]> This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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Cramer’s ‘Mad Money’ Recap: Getting Rich Carefully

Tuesday, June 24th, 2014

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. (This program originally aired on April 21, 2014.) NEW YORK (TheStreet) -- These are confusing times for the stock market, Jim Cramer told his "Mad Money" audience. There's always somebody telling you to do exactly the opposite of what you should really be doing. But Cramer said it's not about sounding smart, it's about getting it right -- what to buy, what to sell, what direction the market's headed. "You get those things right, and it's a heck of a lot easier to make money in this or any market," Cramer said. By doing your homework, "you just might learn something that will make you a better investor," he said, and a better investor is one who makes more money, "because that's the goal here." Cramer said he and Stephanie Link, the research director of Cramer's charitable portfolio, Action Alerts PLUS, recently went back over every trade AAP made over the last five years. Here's what Cramer has learned. Caterpillar had been going down for weeks on end as analysts raced to cut their estimates ahead of what looked to be a particularly bad quarter, Cramer said. The analysts had turned bearish after CAT's business globally took huge hits because customers were struggling to get credit for new machines. This was at the depth of the Great Recession. When Caterpillar finally reported, the quarter turned out to be even uglier than the analysts had predicted. But CAT's stock barely reacted to the bad news. "That's a classic sign that you're looking at a bottom," Cramer said. "The worst is over!" CAT roared and then rose. It may seem counter-intuitive to buy a stock right after the estimates have been slashed, but when you think about it, it actually makes a lot of sense. JPMorgan Chase is another example of this, Cramer said. It seemed done for after its "London Whale" trading fiasco of 2012. However, just like Caterpillar in March of 2009, JPMorgan's stock didn't get hit after analysts cut estimates. Instead, it flat-lined and then actually inched up slightly. Once we learned JPMorgan's losses were contained at $6 billion, that was the moment we had to buy, Cramer said. If you did, you rode a huge rally.Coming Back for Secondaries Everybody makes a mistake sometimes, Cramer said. But if you want to become a great investor you don't just need to learn from your mistakes, you need to learn how to recognize what your mistakes actually are and notice what works. "We're full of all sorts of unconscious biases, and that can make it incredibly difficult to learn from experience," Cramer said. Think empirically, he said. After analyzing the last five years' worth of trades as part of his research for Get Rich Carefully, his latest book, Cramer came to another counterintuitive realization: Stop worrying and learn to love secondary stock offerings. Cramer said we're all conditioned to believe that when a company issues new stock it's bad news for shareholders. When a company does a secondary, it tends to weigh on the stock for a time. But these days that totally reasonable fear of secondaries is also a mistake, Cramer said, because interest rates are still low by historical standards. For example, real estate investment trusts have done a huge number of these kinds of secondaries, and those deals have worked fabulously for investors. You can find these deals in all sorts of companies that were hit hard by the housing crash, said Cramer. They're now snapping back, like mortgage insurance companies, a group that had pretty much been left for dead. Cramer mentioned how investors could have made a killing on Radian if they had listened to his buy call in February. Cramer also likes the secondary offerings from master limited partnerships, the oil and gas pipeline players that are always issuing stock to finance their expansion plans to crisscross the country with pipelines. Enterprise Products Partners , Kinder Morgan Energy Partners and MarkWest are the best-of-breed players here, and they've become serial issuers of equity to expand their pipeline networks. These companies can be risky if interest rates are rising, Cramer warned, but if rates are stable you should jump all over their secondaries.The bottom line, Cramer said: Forget the conventional wisdom that says a secondary stock offering always means a company is in trouble. Know When to Fold 'Em Like "The Gambler" of song, Cramer has some suggestions for when you should fold your positions or even run. "When it comes to picking stocks, cash is not always king," he said. In fact, if you buy a stock just because it's sitting on a mountain of cash, you could get crushed. Think about it, Cramer said: What do Cisco , Microsoft , Oracle and Intel all have in common? People were lulled into buying their stocks at very high levels simply because they had so much cash on their books, as if cash per se is always good news. What really matters is how companies put that cash to work. Cash can been wasted on undisciplined buybacks -- when you see a company doing that, you should pass on its stock and walk away, Cramer said. Contrast this with one of the best performing stocks in the S&P 500 since the generational bottom in 2009, Wyndham Worldwide , run by Steve Holmes, one of the most shareholder-friendly CEOs out there today. Holmes buys back stock aggressively and when it makes a difference, particularly during those ravaging downturns when most other CEOs seem frozen. Holmes thinks it is his duty to return his company's excess cash to the shareholders via dividends, Cramer said. He's the model of what Intel, Microsoft and Cisco need at the helm. Here's another sign that you should fold. If you own shares in a company that starts blaming its customers for its own poor performance, it's time to walk away. "I learned this the hard way when my charitable trust decided to buy Juniper Networks , the maker of networking and communication equipment, back in 2011," said Cramer. Juniper encountered shortfalls and blamed a lack of Japanese orders in the wake of the tsunami and Fukushimi Daiichi nuclear disaster. But the stock continued to drop. He stuck with Juniper because the company had a ton of cash. Oops. Juniper's blame-the-customer act was a lame alibi, Cramer said. It turns out Cisco was taking market share the whole time and simply kicking Juniper's butt with a better mousetrap. There's a pretty simple moral here: When a company blames the customer, check to see whether the customer isn't actually still buying from a different vendor. Beyond EPS A huge part of this business is figuring out where a given stock is headed, said Cramer. That isn't always easy. Most stocks, most of the time, trade on their earnings-per-share numbers. When the earnings are headed lower, so is the stock; when the earnings go higher, the stock rallies, too. But for some industries, earnings are not the most important metric, said Cramer. If the only thing you're watching is the earnings per share, you could end up getting clobbered or missing some fabulous opportunities. Watch the key metrics for everything you own. For example, Cramer said, when it comes to oil companies, production growth is key. For many tech stocks, it's the average selling price of their products. In these two sectors, those metrics are more important that anything related to beating the earnings estimates. Devon Energy sagged due to production shortfalls, not earnings per share; Chevron rallied with lower earnings and higher production growth. Another mea culpa: Cramer admitted he totally missed the bottom for Micron MU, the semiconductor company that makes memory chips, back at the end of 2012. Micron's stock had been a dog for more than a decade. But then the stock jumped higher. "What did I miss?" Cramer asked. DRAMs, or dynamic random access memory chips, had a nice bump up in their average selling prices during the quarter. DRAM business had been so horrible for so long that many companies in the industry had simply given up, Cramer said. So supply had become constrained. Micron's been off to the races ever since, more than tripling from December 2012 to December 2013. One last metric to note, said Cramer: when a company is based in the United States but does a lot of business in emerging markets, particularly China. One of the best buys his charitable trust ever made was picking up Yum! Brands , the parent of KFC, Taco Bell and Pizza Hut, off a sudden decline in Chinese sales because of a KFC tainted-chicken scandal, Cramer said. While Yum! is a worldwide outfit, the growth is in China. So when the Chinese KFC division had a shortfall, the stock got clocked, Cramer said. Soon after, Yum! let it be known that its earnings would be slashed as it boosted its Chinese advertising. You had to buy the stock on that shortfall, said Cramer. Not long after, YUM's Chinese business began to turn and the stock headed right back up to its 52-week high. KFC's sales growth in China is more important to Yum!'s stock than the actual reported earnings of the entire chain. As much as we'd like to keep things simple and just focus on the earnings per share, sometimes the truly important metrics can elude us if we don't keep our eyes on the ball, Cramer said. Anybody who waited for revenue growth to kick in missed the whole move since 2009. Some so-called experts tell you to wait for revenue to roar, but they've kept you out of some of the best stocks out there, he warned. Earnings are not always all-important. Let It Ride Finally, Cramer said, if you have a core holding in your portfolio, a high-quality stock with terrific prospects that you want to own for the long haul, don't sell it at the first little gain or the first sign of turbulence. If you really have conviction in a stock, you need to let it ride, Cramer said, because it is a core holding and want to own it through thick and thin. If you don't follow through with that, he said, it's almost always a big mistake. The temptation to take a gain is palpable. It's a difficult task to keep a fabulous stock riding in your portfolio, because you never want to let a gain turn into a loss. If you own a stock and you think it could go up over the next few years, then by all means keep it, Cramer said. But all bets are off if the business starts to deteriorate. What makes him so sure of this rule? Cramer said his trust rates stocks on a scale of 1 to 4 every week. Those rated 1 are, by and large, meant to be core positions, and he wants as many shares as he can get. However, looking back over the last five years he found it unnerving to see how many of these 1 stocks the trust sold because of short-term market turbulence, only for the stocks to continue roaring ahead.A core position is what it says it is: something that's integral to your portfolio. It should not be so easily dislodged, he said. Resist the urge to sell your franchise players, no matter how tempting it may be. 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.








Jim Cramer’s ‘Mad Money’ Recap: Next Week’s Game Plan

Saturday, June 21st, 2014

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. NEW YORK (TheStreet) -- Feeling a little new-high fatigue after the Dow and S&P 500 reached new highs yet again? Jim Cramer asked his Mad Money viewers Friday. Well, here are some ideas to watch next week to get you excited about the market again. U.S. industrial stocks that do business in China have been on a tear, Cramer said. China's manufacturing PMI number, due Monday, is a critical read for them. In addition, the semiconductor sector has been a real standout, especially Micron , which reports Monday after the close. Cramer expects a lights-out quarter. Oracle disappointed today, down nearly 4% after reporting fourth-quarter 2014 numbers that fell short of expectations. Cramer still expects it to go down a little bit more Monday before coming back. Tuesday brings earnings from pharmacy giant Walgreen . Cramer thinks the company will announce a restructuring that could send the stock even higher than its already stand-out performance this year, especially if it is able to complete a deal that allows it to move to tax-friendly Britain. Wednesday brings earnigns from Monsanto , which Cramer said is becoming more of a biotech company than an agriculture play, Cramer said. Monstanto is always heavily shorted because its controversial and overvalued, but he'd be a buyer on any dip. Meanwhile, Cramer said General Mills will deliver a decent number that will get a subdued reaction and then bounce back because it does offer a pretty good yield. Hes more of a fan of beer stocks, including Molson Coors Brewing , which also reports Wednesday. Hes expecting to learn of a big restructuring or merger plans. Accenture and Nike report Thursday. Accenture has come on strong lately, Cramer said, with a rebound in enterprise-technology spending. Nike, part of Cramer's charitable trust Action Alerts PLUS, refuses to budge on even the best of days. That's usually not a good sign, and Cramer said he's nervous. Still, long-term growth has been so good that he's holding on. Friday we get results from KB Homes , a company that can't put a decent streak together. Cramer thinks it's just too hard for people to get a mortgage these days, and young people have so much college debt that they cant even contemplate buying a house, Cramer said. He's bracing for bad news. The bottom line, Cramer said, is we are in the home stretch of the quarter. Barring a takeover of the oil fields in southern Iraq, which would send the price of oil skyrocketing, we should glide nicely into the end of the quarter with some good buys to be had, Cramer said. What the Market Is Saying Is is time to ring the register with Chevron trading at $131? That question gave Cramer sticker shock and he wondered, what can Chevron's unusual success tell us about today's markets? If you bought Chevron every time it dipped below $120 and sold in the high $120s, you made a killing over the past year, Cramer said. Meanwhile, since November, PPG Industries had languished in the $180-$190 range. Three weeks ago, it broke out and is still running higher. EOG Resources and Union Pacific have both gone from tiptoeing higher to galloping higher. The graybeards in the market tend to be repelled by these kind of stocks, deeming them too expensive, Cramer said. They're cynical about breakouts they missed. Once a stock has consolidated multi-year gains and then blasted off to record levels, they tend not to come back down, Cramer said. Cramer doesn't care where a stock is coming from but where it's going to, and he's willing to swallow his pride when he misses one, as in the companies mentioned. These differ from Walgreen and Monsanto breakouts, where he shrugs and admits that he whiffed on them. Ideally, Cramer said, you spot a stock or sector before sticker shock has a chance to set in. That's how he feels about the aerospace and bank segments of the markets. High on GW Pharmaceuticals Cramer's been gazing at a serious opportunity in UK-based marijuana stock GW Pharmaceuticals . This isn't merely a speculative play on more U.S. states legalizing medical marijuana for cancer patients, Cramer said. The company concentrates on creating new drug treatments from the compounds found in the plant. Doctors dont want to write a prescription to smoke a joint, Cramer said, but theyre much more comfortable prescribing a pill.GW Pharmaceuticals has an impressive pipeline of drugs made from cannabis. A mouth spray for multiple sclerosis spasms, Sativex, has been approved in some 25 countries, Cramer said. The company is also studying its use as a cancer drug. If the drug gets approved by the U.S. Food and Drug Administration, "it could be huge," since GW Pharmaceuticals has licensed overseas rights to the treatment to Bayer and Novartis but retains exclusive rights in America. A second drug, Epidiolex, derived to treat severe epilepsy, is in phase II trials and demonstrating "fabulous results," Cramer said. While it will be years before this second drug is approved, peak sales forecasts are up to $3.4 billion by 2024, Cramer said. That's why there's significant opportunity in this stock. And the Winner Is... All week Cramer has been looking at winning international stocks in conjunction with the World Cup, and now he's ready to declare a winner. His choices were Dutch companies Unilever and Royal Dutch Shell , Constellation Brands with its huge Mexican beer business, and Anheuser-Busch InBev , the U.S./Brazilian/Belgian beer juggernaut. He even named GW Pharmaceuticals his "sympathy candidate" from England. Cramer's winner is Constellation Brands -- in part because a major deal in the beer space could be imminent. Morgan Stanley just updated Molson Coors to hold from sell, and Cramer thinks it's because the analyst must smell a deal coming. Molson would be perfect for Constellation, Cramer said, and that makes it a winner. Food Fight As part of CNBC's "Disruptor 50" series, Cramer welcomed Josh Tetrick, CEO of Hampton Creek, a private company backed by some big-time venture capital names and poised to disrupt the food industry. Tetrick's company is using plants to replace eggs in a variety of food products, Cramer said, making their products a replacement option for people with high cholesterol and those who choose or must avoid animal proteins in their diet. Cramer has always been intrigued by the investment opporuntiis in the healthy food space, but only if the products actually taste good. Cramer sampled Hampton Creek's new "egg-equivalent" eats, and deemed them "absolutely delicious." Tetrick said that what separates Hampton Creek and makes it a potential industry disruptor is that it's not just sold in high-end supermarkets like Whole Foods . You can also find their products in Safeway , Costco and, soon, Dollar Tree , Tetrick said. Cramer said the company could transform the food industry. Lightning Round In the Lightning Round, Cramer was bullish on Prudential Financial , Globalstar , Federal Realty , Rangold and Ultragenyx Pharmaceutical . Cramer was bearish on Kite Realty Group and Yamana Gold . 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. -- Written by Chris Sahl in Boston.

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