A Review of Jim Cramer’s ‘Week Ahead’ Stocks for 11/18/2013 – 11/22/2013

Jim Cramer does a segment on his show “Mad Money” every Friday where he looks at some of the key companies reporting in the week ahead. One thing is almost certain about earnings season – some stocks will sell off. The question the investor has to answer is whether or not the sell off is an opportunity (or a clear sign to exit). Below, I’ve gathered all of the key statistics (with an emphasis on growth) for each company below for your quick perusal.

From a technical point of view, many of them have really ramped, courtesy of the strong market over the last few weeks. I put JCP, SPLS, FL, DKS, WSM, PETM, HD, TGT, DLTR all in the overbought category, meaning that you are almost sure to be able to get into these stocks at a few percentage points lower price in the near future, with the obvious caveat being that the stock could sky-rocket after earnings.

On a fundamentals basis I always favor looking at the PE multiple relative to the EPS growth of the company. If growth rate equals the PE, then that is a ‘cheap’ stock.

The stocks that stand out with respect to that metric are PetSmart and Home Depot. Note that I look at the past few quarters of growth as well as EPS growth going forward as predicted by analysts. Both of these companies may be facing tough compares in the quarters ahead. See the tables below. Growth rate is one of those numbers that can vary quite a bit depending on how you want to calculate it. I estimate that the PE is 1 times the growth rate, making these companies cheap.

Regarding Williams Sonoma, which announces on Wednesday, Jim said:

“We also get results from Williams-Sonoma, which I think it fits into this pattern of home improvement winners. That said, the stock often trades down when it reports, not unlike Restoration Hardware, but then comes back with a vengeance a few days later. So maybe we wait until it comes down and then we do some buying. I don’t think things will be different”

I’d like to challenge this is a bit by referencing the data on earningsBounce.com. While the pattern Jim references has occurred, I don’t think it is consistent enough to say that – these two charts from recent WSM quarters show that the price can and has taken off after earnings.



From the technical analysis perspective, WSM has been in a downtrend/channel for about 4 months now, but recently looks as if it might break out. This kind of chart makes me nervous – a bad report could send the price back to 52/53 in a heart beat. I have to agree with Jim Cramer’s approach and wait for a sell off in this one were I to want to establish a position. I’m a little cautious on the company in general, given the rather ugly predictions for the company 2 quarters into the future. See the QoQ growth chart below.
WSM

Source: QoQ Charts
Finally, let’s look at SalesForce.com (CRM). Jim mentioned they have a big conference coming up and I’m sure that’ll generate buzz. The trick to analyzing SalesForce.com is that it has very little earnings, choosing to invest nearly all of its profits into sales growth, so you really cannot look at EPS growth at all. Revenue growth is so high for this company that traditional valuation metrics are really just invalid. CRM is simply a growth company that will continue to soar in price as long as it maintains the top line growth. Also, the stock has a great ‘story’ being a company that is transforming the industry and whatnot. Look how consistent the blue line is below:

Source: QoQ Charts
Though the growth for SalesForce is amazing, if you would like to enter the stock, I’d wait. Like any other stock it has consistent pull backs. That is the time to enter.

 

Stock PE Price/Sales Div Yield (Trailing Annual) Volatility
BBY N/A 0.3 1.6% 0.32
CRM N/A 9.8 N/A 0.27
HD 23.37 1.4 1.8% 0.16
DKS 21.31 1.2 0.9% 0.18
JCP N/A 0.2 N/A 0.77
SPLS N/A 0.4 3% 0.23
WSM 20.73 1.3 2% 0.18
ADT 23.73 2.8 1.2% 0.2
ANF 11.65 0.6 2.2% 0.43
DLTR 21.13 1.7 N/A 0.15
GME N/A 0.8 1.9% 0.3
TGT 16.07 0.6 2.3% 0.16
FL 13.7 0.9 2.1% 0.2
PETM 19.01 1.1 0.9% 0.17
Stock EPS Qtr. On Qtr. Growth Rev Qtr. On Qtr. Growth
BBY 1825%   8/2013
N/A   5/2013
N/A   11/2012
N/A   8/2012
-11.8%   8/2013
-19.2%   5/2013
N/A   11/2012
N/A   8/2012
CRM N/A   8/2013
N/A   5/2013
N/A   2/2013
N/A   11/2012
30.8%   8/2013
28.3%   5/2013
32.1%   2/2013
34.9%   11/2012
HD 22.8%   8/2013
22.1%   5/2013
35.8%   2/2013
5%   11/2012
9.5%   8/2013
7.4%   5/2013
14%   2/2013
4.6%   11/2012
DKS 55.8%   8/2013
15.6%   5/2013
16.7%   3/2013
21.2%   11/2012
6.5%   8/2013
4.1%   5/2013
12%   3/2013
11.2%   11/2012
JCP N/A   8/2013
N/A   5/2013
N/A   2/2013
N/A   11/2012
-11.9%   8/2013
-16.4%   5/2013
-28.4%   2/2013
-26.6%   11/2012
SPLS -11.1%   8/2013
-3.7%   5/2013
-71%   3/2013
N/A   11/2012
-2.2%   8/2013
-3.5%   5/2013
3%   3/2013
-2%   11/2012
WSM 14%   8/2013
33.3%   5/2013
15.1%   3/2013
19.5%   11/2012
12.3%   8/2013
8.6%   5/2013
10.9%   3/2013
8.9%   11/2012
ADT N/A   7/2013
N/A   5/2013
N/A   1/2013
N/A   11/2012
N/A   7/2013
N/A   5/2013
N/A   1/2013
N/A   11/2012
ANF -30%   8/2013
N/A   5/2013
346.1%   2/2013
52.6%   11/2012
-0.6%   8/2013
-9%   5/2013
10.5%   2/2013
8.7%   11/2012
DLTR 9.8%   8/2013
18%   5/2013
25.8%   2/2013
58.1%   11/2012
8.8%   8/2013
8.2%   5/2013
15.4%   2/2013
7.7%   11/2012
GME -43.8%   8/2013
-14.8%   5/2013
72.1%   3/2013
N/A   11/2012
-10.7%   8/2013
-6.8%   5/2013
-0.5%   3/2013
-8.9%   11/2012
TGT -10.4%   8/2013
-26%   5/2013
0.8%   2/2013
17.1%   11/2012
2%   8/2013
-0.9%   5/2013
6.8%   2/2013
3.2%   11/2012
FL 12.8%   8/2013
8.4%   5/2013
27.7%   3/2013
60.5%   11/2012
6.4%   8/2013
3.8%   5/2013
14%   3/2013
9.3%   11/2012
PETM 25.4%   8/2013
15.3%   5/2013
37.1%   3/2013
50%   11/2012
5.3%   8/2013
5%   5/2013
14.7%   3/2013
8.8%   11/2012

 

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Stock Current Qtr
EPS Growth
Forecast
Next Qtr
EPS Growth
Forecast
Current Qtr
Rev Growth
Forecast
Next Qtr
Rev Growth
Forecast
BBY N/A
N/A
N/A
N/A
N/A
N/A
-11.2% ( High )
-12.9% ( Ave. )
-15.1% ( Low )
N/A
N/A
N/A
CRM N/A
N/A
N/A
N/A
N/A
N/A
35.7% ( High )
34.4% ( Ave. )
33.2% ( Low )
40.2% ( High )
34.2% ( Ave. )
31.8% ( Low )
HD 50.8% ( High )
41.3% ( Ave. )
36.5% ( Low )
18.4% ( High )
6.7% ( Ave. )
-2% ( Low )
7.3% ( High )
5.7% ( Ave. )
3.9% ( Low )
6.1% ( High )
-2.1% ( Ave. )
-4.9% ( Low )
DKS 0% ( High )
-2.5% ( Ave. )
-7.5% ( Low )
6.2% ( High )
3.3% ( Ave. )
1.4% ( Low )
6.7% ( High )
4.4% ( Ave. )
2.1% ( Low )
9.1% ( High )
3.6% ( Ave. )
0.3% ( Low )
JCP N/A
N/A
N/A
N/A
N/A
N/A
3.2% ( High )
-4.3% ( Ave. )
-6% ( Low )
6.6% ( High )
0.4% ( Ave. )
-6.3% ( Low )
SPLS N/A
N/A
N/A
253.8% ( High )
237% ( Ave. )
203.3% ( Low )
-1.6% ( High )
-2.7% ( Ave. )
-3.8% ( Low )
-6.2% ( High )
-7.9% ( Ave. )
-9.7% ( Low )
WSM 18.4% ( High )
12.2% ( Ave. )
8.2% ( Low )
6.5% ( High )
2% ( Ave. )
-1% ( Low )
11.2% ( High )
10.1% ( Ave. )
8% ( Low )
4.6% ( High )
2.4% ( Ave. )
0.3% ( Low )
ADT 20.5% ( High )
15.5% ( Ave. )
5.4% ( Low )
13.6% ( High )
4.5% ( Ave. )
-6.8% ( Low )
4.1% ( High )
3.7% ( Ave. )
2.9% ( Low )
5.4% ( High )
5% ( Ave. )
4.6% ( Low )
ANF -42.5% ( High )
-48.3% ( Ave. )
-52.9% ( Low )
-24.4% ( High )
-46.3% ( Ave. )
-52.3% ( Low )
-1.7% ( High )
-9.4% ( Ave. )
-14.5% ( Low )
-4.7% ( High )
-11.5% ( Ave. )
-16.3% ( Low )
DLTR -7.4% ( High )
-11.8% ( Ave. )
-14.7% ( Low )
21.4% ( High )
9.5% ( Ave. )
4.5% ( Low )
12.2% ( High )
11% ( Ave. )
9.3% ( Low )
5.5% ( High )
3.3% ( Ave. )
2% ( Low )
GME N/A
N/A
N/A
5.3% ( High )
-1.1% ( Ave. )
-8.5% ( Low )
16.2% ( High )
11.7% ( Ave. )
7.2% ( Low )
10.9% ( High )
2.8% ( Ave. )
-5.7% ( Low )
TGT -27.1% ( High )
-34.4% ( Ave. )
-39.6% ( Low )
7.2% ( High )
-1% ( Ave. )
-9.2% ( Low )
4.4% ( High )
2.6% ( Ave. )
0.6% ( Low )
0.7% ( High )
-1.3% ( Ave. )
-3.7% ( Low )
FL 0% ( High )
-4.3% ( Ave. )
-10.1% ( Low )
22.9% ( High )
11.1% ( Ave. )
-0.8% ( Low )
6.3% ( High )
3.7% ( Ave. )
1% ( Low )
5.7% ( High )
1% ( Ave. )
-2.5% ( Low )
PETM 17.3% ( High )
14.7% ( Ave. )
10.7% ( Low )
3.2% ( High )
0% ( Ave. )
-4% ( Low )
6.7% ( High )
4.3% ( Ave. )
3.7% ( Low )
0.1% ( High )
-1.5% ( Ave. )
-3.1% ( Low )