The Detroit-based bank is on the verge of becoming a powerhouse in the Midwest once its deal for TCF Financial closes in the second half of the year, and analysts are anticipating that it will be a boost on the company’s earnings, he said.
After climbing high off the announcement in January, the stock tumbled in March, along with other banks, as long-term interest rates fell, Cramer said.
He took a deeper look at the stock after a viewer asked for his opinion on the firm in January.
“Of course, all the bank stocks are cheap here, but unlike the rest of the industry, Chemical Financial actually has a catalyst, thanks to the upcoming TCF merger, which should create an enormous amount of value,” the “Mad Money” host said.
The security has rebounded in recent weeks and trades at a slight premium to its tangible book value, which is the the company’s value if it were to be liquidated, Cramer said. It sells for 9-times next year’s earnings estimates, he added.
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The March employment report was good enough to dim worries about a recession and not rattle the Federal Reserve, Cramer said.
“The Labor Department’s nonfarm payrolls report gave you some goldilocks numbers, alright, with just the right amount of job growth and just the right amount of wage inflation, meaning robust and meager respectively,” the he said.
The U.S. economy added 196,000 jobs, topping estimates for 175,000, and unemployment maintained a 3.8% rate. The number was a rebound from February’s abysmal 20,000 addition to nonfarm payrolls.
Wage growth, however, eased a bit, increasing just 0.14%.
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Burlington Stores could be the next retailer to rebound, Cramer said.
The stock was crushed, plunging 16%, after a rare sales miss in its most recent earnings results. Cramer pointed out that the March report marked the first time in 24-consecutive quarters that same-store-sales growth did not meet estimates.
“I think you should buy this stock ahead of … Wednesday, when I expect everyone to hear that Burlington’s issues have been cleared up,” the host said.
Burlington’s “mea culpa was overdone” on the earnings call, Cramer said. He compared Burlington to Home Depot, the shares of which also plummeted after disappointing fourth-quarter earnings and sales.
Tradeweb, which is backed by Blackstone and a collection of big banks, opened on the Nasdaq at more than $34 after a $27 initial price offering, a deal that Cramer said was “massively oversubscribed,” and closed at less than $37 on Friday.
Although shares of Tradeweb are selling for roughly 31-times 2019 earnings estimates, MarketAxess, another electronic trading platform for bonds, is trading for 50-times earnings, he said.
“That makes Tradeweb seem like a bargain, especially when you consider that Tradeweb actually has a faster growth rate” than MarketAxess, the “Mad Money” host said.
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Alder BioPharmaceuticals is developing a migraine drug that could hit the market in early 2020, pending FDA approval.
“I don’t think people have a really good understanding of what it means to have chronic migraine … we’re really focused on that particular education,” CEO Robert Azelby told Cramer. “At the end of the day, I think we can do a whole lot of justice to making sure we’re educating on exactly the battle that these migraine patients are going through.”
The stock has been a tough one to own, Cramer said, but he wonders if things could change now that the company has new management.
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In Cramer’s lighting round, the “Mad Money” host zips through his responses to callers’ questions about stocks.
Diplomat Pharmacy Inc.: “I don’t like the specialty pharmaceutical companies and I’ve been right not to like them. I’m sticking by that view.”
People’s United Financial Inc.: “Candidly, I’ve like it for a very long time and it’s done nothing for a very long time, so it’s very difficult for me to recommend.”
TG Therapeutics Inc.: “It’s a very good — this is [CEO] Mike Weiss … We said it was a very good speculative play and it remains a very good speculative play and, you know what, that’s all I can say about it.
Disclaimer: Cramer’s charitable trust owns shares of Home Depot.
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