From: James Cramer
Sent: Thursday, February 09, 2012 10:17 PM
To: Nicole Urken
Subject: New Tech
I think we have to do a series about non-tech tech, about how so much of the important innovation isn’t happening in Tech but in companies making terrific advances.
From: Nicole Urken
Sent: Thursday, February 09, 2012 11:13 PM
To: James Cramer
Subject: Re: New Tech
Think this great idea. Longer-running theme and idea being "innovation" as a driver for 2012. It's not just Facebook! It's companies continuing to reinvent themselves.
If you read through Under Armour’s January 26 fourth quarter conference call, you’ll notice that the word ‘innovation’ is mentioned 19 times. So many mentions of a word normally associated with the tech sector from none other than… an athletic apparel maker. This was so significant that Tuesday’s "Mad Money" show highlighted this emphasis in detail. As the company’s management emphasized, UA’s focus on new technologies centers on a range of exciting new products: “Charged Cotton” could quadruple UA’s addressable market; “Charge RC” is emblematic of advances in UA’s footwear business, allowing it to compete with industry behemoth Nike ; “Storm” is UA’s next-generation outwear product that is water resistant (check it out — I pour water on Jim’s UA outfit below to demonstrate the effectiveness of the product!). Next up? Heat-moderating “ColdBlack Technology” along with an underwear initiative.
While this is all well and good, the reason this matters to viewers of "Mad Money" is that it is driving earnings by providing pricing power, and expanding the company’s addressable market/target demographic. This example of innovation, which has allowed UA to hit its current 52-week high and which will continue to be a driver throughout 2012 and beyond, is emblematic of what we are seeing across a range of sectors… and something we will continue to emphasize on "Mad Money" throughout 2012. Think: Consumer staples, oil & gas, healthcare, and beyond.
Hey — think about the share price appreciation Domino’s — whose CEO Patrick Doyle came on "Mad Money" on Tuesday as well — has seen ever since it rolled out its new, “non-cardboard-tasting” recipe. Not to mention its technology driver with an all-improved online ordering system.
The bottom line: Apple is the true innovation barometer—even with loads of cash on its balance sheet (the high quality problem no one can stop talking about)—a big acquisition isn’t in the cards—why shake up a well-oiled machine of top-selling new products developed internally? But this spirit extends beyond tech. Keep a look out for the new ‘notion of innovation’ segments on "Mad Money"—they will span across a number of sectors and highlight the names best-positioned for future growth.
Random Musings: In retail, there is growing thirst to be in the hot turnaround story. After investors piled into JC Penney around its analyst day, Gap shot up after producing positive same-store sales and solid read-through for its spring selection.
Read on for Cramer’s Plays on $5 Gas
When this story was published, Cramer's charitable trust owned Apple.
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