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TheStreet.com's Jim Cramer says Parker Hannifin's punishment for good results is typical of what to expect in this market.
Parker Hannifin (NYSE: PH) (Cramer's Take) defines this market. The company delivers a perfectly good quarter, says international is smoking, boosts forecast, commits to more buybacks -- and then loses almost 10% of its value.
That's what this market is all about.
It was in the cards. You knew it if you listened to the conference call. Because on that call the company had to answer endless questions about how it would fare in a recession, even though it saw improvement domestically.
PH is one of those companies that keeps the Fed from easing: its commercial aerospace and engines businesses are really strong. But no matter what, the Street has decided that PH spent too much money buying back stock at higher prices -- the mantra of the moment -- and can't possibly do well in the now well-baked-in Fed-mandated recession.
So the stock gets hammered. Mind you, this isn't an Under Armor (NYSE: UA) (Cramer's Take) catastrophe or a Schlumberger (NYSE: SLB) (Cramer's Take) miss; it is an absolute beat, a company that sells at about 12 times earnings that is growing and does great with a weak dollar.
Doesn't matter.
If you knew that the Fed would cut aggressively you would buy this stock.
But you don't. So you sell it.
And that's what happened yesterday.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
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Reader Comments (Page 1 of 1)
1-24-2008 @ 4:54PM
ellswortho said...
i just got a notice from Bank of America of a interest rate of 27%--witch is insane ---take it or leave it-==cash is king
1-18-2008 @ 4:07PM
brian said...
If Conrad were still doing politcal cartoons, he would show gwb as Nero, playing the fiddle while wall street & the country burn.
1-18-2008 @ 4:25PM
Enrique Cowley said...
The proposed tax relief is a shot in the arm. What's needed is govt. control on credit card interest charges. Interest charges should be regulated a fix to a 4-5 % over prime. The credit card industry is out of control and hurting the whole economy with outrageous % charges. It stand to reason, if credit card % are lowered, there is more money for the cunsumer
to pay down debt and save.
1-19-2008 @ 9:47AM
Jim said...
This is bull, keep the Government out of it.
1-20-2008 @ 7:42AM
RBB said...
I'm kinda surprised that JC is surprised how the markets act or in this case react . . . for most of the people don't understand what the political class does to them as much as they think they do for them. I'm confused.
1-22-2008 @ 7:55PM
Ron said...
I believe that our children should learn at an early age fiscal responsibility so they can make sound judgements when they grow up. It has been apparent that some of our elected officials will never learn that process.