Jim Cramer's Mad Money Stock Recap Aug. 22nd
Fun and GameStop (NYSE: GME - News)
Ahead of "the biggest video game event of the year," the September release of Halo 3, the flagship enterprise of Microsoft's Xbox video game system, Cramer would buy GME rather than Microsoft, since he thinks Halo 3's success will barely move MSFT's needle. GME is up 33% since Cramer recommended it in March. Cramer thinks of video games as a staple comparable to consumer goods, since they will always be bought in lean times, but cautioned viewers to buy GME only on weakness after Thursday's conference call, and advised against making the trade if the company misses estimates of between 9 cents and 13 cents. He would sell GME after Halo 3's release.
Penny Pinching: Dollar Tree (NasdaqGS: DLTR - News), Dollar General and Family Dollar (NYSE: FDO - News)
Although there is room for confidence that stocks will rise, the consumer is likely to cut down on spending by shopping at low-end stores. Cramer calls DLTR best-of-breed of inferior goods, since it has increased traffic for the sixth consecutive quarter, is accepting food stamps and debit cards and is increasing profits by selling merchandise that costs more than a dollar. In addition, DLTR should outperform rival Dollar General, which was recently taken private and is closing stores and FDO, which has double the stores of DLTR and may be facing saturation. Cramer would wait five days before buying DLTR, which has a sales growth of 4%.
CEO Interview: David Snow, Medco Health Solutions (NYSE: MHS - News)
David Snow reported $60 billion worth of brand drugs are "going generic between now and 2012," which means greater sales volume. The largest mail-order pharmaceutical distributor is averaging 6% growth yearly and is looking ahead with a "straight line of sight." Cramer would buy MHS on any decline.
Published By SeekingAlpha
Ahead of "the biggest video game event of the year," the September release of Halo 3, the flagship enterprise of Microsoft's Xbox video game system, Cramer would buy GME rather than Microsoft, since he thinks Halo 3's success will barely move MSFT's needle. GME is up 33% since Cramer recommended it in March. Cramer thinks of video games as a staple comparable to consumer goods, since they will always be bought in lean times, but cautioned viewers to buy GME only on weakness after Thursday's conference call, and advised against making the trade if the company misses estimates of between 9 cents and 13 cents. He would sell GME after Halo 3's release.
Penny Pinching: Dollar Tree (NasdaqGS: DLTR - News), Dollar General and Family Dollar (NYSE: FDO - News)
Although there is room for confidence that stocks will rise, the consumer is likely to cut down on spending by shopping at low-end stores. Cramer calls DLTR best-of-breed of inferior goods, since it has increased traffic for the sixth consecutive quarter, is accepting food stamps and debit cards and is increasing profits by selling merchandise that costs more than a dollar. In addition, DLTR should outperform rival Dollar General, which was recently taken private and is closing stores and FDO, which has double the stores of DLTR and may be facing saturation. Cramer would wait five days before buying DLTR, which has a sales growth of 4%.
CEO Interview: David Snow, Medco Health Solutions (NYSE: MHS - News)
David Snow reported $60 billion worth of brand drugs are "going generic between now and 2012," which means greater sales volume. The largest mail-order pharmaceutical distributor is averaging 6% growth yearly and is looking ahead with a "straight line of sight." Cramer would buy MHS on any decline.
Published By SeekingAlpha
posted by Stock Administrator @ 7:59 AM
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