Two weeks ago, Cramer urged viewers to buy Deckers Outdoor but sell Under Armour, even though the both stocks’ charts looked bullish. Well, the earnings results are in, and the Mad Money host was right.
Deckers is up 15% from Cramer’s recommendation, when it traded at $84.55, thanks to an upside surprise. The company beat the Street’s estimates by 34 cents a share and guided higher for the fourth quarter. Management was very positive on the conference call, and Cramer said he thinks the stock “is still a great story.”
Under Armour reported an “exceptional” quarter on Tuesday, besting the analysts’ predictions by 8 cents a share. But it was a dismal outlook for the fourth quarter that took the stock down 12% today: Management said sales would drop to $201 million from $270 million in Q3. Apparently, a glut of inventory is forcing Under Armour to discount merchandise, and that will hurt revenues. So investors should avoid UA.
Lastly, Cramer revisited a stock that stumped him during the Oct. 16 Lightning Round, Neutral Tandem . The company allows phone companies to more efficiently and cost effectively send traffic to other carriers, and it’s “a cash machine.” Investors’ fears about competition pulled the stock down 30% since the Aug. 6 earnings report, but Cramer said TNDM’s rivals lack the scale necessary to be a threat. So with the stock trading at 12 times 2011 earnings and its 23% long-term growth rate, Neutral Tandem is “a steal.”
Want an update on the potential of natural gas in the US? Watch Cramer’s take on the issue in this video.
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