Cramer's 'Mad Money' Recap: Next Week's Game Plan
"Look behind the headlines," Cramer commanded viewers, as he explored three high-profile companies that reported yesterday. Those companies were Amazon.com(AMZN) , Starbucks(SBUX) and Facebook(FB) , stocks Wall Street loves, dislikes and absolutely hates.
Cramer said the headlines surrounding Amazon's earnings sounded a wholesale retreat for the ecommerce giant, but in reality Amazon's problem is simply too much demand.
He said the company is investing heavily in new warehouses to deliver more goods faster, ultimately making customers even happier. Meanwhile, it's expanding gross margins by 8%. What's not to love?
Starbucks also reported a strong number with same-store sales up 7%. But the headlines only focused on a decline in sales that started in June and continued into early July.
Cramer said the company seems to have hit a wall, which is worrisome, but even on the company's conference call things seemed to already be getting out of hand, with analysts panicking. Cramer said he's taking more of a wait-and-see approach to Starbucks.
Finally, there's Facebook. Cramer said Facebook's first conference call was "just plain weird," more of an infomercial for itself rather than an update on how the company is doing. He said it's clear that Facebook needs a sales force to sell it's good and cannot rely on a self-service approach for advertisers like Google(GOOG) . The company was overvalued at its IPO, he said, and remains overvalued today.
Facebook may know its users, Cramer concluded, but they're still amateurs at making money.
For "Speculation Friday" Cramer highlighted a company he teased on Thursday, a company that's approaching a key stock level that investors afford to miss. That company is Sprint Nextel(S) and the key level is $5 a share.
Cramer said that normally when a stock has had a big run like Sprint just had, he'd be recommending investors take profits. But in the case of Sprint, now just 70 cents away from $5 a share, investors need to keep on buying. Why? Because $5 a share is a key level where big institutional investors are allowed to buy in and when there are more buyers, stocks go higher.
There are three things Sprint is doing right, said Cramer. First, the company finally inked a deal to carry the iPhone, which 1.5 million customers bought last quarter, 40% of them new to Sprint.
Second, the company is the only carrier to offer unlimited data plans, the "hook that catches fish," as Cramer called it.