Today, Jim Cramer - Mad Money and Stockchase Insights commented about whether TGH-X, PXT-T, MRC-T, OSK-N, FIVN-Q, EMR-N, ELF-N, DECK-N, EA-Q, ON-Q, STZ-N, PCG-N, EIX-N, SBUX-Q, FFIV-Q, GE-N, CVS-N, VST-N, CEG-Q, BLK-N, GS-N, ORCL-N are stocks to buy or sell.
Up 22% last month. Delivered blow-out earnings and issued a strong forecast, raised their dividend by 30% and started a $7 billion buyback. It has been climbing, supported by steadily improving numbers, which he expects to continue. The CEO is doing a great turnaround job.
They just reported Q3: the largest and most profitable in history, beating sales, all-time high gross margins of 60%, and a strong EPS beat. Their brands did well, like Hoka up 23.7%. But then management gave a disappointing forecast for this quarter only 1% revenue growth (11% previously) with Ugg sales to decline and earnings -55% YOY. The strong momentum they had will end, disappointing the street. The stock was priced for perfection. Problem was that Ugg sold so well over holidays that this brand is now sold out. Also, Hoka's growth is slowing; Hoka is a big reason why people own these shares, but such growth expectations are too high. Sales of Hoka should normalize after they restock. Plus, the company has several big launches coming, and have $2.2 billion in cash and zero debt.
Certainly at 5X earnings MRC can be considered cheap. Shares are very tightly held with 74% held by a connected group. The dividend is fairly low and shares have not done much, so it is not our favourite, as we do prefer more growth. But we would consider it OK. There is always a chance of a privatization but not something we would count on and would not buy just on that possibility. Net asset value requires lots of estimates and can be a moving target. The last comment from the company on a conference call indicated $340/share as NAV. Note this would be pre-tax.
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Shocking that it rallied 25.8% in January, since it was spiralling last year, down 43%. There's no clear catalyst for their rally, though it helped that Medicare payments would increase from 2025 to 2026. He's waiting for their report next Wednesday before deciding.