Archive for August, 2007
Wednesday, August 29th, 2007
Sorry: Just some notes for you:
Users Guide: Part Two:
CHINA TRADE:
Eric Bolling: Yanzhous Coal (YZC) for electricity trade
Guy Adami: Petro China (PTR) just found largest find in oil in 30 years. China Mobile (CHL) because of 350 million users.
Pete Najarian: Baidu.com (BIDU) – The next Google – unbelievable upside.
Jeff Macke: The9 Limited (NCTY) – Gaming company and is owned by 15% by Electronic Arts
Chinese ETFs:
IShares China ETF (FXI) – Bolling says that FXI is better because of size.
Powershares China ETF (PGJ) – More heavier in materials
Vanguard Pacific ETF (VPL) – Owns parts of Asia
Global US Trade:
Adami says stay long until Beijing.
Yum Brands (YUM)
OLYMPIC PLAYS:
Eric Bolling suggest Hotel plays
Jeff Makes says buy Nike (NKE) because of their long lasting relationships.
Sybase (SY) –
MACAU TRADE: Gambling Trade
Eric Bolling: IGT (International Gaming) -
Adami: Starwoods Hotels (HOT)
Final Trades:
Macke: International Gaming Technology (IGT) and Nike (NKE
Najarian: MGM (MGM)
Adami – China Mobiel (CHL)
Bolling: Chinese Hotels: Sorry didn’t catch the name. (HMIN)
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Tuesday, August 28th, 2007
Sorry everyone. I will be on hiatus for the next couple weeks because of a huge deadline for a web project. CNBC has a fast money summary and The Street also has a summary for both Mad Money and Fast Money but you have to read and click through everything while you miss some tips and slight of hand. I’ll try to update now and then. Thanks for everyone who has been reading. Be back soon.
Well back to the topic. The spreading of the credit problem not only spread through the sub prime (low credit) loans and alta A (non documented loans) but now spread to the jumbo loans (any loan above $417,000). Well the problem lies not in the sub prime loans because people with poor credit aren’t exactly supposed to get loans if they have a bad record of paying them back. Second the problem isn’t in the Alta A loan problem because people who can’t document their assets or their income shouldn’t get a loan based on their word because that would mean every Tom, Dick, Larry and Jane can walk off the street and get a loan. I’m sure if Dateline did bust with a homeless guy trying to get a stated loan a last year, it would have blown the cover off the loan industry but it didn’t happen but boy that would have been some story.
The problem lies in the secondary market drying up for jumbo loans. Well these people can afford a half a million dollar loan but they can’t get the loan because the secondary market has stopped funding it although there isn’t as much risk as sub prime or Alta A because these people can document their income and have assets but don’t want to take out a loan that is 1-3% higher because of the amount. Let’s think about this. Well in most major markets, a half a million dollar home is not as big as it sounds. It’s very comfortable in places like Miami, Chicago, New York, San Francisco, and Los Angeles. The average home in Los Angeles is $500,000. If you save up $100,000 for your home which is a huge task for a starter home, you maybe not even get the loan because it borderlines a jumbo loan. So what is happening now is that the real estate prices are coming down to meet this lack of liquidity in the jumbo loan market. In parts of the Los Angeles county prices are being slash forty to seventy thousand so that it can be sold. So if the higher end market prices goes down, then of course the lower end market will go down but perhaps not as much. It’s a vicious cycle.
Here is the best solution: The government has to lift the jumbo loan amount for Fannie Mae and Freddie Mac to above $500,000 so that there is more liquidity for certain markets like California and New York. But here comes the problem, the government would just be feeding the fire more fuel to keep prices artificially high because most people can’t afford homes already. But we all have to worry about consumer spending as well with prices of homes going down, the refinance piggy bank is running empty on equity so those big purchases may be cut off soon. How would you feel if $50,000 equity went off your house in one month or if you already took out equity and figure out that you now owe more than the house! Not a good situation because we need our home prices high to keep some of the spending going because just today there were reports of credit card defaults were moving up so is this a sign of the consumer dying with the jumbo fall of real estate?
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Sunday, August 26th, 2007
Jim Cramer was rather optimistic about the market as he was even “warming up to the homebuilders.” Being a contrarian, his pick of that bunch is Toll Brothers (TOL) despite the recent downgrade from Bank of America Securities.
The theme of the show was making an analogy with football players and stocks because football great Joe Theismann was on the show. Theismann, picked Monsanto (MON) as his the “franchise player” of a stock portfolio. Theismann like Monsanto because it was diversified and pays a dividend. Cramer agreed that it could be best of breed and has a solid foundation.
Like Philly Eagles’ QB Donovan McNabb, or the “comeback player,” Theismann recommended Six Flags (SIX) because of the company’s management and that it’s building eight new roller-coasters. Cramer didn’t totally agree but noted there were weather problems.
The sleeper pick Wells Fargo (WFC) because Theismann believes that it will have “deep pockets” from mortgage profits.
His “speculative player” of the portfolio, Giants’ running back Brandon Jacobs is Level 3 (LVLT), which has to prove itself, said Theismann. Cramer supported this pick as it’s the play for the new YouTube age.
Theismann compared New England Patriots’ Randy Moss who the streaky player who sizzles at times to Intel (INTC) but Cramer likes its management and said that “in the fall, it’s right.”
As defense is also important in a portfolio, Theismann likes Coca-Cola (KO), the Baltimore Ravens of the market and Cramer agreed that the stock is always there “on bad days.”
Cramer liked the portfolio, though he was concerned that both Level 3, whose debt was up recently, and Six Flags “have questionable balance sheets.”
Emerson Electric Trade
Emerson Electric (EMR) was called diversified and has global reach and exposure but Cramer said that it is NOT a “stock for all seasons,” However like Procter & Gamble (PG), the play if the Fed doesn’t cut rates fast enough, Emerson is a “great dividend stock.” After doing a two-for-one split last year, Emerson is now up 180% from its low of $33.50 seven years ago. It’s now priced at $48 with a 2.2% yield, and Cramer likes it. Emerson and P&G are the “two best in show for the S&P,” he said.
Earnings Picks
Cramer believes that consumer spending will dry up so that consumers will have to find ways to save money. For this trade, Cramer recommended Dollar Tree Stores (DLTR), a company selling lower-cost goods and Cramer expects them to have a good earnings report on Wednesday.
Cramer was unsure of Freddie Mac (FRE) who is reporting Thursday because there are too many political factors and too much uncertainty.
Cramer said that H&R Block (HRB) which reports on Thursday was sell because Warren Buffett has sold his stake in the company and Cramer does not see any good news forthcoming.
Cramer picked Dell (DELL), calling it a “best buy for next week” ahead of upgrades and said it could go to $30.
Cramer suggest that everyone watch Sycamore Networks (SCMR) and prefers it over JDS Uniphase (JDSU).
Lastly Cramer recommended Sears Holdings (SHLD), which he owns for his trust. The overall future of Sears, which will be closing underperforming stores, looks good, he said. He sees Sears going to $170 and possibly as high as $195 “if the Fed does the right thing.”
Cramer said that he liked Sun Microsystems (SUNW) at $5. He considers SUNW “a sleeper” and said the changing of its ticket symbol to JAVA doesn’t matter.
Instead of picking E-House Holdings (EJ) as a China play, he prefered Baidu.com (BIDU) and China Mobile (CHL).
LIGHTNING ROUND SUMMARY
Cramer was bullish on Goldman Sachs (GS), Inverness Medical Innovations (IMA), Deutsche Telekom (DT), Vodafone Group (VOD), Schlumberger (SLB), Exxon Mobil (XOM), XTO Energy (XTO), Halliburton (HAL), Transocean (RIG), Crocs (CROX), GameStop (GME), Electronic Arts (ERTS), Activision (ATVI), Garmin (GRMN), Apple (AAPL), Google (GOOG) and Research In Motion (RIMM).
Cramer was bearish on OraSure Technologies (OSUR) Whole Foods Market (WFMI), Lan Airlines (LFL).
LIGHTING ROUND HIGHLIGHTS:
Goldman Sachs (GS): “I think that Goldman Sachs has been bottoming between $160 and $175. I have tremendous faith that that bottom is going to hold. If it goes back down there, I want you to buy.” Cramer said CEO Lloyd Blankfein is “a great man, and I am trusting him to deliver a great number next year.” Cramer owns Goldman Sachs for his charitable trust, Action Alerts PLUS.
I’ve got Inverness Med (IMA), which is down 10 points. Nobody likes it. … I’ve been buying it for the trust. I say swap out of your OraSure and get into my Inverness.”
No, but … it’ll take off. I like Vodafone (VOD) more.”
Cramer said no to all airline stocks.
Garmin (GRMN): “Garmin can go to $120. Apple (AAPL) can go to $150. Google’s (GOOG) going to $550. Research In Motion’s (RIMM) going all the way back to par, and your stock — you hold on to it.”
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Friday, August 24th, 2007
During his stock picking period, Jim Cramer feels that there are two approaches to play the recovery. They are the value method and the momentum method. The value method tells investors to look at the new-low list for stocks that are down 20% from their 52-week highs and that pay at least 3% in dividends. This provides a way to find good companies that are thrown out and forgotten because that dividend proves worth. When the Federal Reserve cuts rates, the dividend paying stocks will rise.
As a “value method play,” Cramer likes Aircastle (AYR), a company that owns and leases jets. Aircastle, off from its 52-week high in June, was “knocked down by sellers concerned with the credit crunch,” he said. The company’s “entire portfolio is leased out,” he said, and it is shifting to buying and leasing freighters, which give better returns than passenger planes. Recently there was insider buying by the COO and supports the idea that the stock is cheap. Another recommendation is Genesis Lease (GLS), which he first recommended last May. The stock is down 15% since then, but it has an 8.2% yield and $1.2 billion in capital. Not too shabby.
As for a momentum play, investors should look at the new-high list which included EMC (EMC) is a play on the VMware (VMW) IPO. However EMC, which he owns for his charitable trust is up less than 3% since then. So there is room to grow. The company owns 87% of VMware’s equity, a stake now valued at $6 billion more than in July. VMware stock, offered at $29 on Aug. 13, hit $70 Thursday. That’s a huge rise in equity and Cramer compared the EMC and VMware relationship to that of Cypress Semiconductor (CY) and its spinoff SunPower (SPWR). Cypress is up 52% since the spinoff; suggesting that it can happen to EMC as well which he said could rise to $23. Cramer believes that EMC, which trades at 11 times next year’s earnings, is cheap. Furthermore, its data storage business is also doing well. But Cramer said to wait a little while to get in on EMC, basically buy on weakness.
$80-$120 Picks
Because the chemical industry has few companies left, Cramer said that Air Product & Chemicals (APD) has pricing power on its side. Energizer Holdings (ENR) has made smart moves but is still too high, he said. Of all the energy companies, XTO Energy (XTO), which he owns for his charitable trust, is the best pick.
MAIL BAG
In his “Mad Mail” segment, Cramer responded to his first message, saying that Omniture (OMTR) could go to $30. Additionally, as one of his four horsemen of tech, Apple (AAPL) is “going to be terrific.”
Cramer said that the Countrywide Financial (CFC) “play is over” and that the Bank of America (BAC) play has begun.
And finally, Cramer liked Crocs (CROX), believing that the company is “on a mission.” He told viewers to listen to the Crocs conference call to know why he is excited.
Lightning Round Summary
Cramer was bullish on Apple (AAPL), Amazon.com (AMZN), Google (GOOG), Domino’s Pizza (DPZ), DryShips (DRYS), Eagle Bulk Shipping (EGLE), Costco Wholesale (COST), GameStop (GME), Citizens Communications (CZN), Blue Coat Systems (BCSI), Symantec (SYMC) and VF Corp. (VFC).
Cramer was bearish on MetroPCS Communications (PCS), RadioShack (RSH) and Circuit City Stores (CC).
LIGHTNING ROUND HIGHLIGHTS
Research In Motion (RIMM): “A lot of times people get in ahead of the split. That’s what happened with Research in Motion. … I always say, ‘Be cool. Be cool. Don’t do that.’ … Let’s deal with the fundamentals rather than deal with the split. Research In Motion is one of my four horsemen,” along with Google (GOOG), Amazon (AMZN) and Apple (AAPL). “RIM is ahead of itself. … On Stockpickr, a lot of people are saying, ‘Is this the RIM pullback I should buy?’ No. We’re going to wait for RIM to pull back more. It’s too expensive! … Then we’ll pull the trigger.”
Domino’s Pizza (DPZ): David Brandon is a “fabulous CEO,” Cramer said. “That man creates value. … Domino’s pays the special dividend, and Dean Foods (DF) pay the special dividend, and both of them are being hurt by dairy costs. … Brandon will manage it. … I’d like to pull the trigger on Domino’s on this pullback.”
I like Eagle (EGLE) more because it’s got a really big dividend. I don’t know. You can buy that on an earnings basis, but I prefer the shippers that pay the big dividends.”
RadioShack to make it better than it was, but it’s stalled now, and because RadioShack’s stalled, I do not want to buy this pullback. … Best Buy (BBY) is the only one that I would even come near wanting to buy, but there’s no reason to own that. We only like Costco Wholesale (COST) on this show. We like GameStop (GME). … We do not like retail on ‘Mad Money.’”
Citizens Communications (CZN): “I think it will [do well] . … All these companies eventually get bought. This is a small, rural wireline company. Wireline business has actually gotten stronger around the country. … I like it.”
Blue Coat Systems (BCSI): “That company has unbelievable blowout earnings. … It’s a security play, and all the security plays are hot. I even like Symantec (SYMC) now. You are spot-on with Blue Coat — even though it’s on the high list — as a momentum play.
VF Corp. (VFC): “The stock has pulled back … way too far. … Retail has fallen so out of favor. They own some retail … some great brands. … If you’re going to have to own retail that is not Costco and not GameStop,” Cramer said, VF Corp. is next on the list.
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Thursday, August 23rd, 2007
Stracey Gilbert “The Hammer” was on the show instead of Eric Bolling today and has a negative view on the market. On the market, Jeff Macke say that the shorts were just covering and there were some merger news to help the market up. Stacy Gilbert suggest that the market did not hit bottom yet. Pete Najarian says the agriculture plays were moving the market but Gilbert says this is not a buyers market but a stock pickers market.
Guy Adami says the Etrade (ETFC) and TD Ameritrade (AMTD) deal will happen and the New York Mercantile Exchange (NMX) and the New York Stock Exchange (NYX) may not happen because someone else may buy them instead. Dylan Ratigan says notice that none of the buyouts are private equity because the deals has dried up.
Stacey Gilbert says that the airlines may see some consolidation but Najarian disputes it. Macke says sell the airlines and where’s his wife’s bag that Delta lost!
Najarian and Gilbert says that the metals industry is moving. Najarian pointed out Alcoa (AA)
Abercrombie & Fitch (ANF) moved up despite guiding down but Macke says that the consumer is not dead while Ratigan says the younger folks not the Generation Y are the consumers.
Apple (AAPL) is seeing action. Najarian says there is a lot of call options and says that it’s about the other products not the iPhone. Adami on the other hand says there is some downside.
Netease.com (NTES) got good reviews from Ming Tsao who works with Gilbert and says that there is growth.
Bristol Myers (BMY) and Schering Plough (SGP) saw a lot of good call options. While Adami says watch out for a drop in Merek (MRK) because of insider selling.
Lehman Bros (LEH) moves up because Macke says the Fed is backing them but in the long term it’s not a good thing.
Bank of America (BAC) takes a 2 billion dollar piece of Countrywide Financial (CFC) at 20% share at great terms for Bank of America. Macke says the winner is Bank of America because they were buying a dollar for $0.80. Note: Warren Buffet bought Bank of America. While Gilbert says she doesn’t like financials and there are some problems. Cognizant Technology (CTSH) is a financial provider for IT and is a play for growth. Najarian says Citigroup (C) is looking good while Adami says BAC and US Bankcrop (USB).
Dubai picked up $5 Billion of MGM. Najarian it’s an area to look into Starwood (HOT) which is seeing activity and Gilbert owns it. Wyndam Worldwide (WYN) is a good one with it’s buy back. Gilbert recommends Gaylord Entertainment (GET) is a convention company.
Gap (GPS) who just found a new CEO has earnings tomorrow. Najarian says it’s an ok buy because it’s way down already.
IRobot Corp (IBOT)’s CEO was on show and talked more their military and consumer divisions. In 2006, it’s 40% consumer and 60% military but they wear expanding their consumer division quick. Macke, Najarian, Gilbert, and Adami says it’s a buy. Adami noted the 18% short interest…did someone say short squeeze!
POPS:
Abercrobie & Fitch (ANF) – Macke says don’t buy or short.
China ETF (FXI) – Najarian says own till Beijing
Hong Kong ETF (EWH) – Adami says it’s a buy
Blue Cost Systems (BCSI) – Gilbert says buy
Network Appliance (NTAP) – Adami loves it even here
US Airways (LCC) – Gilbert says that not to buy it on the upgrade
Foster Wheeler (FWLT) – Macke says the easy money is gone - don’t chase
DROPS:
Tween Brands (TWB) – Macke says good bye
Fleetwood Enterprises (FLE) – Najarian says stay away.
South Africa Trade: South African ETF (EZA) Najarian says you can wait and Macke says perhaps wait till 2010 World Cup.
Final Trade: No trades..they picked the MBA challenge Yale or Texas. Anyhow where is Eric? You must read about my conspiracy theory about why Eric Bolling is gone.
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