Cramer’s homework uncovers intriguing stock
Sometimes Jim Cramer tells a caller that he needs to do homework before he can make a decision on a stock. And he's not kidding.
Following is Cramer's research or homework on stocks recently called to his attention by investors who watch the TV show.
United Therapeutics (UTHR)
On December 2nd Yvonne in California asked about United Therapeutics, an emerging biotech firm.
From homework, Cramer discovered that United Thearapeutics is a profitable company, specializing in drugs for pulmonary arterial hypertension, a particularly life-threatening type of high blood pressure.
"Now, United Therapeutics spiked hard last month when the FDA approved its oral treatment for that disease earlier than expected. There are a lot of naysayers out there wringing their hands about potential competition, but I like the company's prospects. However, if you owned the stock before its monster move higher, then pat yourself on the back and take something off the table. And if you're thinking about buying United Therapeutics, I suggest waiting for a pullback before you pull the trigger."
Anika Therapeutics (ANIK)
Also on December 2nd Karen in Florida called about Anika Therapeutics, another biotech
According to Cramer's research, Anika develops products that protect and repair different kinds of tissue with its products used in applications ranging from orthobiologics and dermal to ophthalmic, veterinary and more.
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"Anika is super-small, super-speculative, and it has hardly any coverage on Wall Street, but the company is profitable, and it's only trading at 24 times this year's earnings estimates, which is pretty darned cheap versus its 30% growth rate. That said, this is a very risky stock with a market-cap of less than $500 million, so it is absolutely not for the faint of heart. Although after watching Intercept Pharma go up 370 points in a couple of days, I'm sticking with the concept of owning one speculative biotech for certain. Anika's intriguing, but I give it my blessing only for speculation, and only if you use limit orders and wait for weakness before you think of buying."
Ryman Hospitality Properties (RHP)
On December 5th, Guy in Georgia wanted Cramer thoughts on Ryman Hospitality Properties.
Cramer's homework showed that Ryman is a niche real estate investment trust that owns four convention hotels, all of which are run by Marriott under the Gaylord Hotels brand.
"Like the vast majority of REITs, Ryman got crushed last year as rising interest rates drove investors away from high-yielding fixed income alternative stocks. On top of that, the company lowered numbers right before the big REIT convention last summer—bad news with bad timing. But since October, Ryman has been bouncing back after reporting better numbers. I could see this stock, which sports a 4.7%yield, benefiting if we start to see stronger convention bookings or still lower interest rates diminishing the bond market competition. But honestly, they only own four hotels, andif you want to play the lodging space, I'd much rather go with best-of-breed Starwood or Wyndham Worldwide, or even Hilton."
CommVault Systems (CVLT)
On December 12th, a viewer named Utah (who called in from New York) asked Cramer about CommVault Systems.
Looking at Cramer's homework, the company is a provider of data and information management software
"CommVault got poleaxed in the fourth quarter after a slew of negative data points. Even after the thrashing, CommVault's far from cheap, selling for 35 times earnings. Worse, their largest partner is Dell, which is poised to shed market share now that it's taken itself private. I just can't justify going near CommVault here, especially with no catalysts on the horizon," Cramer said. "If the company can put up a couple of decent quarters, maybe I'll change my mind, but not until then."
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