2 growth stocks restore market's faith

Bucking the naysayers, Chipotle and Salesforce come up aces.

By Jim Cramer Nov 23, 2012 9:54AM
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Nicholas Monu iStock Exclusive Getty ImagesHigh-multiple heaven! Thank you, Chipotle Mexican Grill (CMG), with your accelerated share repurchasing showing how cheap you really are. Thank you, Salesforce.com (CRM), for delivering a quarter that is led by strength in Germany and France!

 

Sometimes we can't remember why we like growth stocks. Sometimes because it has been hellish, frankly, ever since Chipotle dropped 100 points in a day. Now it seems to have stabilized, and that can lead one to the conclusion that another part of the bear -- the relentless compression of the high-multiple plays -- may be running its course.

 

I was stunned Tuesday night when Salesforce.com reported because I expected some hair on its quarterly results, between the tremendous efforts being made in Europe, at a time when that seems pretty dicey, and the impact Hurricane Sandy had on so many clients.

 

Wrong and wrong. The time spent getting big European clients that had no Salesforce.com software looks like a home run, and Sandy wasn't even a glancing blow.

 

What I liked best about the quarter was that CEO Marc Benioff, after being cryptic, at least to some, about how he gets to his phenomenal dash to $3 billion in revenue, now breaks out his numbers the way that the Securities and Exchange Commission will probably say serves as a model for difficult-to-gauge subscription accounting.

Benioff gives you a half-dozen totally open-kimono ways to judge things. It's as if he took every single critic from Herb Greenberg at CNBC to the Sanford Bernstein naysayer and said, OK, we have listened, and here are the numbers you are looking for, and it turns out they are pretty darned good. If you don't understand how to read them, go back to his September tutorial, which explains how to judge deferred revenue in a simple way.

 

It was an amazing quarter, and the acquisitions he has made, many good, some bad, are creating a brain-trust that is the envy of the software industry.

 

It's a buy.

 

Chipotle is a different story. Many believe that the company has lost its way or has been sliced up by the competition. I think it is entirely possible that the competition was sampled in the last few months, notably the higher-end Taco Bell offerings, but I bet they were found wanting, as Chipotle is more of an ethos than an eatery. It remains with the other two in the troika, Whole Foods (WFM) and Starbucks (SBUX), a total go-to name for high growth.

 

When you see these stocks rally, consider them the blood pressure and the tongue depressor that doctors use to measure health.

 

The patient looks OK today, still one more day when the key levels of the S&P 500 ($INX) are tested and, hopefully for the bulls, not found wanting.

 

jim cramer's face

 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long SBUX.

 

 

 

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21Comments
Nov 23, 2012 1:04PM
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As my Thanksgiving wish, i wish for all middleman stock markets to be ended and thus all of us would be able to buy all shares directly from any company that we think is running and growing their business best , and whose value would no longer be determined by greedy middleman profit games played for their benefit only. Those unneeded middlemen would no longer be a factor in any company's value, as that value would be totally determined by  a company's business  practices and performance, as it always should be.

Please?

Nov 23, 2012 12:02PM
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Don't you think a 100-point plus day between a national holiday and a Saturday is-- whoring? When does Wall Street get legitimate?

Close the banks. End the Fed. Get RID of Wall Street. It was Thanksgiving yesterday. It was a good day for you turkeys to snap out of it and return today to RECOVER jobs. If you can't do it, you can't be allowed to continue mooching off the rest of us. FIX IT, or ditch your profession-- pariah.

Nov 23, 2012 12:24PM
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When this fiscal cliff is fixed the market will just soar.Those that are on the sidelines will

really be bitter they weren`t in the market.

Nov 23, 2012 8:18PM
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No...V_L, much of it is my "vested retirement" and I plan on leaving some to charity and most to our children...I/we made wise choices and worked hard...

 

I encourage all to do that or the same thing to get ahead in life...

To set around and blame all others is a fruitless proposition, that I see no value in..

 

And I seriously don't buy the "fiscal cliff"...I believe we are in the "eleventh hour" and we will pull it out, along with recovering from our recession; But it  ain't gonna be easy..

And I would much rather be optimistic then a pessimist about the situation.

I will live longer that way...

Nov 25, 2012 7:42PM
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I guess I don't usually question, why someone or others might be Bearish about the Markets or Investing....That would probably only be leaving myself open to accusations of being Bullish or optimistic about Investing....Different strokes, different folks. Plus sometime I question if constant Bearish attitudes are really coming from true investors...Or just a doom&gloom ploy for conversational purposes.?

"The paying of Dividends isn't American"...Was kind of taken back by the statement; Maybe it was only meant to invoke conversation or debate ??....You are probably right..Not REALLY American, probably been going on for thousands of years?

You might say it is a REWARD for money/capital/PIK being loaned to a recipient....It encourages and maintains the flow of Capital/money or specie.

Otherwise there would be little if any reason to save at a Financial Institution or Invest in a person or Company's stock or business(products or services). 

As far as I know very few Companies give back all that is earned, compared to the dividend they pay.

Most have an EPS earnings per share, after all expenses....And pay out only a fraction of that to investors as a yield of good faith...Leaving money for further re-investment, upgrades and/or future un-forseen expenses...Many Corporations today are sitting on abnormal hoards of cash...To buy up competition or uncertain about demand in the upcoming business cycles, plus even some concerns about the NHCP..That and the Recession have caused many Corporations and Business' to hunker down...Causing that lack of cash flow and job creation...

Those that are raping the system; Evading taxes at all cost, are what I consider Un-American.

Nov 25, 2012 5:38PM
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— Egypt's stock market plunged on Sunday in its first day open since Islamist President Mohammed Morsi's seizure of new powers set off street violence and a political crisis, unraveling efforts to restore stability after last year's revolution. More than 500 people have been injured in protests since Friday, when Egyptians awoke to news Morsi had issued a decree temporarily widening his powers and shielding his decisions from judicial review. Morsi and the judiciary hinted at compromise to avert a full-scale political crisis. The Supreme Judicial Council said Morsi's decree should apply only to "sovereign matters." Although it did not specify what that meant, its statement, read on television, suggested it did not reject his decree outright. It called on judges and prosecutors who have called for a strike to return to work.Morsi's office repeated assurances that the measures would be temporary, and said he wanted dialogue with political groups. "This declaration is deemed necessary in order to hold accountable those responsible for corruption as well as other crimes during the previous regime and the transitional period," the presidency said in a statement.

 

Does anyone find it odd that an entire country can be collapsed by revolution last year but that the "exchange" is revived before anything else? Egypt has no economy due to stability, but the bankers are up and running? Really? They didn't recover ANY jobs, just their Stock trading and currency that didn't make it outside of banks! Is there a larger problem with paper pushers than the world realizes?

Nov 23, 2012 6:27PM
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'V_L.......We that invest and or in some cases trade; Will take 100+, 200+ point gains. anytime we can get them.'

Because you are beyond your family years and could care less that every increased point on the DOW is what is actually taking us over the Fiscal Cliff. We have no economy, just finance. Nothing can endure that. It makes me sad that you are older and sometimes wiser but still self-centered without regard to where you live. Wall Street cannot keep exchanging bad credit for investment fodder. At some point (now would be good), we have to...

Close the banks, end the Federal Reserve and get RID of unregulated investing or we die. The nation WILL DIE if we cannot restart an economy.
Nov 25, 2012 7:58AM
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"Are you always so bearish?I own rock solid stocks with great dividends because I believe in America,"

 

The paying of dividends isn't American. It hurts the economy because the giver doesn't use them to expand and hire, just control and manipulate. If you'd take a step back from the computer sceen, you'd see a sustained drop in Freedoms, Lives, Liberties and the Pursuits of Happiness. You cannot find any happiness in being greedy, no rich person is ever content where they are at, they will try for more even if it kills them (or us). Look at Mitt Romney- he is past retirement age and could have a wonderful one. Instead he made $25 million on investments last year and cheated on his taxes. He took opportunity away from 500 families (average household income of $50,000). Taking dividends is ANTI-AMERICAN. Consider them to be entitlements given by New World Order. They give you a penny, they take plenty more than a penny from our economy and way of life.

Nov 23, 2012 5:38PM
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Someone..Bobbobwhite....I pay my Middlemen $8 bucks for trades of $5,000- $50,000..Same no matter what.

They have assistance for probably 12-15 hours a day, advice and answer all questions that are concerning my investments and portfolios...Plus, sometimes they give me "free trades".

 

They supply more information and platforms then I can use....I also trade out of hours..

And send alerts/spreadsheets or tips to my home electronically or U.S. Mail.

And money transfers if I need them..

 

You just have to get on board, Buddy.....8 bucks..Nothing more PERIOD.

 

Nov 25, 2012 5:47PM
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Yes I also wish I had taken more then just Basic Economics..required in College; Advanced knowledge about Financial matters and Economics along with a Business background; May have helped my career, but I did fairly well anyway with guts and determination...

I was unsettled as a student, probably because neither of my parents had attended.

But at least I had some opportunities...

And our(my) Generation came along at an interesting time in our History...

Of course many Generations have or will say the same about their's.

Nov 25, 2012 5:05PM
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V_L ......Kinda agree about about a lack of education on Finances and Economics...

We or many should have had more opportunities in Highschool, then we did, without the droning on about dates and sometimes worthless information without meaning, that we may never use in everyday life....As far as Economics being tied to history and Historical events, pointing out what happened and why ?...Maybe I was half asleep those days or just had a boring instructor that couldn't tie it to our future lives..

As far as Finance....A lot of people needed to be taught how to balanced a checkbook, live with or within a budget and be able to understand banking or values of products in general..Many weren't.

Of course checkbooks are going by the wayside, but the premise is the same.

 

With Economies of Scale we have had more then just a couple upsides in our Past Century; What we did with them as a Nation is another story....

We were coming on to own with an Industrial Expansion pre-WW1, it carried through the 20s, until we once again had lived beyond our means, and Greed had overtaken our Banking system and the rest of us...

After WW2, after recovering from the Depression, we expanded once again to build a Middle Class, then after the Korean War....We went low once again...

After a lull; With Eisenhower we had one of the biggest infrastructure build-outs in History and the 60s seemed to provide plenty of jobs, education and opportunities for many...?

The downside was the Viet-Nam War,civil unrest and Civil Rights issues..

 

During the 70s we pretty much lost respect for our Government and Authority and we more or less have lived or died on many "bubbles" ever since...Reagan gave some hope for a few..And Clinton was the man from Hope...And until we hit our Recession in 2007-2008, things had been about average for most Americans, except the Rich...They had weathered most and all storms somewhat better and under questionable means...IMO.  

 

Nov 24, 2012 9:49AM
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"When this fiscal cliff is fixed the market will just soar. Those that are on the sidelines will

really be bitter they were not in the market."


Sadly, we lack genuine education regarding finance, economics and investing. An economy does not "take off" unless 40 million careers are restored, family-sustaining wages occur and potential for returning to an impoverished state is all but eliminated. You were likely raised in the anomaly period. That is, in the last quarter of the 20th Century we had momentum. It was never like that in any other period of the century. This is an attempt to surf a wave that already hit the shore. The UP period we realized since 1998 is purely inflate (ever heard the term- bubble?). It isn't real. During those 15 years, the sheer amount of currency in the world has increased more than ten-fold. It nearly all went into global investing markets, not global economies. The odds of ANY MORE lift is astronomical and even if lift continues, it promotes an even bigger bust period. Unless you are ignorant... this bubble continuance exists for only one reason-- so that those in their twilight years can die without seeing it burst. Luckily, they have total mesmerized with greed and lust idiots continuing it. Guess what? THEY will be dead. YOUR inheritance disappears and the BILL gets paid by YOU because you destroyed ME. NO one regrets not getting "in" a bubble. They only regret not using their time wisely and figuring out how to live without oodles of free or easy money. Cramer is a rube for presenting goofy false-front articles. We are also NOT going to have another fossil fuel boom. Without YOU getting a clue and redoing the infrastructure without gas reliance, you will walk to your foreign-owned corporate job for your pittance. Wake up and take action, the clock has already stopped ticking... the shift is in weeks. Don't believe me? PROVE ME WRONG WITH FACTS YOU CAN BACK UP.  

Nov 25, 2012 2:49PM
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Someone...(pocket mouse)..Called me a Libtroll...Very interesting coming from a racist Obama hater.

I really wonder who is the more "pathetic" (using his oft term)...?

Let me clue you in PP(that's cute).Your "pathetic"Congress are the ones that CONTROL SPENDING and are destroying America, with their Pledges and other "do nothing" attitude, until Obama is gone.

They will pay the price, as they should...

I guess you could try and "classify" me as a Liberal, but I lean towards being a Moderate, with Fiscally Conservative ideas..With a Liberal attitude about many other issues,none encompassing Religion.

I have voted for as many Republicans as I have Democrats...

But, I voted for Obumbles, because I got tired and bored of the Rhetoric used against him...And,

The Repubs, allowed and selected the worst Candidate possible in my voting life..Sweet Geezus. 

Nov 23, 2012 5:41PM
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V_L.......We that invest and or in some cases trade; Will take 100+, 200+ point gains. anytime we can get them.

 

Even on Chinese and Canadian Holidays...

 

And hope you had a nice Thanksgiving also..

Nov 23, 2012 5:46PM
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Vineyard....You have to quit giving me those "thumbs down."

 

They don't mean anything, except to you.

Nov 23, 2012 3:49PM
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Dow soars on Black Friday rally of the multi national companies ! Wait till the Black Monday blues set in !  Small retail business will show a loss of inventory sales ! There is More Hope and change that you can believe in !
Nov 23, 2012 5:23PM
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Man oh man, it was such a great week.....A 5% gain for us, thanks China and Obama, and get Congress off their azzes.

I wanted to buy this morning before an ex-dividend date...Probably have to wait until next week after a drop  or a Market correction.

 

"He who hesitates,is lost."....Yeah, a 4.5% dividend.

"Here comes Santa Claus,here comes Santa Claus." And he is carrying a sleigh full of GAINS.

Nov 24, 2012 12:55AM
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OBAMA, get off your Fat AZZ and come to terms with the House, you pathetic spender.

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