SA Editor Miriam Metzinger
Stocks discussed on the
of Jim Cramer's Mad Money TV Program,
Wednesday August 28.
Packaged Goods Are Dead Money: Procter and Gamble (
), Kimberly Clark (
), Clorox (
), Hershey (
Why are packaged good plays, like Procter & Gamble (
), Kimberly Clark (
), Clorox (
) and Hershey (
) selling off? Cramer thinks rising interest rates are to blame,
since these stocks are bond equivalents. Some say the rise in oil
will bring raw cost pressure, others emphasize the exposure these
companies have to lagging emerging markets. Cramer still adheres to
the thesis that it is all about interest rate fears, and these
stocks are not going significantly higher. He would sell them into
The Least Perilous Stocks: TJX (
), Urban Outfitters (URBN), Viacom (VIA), Celgene (CELG), Gilead
(GILD), EOG Resources (EOG), B&G Foods (BGS), Starbucks
(SBUX), Hain Celestial (HAIN), Whole Foods (WFM), Boeing (BA),
Humana (HUM). Other stocks mentioned: Agios Pharmaceuticals
(AGIO), Southwest Airlines (LUV), US Airways (LCC).
With the Dow down 48 points on worries about Syria and domestic
tapering, Cramer discussed some of the least perilous stocks in
TJX Stores (
) reported a strong quarter and has enough cash to buy out
inventories of higher-end retail. Urban Outfitters' (URBN)
Anthropologie brand is a winner. Cramer would buy on a
Celgene (CELG) and Gilead (GILD) are buys on any decline. Viacom
(VIA) has doubled its buyback, and while it might be hard to find a
dip in the stock, if it topples, it is a buy. Humana (HUM) is a
winner with the Affordable Care Act. EOG Resources (EOG) is a buy
on the basis that oil has risen, but oil stocks have not seen gains
in tandem with the commodity. B&G Foods (BGS) is down 10% and
has a 4% yield. Starbucks (SBUX) reported a stellar quarter and has
solid growth ahead. It has only declined 5%, but at least it has
dipped. Hain Celestial (HAIN) reported a knockout quarter, and
while it may be too high to buy, it is a main supplier of Whole
Foods (WFM) which has dipped. Boeing (BA) may be more in demand now
that fuel prices are up and its Dreamliner is a cost saver.
Cramer took some calls:
Agios Pharmaceuticals (AGIO) is a good speculative play and
Cramer would not sell it.
Southwest Airlines (LUV) is a victim of the entire airline
industry which is facing higher fuel prices. Cramer felt the game
changer in the industry was the proposed merger of US Airways (LCC)
and American Airlines. Since the Justice Department has nixed the
deal, Cramer doesn't see a reason to invest in this industry.
CEO Interview: Richard Smith, Realogy (RLGY)
Housing stocks saw a run-up, until they were hammered on fears
of rising interest rates. However, Realogy (RLGY), which works with
the major real estate brokers in the U.S., reported a 22 cent
earnings beat with revenues up 17% and transaction volumes rising
21% yoy. However, given persistent worries about interest rates and
housing demand, the stock fell 23%, giving investors only a 13%
gain since Cramer got behind it in November. In spite of the
"enormous correction," CEO Richard Smith still thinks there is
"enormous pent-up demand." Interest rates are still historically
low, even with the uptick in rates. He discussed the fact that
housing is local; some areas are stronger than others. He
emphasized that housing is not as strongly related to interest
rates as it is to demand, which is growing.
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