A Sneak Preview Into Earnings Season?
With the end of the quarter just a couple of weeks away, investors want to get an idea of what companies will report come July. Luckily for them, next week holds a great “sneak preview,” Cramer said, for a host of industries and companies.
“It’s like the trailers before the feature film of the earnings season,” he told viewers during Friday’s Mad Money.
Before we take a look at those, though, investors should know that Cramer thinks the Dow is range bound between 9,700 and 10,700 until we get some positive economic data. Sure, the markets finally seem to have shrugged off the threats of the euro zone, and it looks like China has succeeded with the “soft landing” of its economy, but weak retail numbers, high unemployment and BP’s oil spill still rule the news cycle here in the States.
That said, let’s take a look at next week:
First, tech. Just yesterday Cramer talked about how much market cap value Apple has destroyed among its competitors. Well, on Tuesday and Thursday we’ll find out just how much for Adobe and Research in Motion , respectively. Any attack by these companies on Apple could bring the stock down, but that’s your opportunity to buy more.
Also, Dell holds an analyst meeting on Wednesday, so look for more value destruction here as well, Cramer said, “although self-destruction at Dell has certainly played a bigger role” with this company. And Jabil Circuit’s earnings on Tuesday should confirm the Mad Money host’s belief that the tech industry as a whole is doing better than most people think.
Part two is all things housing and its related companies. Cramer likes Bed Bath & Beyond ahead of its Wednesday earnings report because the stock showed some resilience today, bouncing back from at three-point loss on Thursday. With Lennar on Thursday and KB Home on Friday, expect to hear some bullish talk in the face of the end of that homebuyer tax credit. Of course, these companies were bullish right into the housing collapse, too.
Number three, the shoe business, should also shine next week. Cramer recommended buying Nike on any weakness – if there is any – after its reports on Wednesday, while also keeping an eye on Finish Line , “an arms merchant to the footwear bull market.” His group favorites, in order, are: Deckers , Skechers and then Steven Madden .
Food stocks are the fourth sector to watch. ConAgra , maker of the Healthy Choice, Chef Boyardee and Banquet brands, might show strength when it announces numbers on Thursday. Cramer said the company “has the ability to tell a good story,” thanks to great management and lower commodity costs.
As for eating out, weakness in Sonic could mean a buy call on Darden Restaurants . Cramer thinks the company’s Wednesday report will be “great.” BP’s Gulf spill will dominate the conference call, as analysts ask about shrimp costs, but we’ll be more concerned about earnings. How are Darden’s Olive Garden and Red Lobster chains doing? And are people finally returning to Capital Grille, which Cramer called “the Tiffany of dining.”
In financials, number six on the list, Jefferies released its numbers on Tuesday. This company should be a big winner in financial reform because the new law will allow Jefferies to break into the swaps business, Cramer said, something it couldn’t have done on its own. Still, he’s not so sure the quarter will be all that great, so don’t buy until after if you choose to do so at all.
And finally, whatever you do, stay away from Walgreen and Rite-Aid , reporting Tuesday and Wednesday, respectively. These two are locked in a fierce battle in the drugstore space, making them a virtual no man’s land for investors.
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