As stock markets rebounded from a selloff in the previous weekly session, Jim Cramer was slightly more bearish on the stocks he covered. Of the 49 companies mentioned on the week of April 22, 2013, Cramer was bearish on 11 (or 22% of them). Granted, a number of bearish calls belonged to companies in the resource sector. This included Exxon Mobil (XOM), Golar LNG (GLNG) and Apache (APA). In the technology sector, which rose 2.64% for the week on an equal-weighted basis, Cramer was bullish on the broadly-owned companies:
4 of the companies warrant further analysis.
Microsoft (MSFT) surged from $29 to $31.79 in the last several sessions. Investors bid shares higher after the company reported strong quarterly results that allayed fears of weak PC sales. Intel (INTC) also rose 4.28% for the week. Intel is launching its Haswell CPU on June 2013. The high-end processors will be shipped first, followed by less expensive CPUs in the third quarter. The low-end Haswell processors will be made for the H81 motherboard chipset.
Microsoft is leveraging its balance sheet by raising $2.7 billion in debt-financing. The company will not have high interest payments to worry about. Debt will cost just 1.01% on a 5-year term.
In the tablet space, Microsoft is estimated to be having 7.4% of the market with its Surface RT and Windows 8-based units. This would translate to 3 million units. Apple still commands the market with 48.2% of the market, according to Strategy Analytics.
In the console space, Microsoft may unveil the new Xbox successor on May 21, 2013. This could be another reason why shares are rising: investors are bidding shares up ahead of the release.
Cramer was still bullish on Facebook (FB). Shares peaked at around $32 in January, 2013, and closed at $26.85 with a market capitalization of nearly $64 billion. The company is scheduled to report earnings on May 1, 2013. As Facebook pushes more ads to desktop users on the news feed, growth will ultimately demand on the mobile pages. Facebook recently announced “Home” on Android, and also wants to have the app available for Microsoft and Apple devices.
To gain relevance in pitching local ads, Facebook is building more support for local searches for Graph Search. Graph Search was rolled out recently. Merrill Lynch thinks ads from Graph Search could generate $500 million per year.
In the video content space, Cramer was bullish on Netflix (NFLX). Netflix rose 32% for the week after reporting quarterly results. On April 25, the company said in its letter to shareholders that it plans to raise capital, which is needed to fund the cost of producing original programming. Netflix already spends $2 billion a year on programming. Moody’s believes the debt for Netflix is positioned to be in the Ba3 rating category.
Written by Chris Lau