Cramer: Trust is a hard game to play
Jim Cramer | firstname.lastname@example.org
Do you trust Norfolk Southern with great volumes in chemicals, oil, wood, and automotive, with some possible turn in coal? Or do you trust UPS, which talked about business falling off a cliff?
Do you trust Riverbed, Broadcom, and Altera, all talking about increased telecom and wireless spending, or do you fret about Apple? Do you buy into Buffalo Wild Wings' sudden decline in growth or do you bank with Panera and Domino's?
How hard is this game? I think we have some winners over losers and some cyclical trends that only some are playing in.
NSC was terrific because it had enough business to augment a decline in coal--a decline, by the way, that will end if the heat keeps up. Automotive was terrific. Anything housing-related was amazing. The Bakken and the Marcellus are generating tremendous demand for shipping oil and oily liquids to refineries.
UPS? Major moves into Europe and Asia simply aren't paying off.
Domino's? Great franchise model and raw costs are actually going down while they are going up for Buffalo Wild Wings. When commodity prices go down, just call it a win. When they double like they did for BWLD, you have a loss.
The telecom story seems like it's about who has the right products for a 4G build-out and who is in the sweet spot with the telco companies that simply must spend. I believe them.
Also, while the relative number for Apple and its iPhones may have not been huge, the build-out for the iPhone 5 and the new Samsung phones plus the iPad is simply not stopping. So these companies did well, plus Broadcom's got some terrific set-top box business going.
I often wonder if Cisco is seeing so much commoditizing that it will keep going lower, though a part of Broadcom does well if Cisco does well. Hewlett-Packard, not that long ago, was going into networking. I think HPQ is going away. It is the J.C. Penney of tech.
Perhaps the best analogue of the moment came yesterday from Whirlpool, which missed the quarter. Europe was weak. Brazil was terrible. But the U.S. market was strong. Housing is coming back. U.S. automotive is coming back. Oil is back. Chemicals are back.
It's just that those are all bad in Europe and some bad in Asia, and those two now offset whatever we've got going--which is why the confusion, right now, is so palpable.
Random musings: You can always make it easy on yourself. Eli Lilly boosted its forecast even as Zyprexa is diminishing, now that it is off patent. Regeneron remains the single-best-growth pharma story off that amazing Eyelea number.
Disclosures: Cramer's charitable trust is long AAPL and BRCM.