Connect with us

Stocks

Cramer introduces the ‘cloud kings,’ tech’s hottest new stock group

Published

on


Since CNBC’s Jim Cramer is in San Francisco this week, he wanted to go over a new stock group in technology space that’s just refusing to quit.

“I’m calling them ‘the cloud kings,’ the seven software companies that are transforming the way their customers do business,” the “Mad Money” host said on Monday. “I’ve been telling you about the cloud revolution for years now, … but the truth is it’s still in its early stages, which is why I still like the seven kings of the cloud: Adobe, Salesforce.com, ServiceNow, Red Hat, VMware, Splunk and Workday.”

In addition to their cutting-edge tech, these companies’ stocks have been wildly strong performers, Cramer said. Shares of all seven have rebounded between 17 and 30 percent since the market’s Feb. 9 lows.

Here are their one-year gains:

“In many cases, their stocks are indeed expensive up here. The kings come at a cost,” Cramer acknowledged. “Regular viewers know I do hate to chase. But on the rare occasions when these names give you a dip, they have been fabulous outright buys.”

To convince investors why macro-economic or geopolitical worries shouldn’t weigh on this part of the cloud, Cramer went over each cloud king’s track record and explained what made it a worthy buy.

He began with Adobe, the design-oriented software giant making strides in various artificial intelligence and cloud-based applications.

“When it comes to digital media and marketing software, Adobe is in a league of its own,” the “Mad Money” host said. “This company has a terrific long-term track record, but the stock really took off a couple of years ago after Adobe began to transition from an old-school, on-premises software company to a modern, cloud-based, software-as-a-service business.”

Adobe’s transformation to charging its customers on a subscription basis has “turbocharged” its earnings growth, Cramer said.

He hoped that the company’s Thursday report would miss on a minor line item so that investors could buy into the stock, which hit a new all-time high on Monday, at a lower level.

Next, Cramer turned to Salesforce, which he called “the king of the cloud.” The company helps enterprises better understand their customers with a range of tools spanning marketing, e-commerce, community management, analytics, application development and professional cloud services.

With its latest quarter, Salesforce became the fastest enterprise software company to hit a $12 billion annual revenue run rate, seeing double-digit sales and unbilled deferred revenue growth.

“I wouldn’t be surprised if the future looks just as bright now that Salesforce is using artificial intelligence to better predict consumer behavior,” Cramer said, referencing the company’s Einstein tech. But, he warned, “the stock has run dramatically and I’d like it a heck of a lot more on a pullback.”

Cloud king No. 3, ServiceNow, focuses largely on efficiency, helping companies build applications that reduce labor costs by automating jobs in areas like human resources, legal, finance, security and facilities management. In its latest quarter, ServiceNow’s subscription revenue grew by 44 percent.

“Right now, the company gets a ton of credit for its IT services division, but I think the rest of ServiceNow, all the auxiliary businesses that involve automating back-office jobs, is the real future of the company,” Cramer predicted. “However, this is another one that just made a record high today, so please be patient. Put it on your shopping list. Wait for a better entry point.”

Red Hat, the fourth on Cramer’s list, is the top open-source enterprise software provider in the world, assisting companies in their transitions to the cloud.

Recently, Red Hat has started helping enterprises build out their own private cloud networks, which offer faster, more secure access to their information.

“The growth has really taken off since they made this move,” the “Mad Money” host said. “Red Hat reports in two weeks and Wall Street has a history of misunderstanding this company’s results, causing the stock to get hit. It got hit really badly last time. Let’s hope that happens again. These dips have made for excellent buying opportunities.”

In an aside, Cramer said that he would anoint VMware, another cloud onboarding play, to his list of cloud kings if the company wasn’t publicly involved in deal talks with Dell.

The last two cloud kings were “phenomenal growers” Splunk and Workday. Splunk helps companies analyze and use their data in the best way possible, while Workday, like ServiceNow, focuses on making human resources and finance departments more efficient.

“The bottom line? When you identify a powerful theme that’s revolutionizing the way we do business, find the biggest winners, wait for a good entry point and then hang on for the ride,” Cramer said. “Adobe, Salesforce.com [with CEO] Marc Benioff, ServiceNow, Red Hat, VMWare, a little convoluted ownership structure there, Splunk and Workday — they are the kings of the cloud and they all belong on your stock market shopping list.”



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Stocks

What the hell happened at General Electric?

Published

on

By


Few corporate meltdowns have been as swift and dramatic as General Electric’s over the past 18 months – but the problems started long before that.


From Fortune:

It’s a bad day for a CEO when he announces he’s retiring and the stock goes up. That was Jeff Immelt’s day on June 12, 2017. The news of his departure was in one sense no surprise – some investors and analysts had been urging his ouster for years – but it was also a shock.

He’d been General Electric’s CEO for almost 16 years, and outsiders were unaware of any specific succession plans or that ­Immelt, at age 61, had any intention of stepping down. Suddenly they were told that in just seven weeks he’d be gone as CEO (he remained nonexecutive board chairman an additional two months), to be succeeded by John Flannery, head of GE’s health care business and a 30-year employee. Investors didn’t need long to decide this was good news. The market was flat that day, but they bid GE stock up 4%.

Their optimism was at best premature. The stock closed at $28.94 on June 12 and has not reached that price since. As economies boomed worldwide and U.S. stock indexes soared, GE has collapsed in a meltdown that has destroyed well over $100 billion of shareholder wealth. Pounded by a nonstop barrage of bad news, investors are traumatized and disoriented. “They just can’t figure it out and don’t want to invest,” says analyst Nicholas Heymann of William Blair & Co. “This isn’t like surveying the landscape. It’s spelunking with no lights and no manual.” Analyst Scott Davis of Melius Research says some investors have become permanently disillusioned: “Many have told us they will never own GE again.”

undefined

Retirees and employees who bought heavily into the stock are furious; some picketed GE’s annual meeting in April. Former executives are dumbfounded. “It’s unfathomable,” says one. “You couldn’t possibly dream this up. It’s crazy.” After all, this is GE, a corporate aristocrat, an original Dow component, the world’s most celebrated management academy, now revealed as a financial quagmire with a deeply uncertain future. Its bonds, rated triple-A when Immelt became chief, are now rated five tiers lower at A2 and trade at prices more consistent with a Baa rating, one notch above junk.

In response to this debacle, GE has repudiated its previous leadership with a zeal unprecedented in a company of its size and stature. Gone in the past 10 months are the CEO, the CFO (who was also a vice chair), two of the three other vice chairs, the head of the largest business, various other executives—and half the board of directors. The radical board shake-up “could be one of the most seminal events in the history of U.S. corporate governance,” says a longtime vendor and close student of GE.

undefined

Immelt (left) and Flannery announcing the succession. Flannery would soon replace much of Immelt’s top team and strategy. Courtesy of General Electric.

Immelt declined to be interviewed for this article but sent Fortune a statement in which he cited accomplishments and said, “None of us like where the stock is today. I purchased $8 million of stock in my last year as CEO because I believe in the GE team. I love the company, and I urge them to start looking forward and win in the markets.”

Flannery’s strongest message is how completely he’s breaking with GE’s recent past. “The review of the company has been, and continues to be, exhaustive,” he told investors last October. Specifically: “We are evaluating our businesses, processes, [the] corporate [function], our culture, how decisions are made, how we think about goals and accountability, how we incentivize people, how we prioritize investments in the segments …  global research, digital, and additive [manufacturing]. We have also reviewed our operating processes, our team, capital allocation, and how we communicate to investors. Everything is on the table …  Things will not stay the same at GE.”

Inescapable conclusion: This place is an unholy mess.

Continue reading at GE…


×
Subscribe to Crux



Source link

Continue Reading

Stocks

Investors have completely given up on this commodity

Published

on

By


From Steve Sjuggerud, Editor, True Wealth Systems:

It’s been beaten down, left for dead, and just forgotten.

When an asset underperforms for multiple years, investors tend to give up on it. They get burned and move on… at least for a while.

Today, we are looking at a commodity in that exact situation.

It’s down 44% since peaking in 2014. Investors want nothing to do with it… But history says a triple-digit jump is possible thanks to this extreme negative sentiment.

Here are the details…

When you think about commodities, you probably think of oil and gold… maybe even crops like corn and wheat.

Today’s commodity is a bit more obscure. It’s probably off your radar. Honestly, it’s probably off everyone’s radar.

We’re talking about hogs.

You see, hog prices have fallen dramatically over the past three years. The commodity is down 44% since peaking in 2014. And not surprisingly, investors want nothing to do with it.

It only takes a quick glance at the Commitment of Traders (COT) report for hogs to see this extreme sentiment.

The COT report is a real-time indicator that shows what futures traders are doing with their money. It’s a great investment tool. It shows us contrarian bets when futures traders all agree on an outcome.

When futures traders are all making the same bet, the opposite is likely to occur. Right now, futures traders are all betting on lower hog prices. Take a look…

undefined

Their bets have only been this extreme a few times over the past decade.

We saw similar extremes in 2009, 2012, and 2015. Each extreme lead to dramatically higher hog prices in the following months…

From August 2009 through April 2011, the commodity jumped 134%. Then another similar setup happened in mid-2012. Hog prices bottomed shortly after and then rallied 85% in less than two years.

In mid-2015, investors gave up on hog prices again… right before the commodity soared 70% in less than a year.

These are incredible returns. But it’s what can happen when investors completely give up on an asset. Today, futures traders have given up on hogs once again.

One way to take advantage of this is through the iPath Bloomberg Livestock Subindex Total Return ETN (COWTF). The fund tracks the Bloomberg Livestock Subindex Total Return Index. Its main focus is on hog and cattle futures.

We aren’t officially recommending COWTF today. The uptrend simply isn’t strong enough. But this is a fantastic long-term setup. And when the uptrend returns, hog prices could potentially see triple-digit gains.

Crux note: Steve’s trading strategies cover every corner of the market – more than 40 different sectors – so readers will always have the opportunity to make money somewhere… even in hogs.

And only Steve’s True Wealth Systems subscribers can get immediate access to the team’s weekly Review of Market Extremes.

For more details, click here.


×
Subscribe to Crux



Source link

Continue Reading

Stocks

Cramer’s charts suggest investors buy Akamai and sell Walmart

Published

on

By


In an emotional market where investors struggle to process the White House newsflow, CNBC’s Jim Cramer likes to fall back on the technicals to find actionable opportunities.

“In the stock market, emotional decisions tend to be bad decisions,” the “Mad Money” host warned. “So we need to do everything we can to check our emotions at the door. And that’s why, every week, we like to play off the charts.”

For Wednesday’s charts, Cramer turned to technician Marc Chaikin, the founder and CEO of Chaikin Analytics and the inventor of key technical tools like the accumulation-distribution line, the Chaikin volume indicator, the Chaikin oscillator and the Chaikin Money Flow.

Three weeks ago, Chaikin recommended three stocks on “Mad Money” based on his formula for finding winners and losers: Marathon Petroleum, EOG Resources and General Electric.

Since then, Marathon and EOG have gained 8.2 percent and 4.6 percent, respectively, and GE was up 9 percent as of Tuesday before its CEO gave a poorly received presentation.

“Two out of three ain’t bad, and if you’d taken profits on GE yesterday, you would’ve had a phenomenal trade,” Cramer said.

Chaikin’s formula uses three key indicators: the Chaikin Money Flow, which measures buying and selling pressure in a stock; the Chaikin Relative Strength, which compares a stock’s performance with the S&P 500’s over the last six months; and the Chaikin Power Gauge, which uses 20 different fundamental and technical inputs to produce a bearish or bullish reading.

This time around, Chaikin’s formula flashed particularly bullish signals with the daily stock chart of Akamai Technologies, a cloud play that helps companies get content like streamed video online securely and glitch-free.

Shares of Akamai have been soaring since activist fund Elliott Management said it took a 6.5 percent stake in the company last December, but Chaikin’s three indicators showed more room to run.

The Chaikin Money Flow turned positive, meaning that institutional investors were buying the stock, the Chaikin Relative Strength has been strong for months, and the Chaikin Power Gauge is sending green bullish signals.

Still, the technician warned that the stock is very overbought, suggesting that investors wait for a pullback to the $72 to $74 level before picking up some shares.

“My view? I like Akamai here — we recommended it at $73 in mid-March — but I’d like it even more into weakness because I believe in Elliott Management’s ability to take this business to the next level,” Cramer said.

Chaikin’s formula can also signal when a stock should be sold. On Wednesday, Chaikin zoomed in on the stock of Walmart, down over 4 percent since the company’s earnings report.

Having spent months in the red, the Chaikin Money Flow inched up after the report, but is still flat, Cramer said. The Chaikin Relative Strength indicator is also negative, reinforcing the stock’s decline. Unsurprisingly, the Chaikin Power Gauge is flashing bearish signs, too, he added.

“My view? I like Walmart long term, but Chaikin may be right about the short term,” Cramer said. “Wall Street really dislikes the fact that the company’s spending so much money to grow its business, including that acquisition of Flipkart, the Indian e-commerce play. I think these bets are ultimately going to pay off, but it could take time.”

“Bottom line? The charts, as interpreted by Mark Chaikin, suggest that you should buy Akamai here and sell Walmart,” the “Mad Money” host concluded. “Given his track record, I think you need to take his advice very seriously, especially on the stock of Akamai.”



Source link

Continue Reading

Trending

Copyright © 2017 Zox News Theme. Theme by MVP Themes, powered by WordPress.