Cramer’s Favorite Growth Stocks – A Second Look
UltaSalon has risen from $96 to $100.
Cramer Comments: "Ulta reported aterrific quarter, with 8.4% same store sales growth. Management also indicatedthat they're seeing a strong start to the holiday shopping season.
"The company's newly appointed Chief Financial Officer, a guy who'd been on the job for just six weeks, announced his sudden resignation. We never like it when a CFO resigns, as that can be a sign something might be wrong with the financials, but given that this particular CFO had been there for less than two months, this was probably just a case of him being the wrong guy for the job."
Tractor Supply has unfortunately been a real dog, falling from $98 to $88.
Cramer Commentary: "I have to admit, I blew it with this one, recommending the stock at $98—ten bucks above where itis right now. What went wrong? The expectations got too high, so high that even when Tractor Supply reported a beat and raise on October 24th, that wasn't good enough to prevent the stock from going lower."
"However, now that the expectations have been adjusted downward, I think Tractor Supply makes a lot more sense. This company is still taking market share in a very fragmented industry, it's still growing its store base, and it should get a boost from the turn in housing."
Gilead shot up from $68 to $74.
Cramer Comments: "Gilead is the number one maker of HIV drugs, and it's also developing a revolutionary treatment for Hepatitis C that has the potential to be a mega blockbuster. Plus,Gilead has a very deep pipeline, including a cancer drug that's now entering phase 3 clinical trials."
"This story is playing out just as we thought, and best of all, Gilead is somewhat immune to a fiscal cliff induced recession, because people don't stop taking life-saving medicines just because the economy slows down."
Alexion was put through the meat-grinder, falling from $111 to $95.
Cramer Comments: "Alexion is an orphan drug maker whose lead drug, Soliris for a number of ultra-rare blood disorders, has been incredibly successful. However, even though Alexion raised guidance when it reported on October 24th, the stock sold off because Soliris sales only met expectations rather than beating them.
"I think this was a case where the market overreacted. My view is that the Street modeled the quarter wrong and punished the stock."
Not only is Alexion looking at Soliris for other uses, "they have some intriguingthings in the pipeline, although they're still in the early stages ofdevelopment."
Diageo has rallied from $113 to $119.
Cramer Comments: "You know Diageo from its brands—think Johnnie Walker,J&B, Smirnoff, Ketel One, Captain Morgan, Jose Cuervo, Tanqueray, BaileysIrish Cream and Guinness."
"Diageo's a master of branding, it's got growth all over the world, and a solid 2.88% yield. Everything is going Diageo's way— I say you can stick with Diageo."