Prof. Cramer Grades Earnings: Who’s Teacher’s Pet?
By: Overwhelmed by all the reports that companies are turning in right now? Cramer said think of yourself as a teacher and the companies as your pupils. Grade them!
That what he did on Wednesday's broadcast.
Looking at the results delivered earlier in the week, Cramer said DuPont deserves praise for improvement; "the company performed much better than last time," he said. Although results might have been short of excellent, Cramer said, "when a D student gets a C it's a big deal. DuPont won't get detention this quarter.
By contrast, Cramer said Travelers belongs at the head of the class, largely for earnings that show a combination of higher rates and thoughtful underwriting.
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IBM deserves a gold star.
"IBM makes as much money as it did not because of the oft-charged alchemy of big buybacks but also because it makes a huge amount of profit on each sale. What a remarkable quarter - pure dean's list - and a nice surprise," said Cramer.
Cramer added that after a terrible quarter last time, Google can return to honors class.
"This quarter was a redemption song and a complete reinstatement of Google's greatness, with terrific growth and new products that are stealing the limelight from just about everyone. Plus, there was no defensiveness, just unbridled optimism. I felt like doing an endzone dance at its conclusion, but then they'd throw a flag for excessive celebration."
What's the bottom line?
All told, companies that Cramer have been watching closely have either demonstrated strong improvement or earned outstanding status. If earnings are akin to reports on growth and profit, then these companies may be the proverbial teacher's pets.
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