Cramer's Mad Money Daily Recap 8/16/05 - Drugs, Cigarettes

[Thierry Martin]

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Cramer's Mad Money Daily Recap 8/16/05

Stock of the Week - Drugs, Tech and Cigarettes

Stock of the Week blows up

Dick's Sporting Goods (DKS) lost more than 16% today after Cramer named it the stock of the week yesterday.

Cramer said. "You got hurt but you didn't get annihilated."

Deere (DE), lost more than 11% on a disappointing earnings report.

Cramer thinks the problem at Dick's is about guidance and that the quarter was OK.

While the company didn't deliver the numbers this quarter, it was the first time it didn't. "I'd buy Dick's, not sell."

Deere is best of breed, and Deere's has had very good management for a long time. However, you shouldn't buy aggressively because Caterpillar (CAT) and Terex (TEX) are also both down, and they have much more momentum than Deere.

Intel's (INTC) problems stem from not being able to deliver enough product. If it had more chipsets, the numbers would go back up.

Cramer likes Wachovia (WB), which announced a buyback and a boost in the dividend, and sells for 12 times earnings. Cramer said Goldman Sachs (GS) began buying its stock back 20 points ago. Financials don't have the opportunities to invest their money right now, so they buy their own stock, which is what Wachovia is doing.

Drugs and Cigarettes

More and more people are getting lung cancer, even nonsmokers. This benifits Genentech (DNA), the makers of Tarceva, a targeted lung cancer drug. It's the only drug for lung cancer right now, Cramer said.

The biggest mover this year other than Google (GOOG) was Genentech after it got approval of its colorectcal cancer drug Avastin.

Cramer was bullish on Altria (MO) because "people continue to smoke, and Altria's international business is en fuego."

Herb Greenberg guest segment

Guest Herb Greenberg said he is surprised Dick's Sporting Goods (DKS) wasn't down further.

Greenberg said Parlux Fragrances (PARL) "Stinks to such high heaven that all the perfume in Paris couldn't cover up the stench."

Cramer replied that it seemed to have earnings momentum and wasn't expensive.

Greenberg said Sonic Solutions (SNIC) would have missed earnings were it not for a tax credit no one was expecting.

Good news after the close

After the close, Hewlett-Packard (HPQ), reported better than expected earnings and said many of its different businesses are doing very well.

Applied Materials (AMAT) said business has gotten better and has the numbers to back it up, "which they haven't in a long time." This is a great setup for tomorrow. "Every time we get a selloff in tech, it's going to be a 'mon back," said Cramer.

Lightning Round

Bullish - Hewlett-Packard (HPQ), Commerce Bank (CBH), Citigroup (C), Walgreen (WAG), Mentor (MNT), SanDisk (SNDK), Verint Systems (VRNT), Thermo Electron (TMO), BP (BP), ConocoPhillips (COP), Starbucks (SBUX), Yahoo! (YHOO), Google (GOOG), ATP Oil & Gas (ATPG), Terex (TEX), RSA Security (RSAS), Homex Development (HXM), Bancolombia (CIB), Goodrich Petroleum (GDP), Home Depot (HD), Genzyme (GENZ) and Patterson-UTI Energy (PTEN).

Bearish - Yankee Candle (YCC), Shanda Interactive (SNDA), Chicago Mercantile Exchange (CME), Mentor Graphics (MENT), StemCells (STEM), Peet's Coffee & Tea (PEET), VeriSign (VRSN), Southwest Airlines (LUV), ViroPharma (VPHM), FrontLine (FRO), Entrust (ENTU), Sonic Solutions (SNIC), Hurco (HURC), Oracle (ORCL), Elan (ELN) and Sonus Networks (SONS).