Hitting The Gas On Autos?
Cramer’s watchword expression in this type of market, courtesy of the headwinds from Washington and China, is capital preservation. Investors have to be extra careful.
But, Cramer has found a little bull that’s been working and should keep working, the auto repair plays, specifically the big auto repair winner Monro Muffler Brake. This is the largest pure play undercar service-chain in America with 780 locations.
MNRO is benefiting from the closing of all those Chrysler and General Motors dealerships because it means less competition and the resurgence in the auto industry at the same time. Plus, Monro does not need a strong China nor is it on the radar screen of President Obama. The stock is up 62% since the first time Cramer recommended it on August 18 of 2008 at $21, and it’s up 30% since he reiterated the buy call on May 15 at $26.64.
Now, does this small-cap winner, which is at its 52-week high, have any juice left? The company reported a strong fiscal third quarter today, beating Wall Street’s earnings by 38 cents on better than expected exposure. Also, Monro’s same store sales increased by 7.2%, and the company raised guidance for 2010.
But is that enough to keep this one going? Cramer talked with Robert Gross, the Chairman and CEO of Monro Muffler to find out. Watch the video for the full interview.
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