Cramer's Mad Money - Salesforce Is The Facebook For Enterprise (5/17/12)
Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday May 17.
CEO Interview: Marc Benioff, Salesforce.com (CRM). Other stocks mentioned: Facebook (FB), Vodafone (VOD)
Cramer called Salesforce.com (CRM) the "Facebook for Enterprise," and it has the best growth of any tech stock. The company reported a quarter that beat numbers on every metric, with a 38% increase in revenue and operating cash flow up 53% year over year. While Europe seems to be the root of many companies' evils, CEO Marc Benioff said that business was strong in Europe, particularly the U.K. where it completed a deal with the Royal Mail post office and Vodafone (VOD). Japan was also strong. Salesforce.com is a revolutionary tech company that pioneered cloud computing. Benioff discussed another revolutionary company, Facebook, and believes there is very strong fundamental growth ahead for FB; "We've never had an application like this. It is unprecedented...Facebook has the kind of fundamental growth that we have never seen before."
Cramer is bullish on Salesforce.com.
With oil and commodities prices falling, the retail and restaurant sectors may see an upside. Cramer looked at two donut and coffee companies, Dunkin' Brands (DNKN) and Tim Hortons (THI). While DNKN has many more stores, and seems in danger of saturation at first glance, the company is still a regional moving to national story, and can double or triple its stores in many areas of the country without fear of saturation; in fact, DNKN has only just recently put up its first store in California. Tim Hortons (THI) has 80% market share in Canada, but is expanding because it desperately needs to. It doesn't have the kind of brand recognition that Dunkin' has, and it might have a hard time competing with DNKN in the U.S. and overseas. DNKN recently delivered a 2 cent earnings beat on higher than expected revenues and raised guidance. Its same store sales increased 4.5%, and the stock has seen a 65% gain since it went public last year. While Tim Hortons' same store sales were much higher, at 8.5%, the company missed earnings by 3 cents and has been hurt by slowing traffic in Canada. DNKN trades at a multiple of 22, higher than THI's 17, but DNKN has a growth rate of 16% compared to 12% for THI. Cramer declared DNKN the winner of the coffee wars.
Eli Lilly (LLY)
Eli Lilly (LLY) is about to fall off a patent cliff, since it is losing an anti-psychotic drug that generates $5 billion for the company. The company also has an anti-depressant drug that is going off-patent next year. So why is the stock moving up and only a few points off its 52 week high? The patent expirations are baked into the stock, and LLY has a 4.8% dividend, a healthy balance sheet and a strong pipeline. While Europe makes up 23% of sales, it is not likely patients will stop taking necessary medication during hard economic times. Two major catalysts for the company are the upcoming conferences on oncology and diabetes, during which LLY should discuss relevant drugs it has in its pipeline. While LLY might not see a huge gain quickly, it is a low risk stock with a strong pipeline.
Culled from Seekingalpha.com
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