Archive for the ‘Mad Money’ Category
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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Wednesday, August 22nd, 2007
Jim Cramer on Mad Money tried to explain the psychological shift going on in the market. While everything is still wrong and the problems of subprime still exist like H&R Block (HRB) tapping into a line of credit, American Home Lending (LEND) halting loans, and Lehman Bros (LEH) closing their mortgage unit. The news is all bad but the market is still up because the mental perspective is positive. It’s not what have you done for me - it’s what have you done for me LATELY. But he said “What I’m emphasizing is use the lesson I’ve learned, which is that don’t be so granular…Don’t look at Lowe’s and puzzle over why it is going up. Look at it and understand that we’ve flipped in the ways we look at things.”
Cramer stressed retail is “a fabulous place” to be when the Fed stops raising rates and starts cutting” and people can’t just look at can’t just look at the company,” like Lowe’s (LOW) because otherwise they’d be shorting Lowe’s which would be against the sway of the market. Cramer suggested Lowe’s and Toll Brothers (TOL) are now situations that have stabilized and could get better - not worse. But he stressed that people need to DO THEIR HOMEWORK but listen to the conference calls.
MICROSOFT TRADE:
On Sept. 25 release of Halo 3, the flagship franchise of Microsoft’s (MSFT) Xbox video-game system will be the “biggest video game event of the year” But not to be witty but Cramer believes Halo 3 will bring the halo affect to the X360 consoles that are killing PlayStation 3 but Cramer says the best play is GameStop (GME), the largest video game retailer in the U.S.
Whiles it’s already up 33% this year, this is “great season for tech” to come and because in video-game culture games are now a common part of society like a movie. Cramer suggested buying on any weakness after Thursday’s postearnings conference call as long as it doesn’t miss earnings otherwise forget it. So if it skyrockets after earnings or if earnings tank, then forget it. But if it works out then hold it as a short term trade until Halo’s release.
DOLLAR TREE TRADE:
“The psychology has changed, and stocks can once again go higher,” however, Cramer believes that the U.S. economy heading toward a recession. For this reason, Cramer believes “the world of the dollar store” is a good play because as slower times for “low-end consumers” generally call for “lower spending,” these consumers are more likely to curb spending with “inferior goods.” Cramer recommened Dollar Tree (DLTR) because it is the “best of breed” while it is still increasing store trafice and it’s one the move. It recently began accepting food stamps and debit cards for payment, thus widening its economic reach. Also to increase margins, Dollar Tree has also begun selling items that “cost more than a dollar,” (yes it’s an oxymoron but it works).
In terms of competition, Dollar Tree easily stands out from its two main competitors, Dollar General and Family Dollar (FDO). While Dollar General was recently taken private will close “underperforming stores,” Family Dollar already has twice the stores that Dollar Tree does so it can’t expand as much while Dollar Tree can. Cramer told investors to wait “at least five days” before they buy into Dollar Tree and DO SOME HOMEWORK. Yes this is all because of the Barron’s article. Barron’s should read his book.
MEDECO TRADE:
Medco Health Solutions (MHS)’s CEO and Chairman David Snow was on Mad Money and Cramer congratulated him on his company’s consistency. Medco, one of the world’s largest purchasers of generic drugs and largest mail-order pharmaceutical distributor, averages 6% growth per year, says Snow. In the end, Cramer said it’s a good long term growth because more generics are going on the market every years and see it as a long term play to 2012 as a type of baby boomer trade but he said watch the stock and buy when it goes down.
Lightning Round Summary
Cramer was bullish on Crocs (CROX), Precision Castparts (PCP), Goodyear Tire (GT), InterContinental Exchange (ICE), CME Group (CME), NYMEX Holdings (NMX), NYSE Euronext (NYX), Vector Group (VGR), Amazon.com (AMZN), Apple (AAPL), Google (GOOG), Research In Motion (RIMM) Reynolds American (RAI) and Altria (MO).
Cramer was bearish on Yamana Gold (AUY), CyberSource (CYBS) and True Religion Apparel (TRLG).
LIGHTNING ROUND HIGHLIGHTS:
Yamana Gold (AUY): “If you go through Yamana’s quarter, it is the only growth gold stock out there. It is making an incredible amount of money. … It also produces copper at the same time.” Cramer said he thinks everyone should have gold in his or her portfolio, but it’s not going to go up for a while. “Gold is not the right thing to buy in a deflationary spiral.”
Precision Castparts (PCP): “The bull market in aerospace and defense is back. Precision Castparts had a better quarter than almost every other supplier to the major airline companies. … Now that the Fed is on our team, all these bull markets are back in place, and Precision Castparts is a great way to play the aerospace and defense bull market.”
InterContinental Exchange (ICE): “I like ICE. … I like derivatives. I like commodies trading. ICE is good. … I am hopeful that the Nymex (NMX) merges with the New York Stock Exchange (NYX). It would be a terrific deal. … I like ICE, I like CME (CME), I like Nymex, and I like NYSE,” which Cramer owns for his charitable trust. “The only one of those that’s done really badly is New York Stock Exchange, but I’m stickin’ with it.” - Will the buyout of NMX help NYX? He just said he likes them all.
Goodyear Tire (GT): “I think Goodyear Tire had a major pullback, and the pullback is a mistake. Goodyear Tire is one of those companies … best of breed. I think I like the stock up to the $32, $33 level.” This is also a good global play as he makes tires for large vehicles as well.
Crocs, CROX, Precision Castparts, PCP, Goodyear Tire, GT, InterContinental Exchange, ICE, CME Group, CME, NYMEX Holdings, NMX, NYSE Euronext, NYX, Vector Group, VGR, Amazon.com, AMZN, Apple, AAPL, Google, GOOG, Research In Motion, RIMM, Reynolds American, RAI, Altria, MO, Yamana Gold, AUY, CyberSource, CYBS, True Religion Apparel, TRLG, Medco Health Solutions, MHS, Dollar Tree, DLTR, Dollar General, Family Dollar, FDO, H&R Block, HRB, American Home Lending, LEND, Lehman Bros, LEH, Toll Brothers, TOL, Microsoft’s (MSFT, GameStop, GME,
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Tuesday, August 21st, 2007
After the senate starting showing their influence on the Federal Reserve, Jim Cramer now feels that we are “in for a series of interest rate cuts over and over and over” from the Fed. The best play Cramer felt with money market and CD rates going down, was putting money into dividend paying stocks that are going to increase in value.
DIVIDEND PLAY:
Cramer said Procter & Gamble (PG) is a “a great stock” and an investment for the long term. Although only having a 2.2% yield on a $64 stock, Cramer reminded everyone that PG was just $30 a share in 2000. It might not be quick growth but safe growth through global growht and Cramer believes that the stock goes to $90.
PET PLAY:
While mentioning PetMed Express (PETS), a discount pet pharmacist, Cramer prefers PetSmart (PETM) which operates more than 966 pet stores in the U.S. and Canada, is known for selling “high-class premium” items. Having $245 million in cash and paying a small dividend adds to the best aspect of the company which is the lack of competition in the space because its main competitor, Petco was recently taken over by a “debt-ridden company” and is “likely to be closing stores.”
VEGAS PLAY:
When asked about a vegas play, Cramer preferred Las Vegas Sands (LVS) or Wynn Resorts (WYNN) instead.
Lightning Round
Cramer was bullish on Aecom Technology (ACM), Jacobs Engineering Group (JEC), Wachovia (WB), Schlumberger (SLB), Transocean (RIG) Tata Motors (TTM), E*Trade Financial (ETFC), American Capital Strategies (ACAS), Hudson City Bancorp (HCBK) Level 3 Communications (LVLT) and Tessera Technologies (TSRA).
Cramer was bearish on Dean Foods (DF), Banco Popular (BPOP), Parker Drilling (PKD), Foster Wheeler (FWLT) and First Solar (FSLS).
LIGHTNING ROUND HIGHLIGHTS:
Dean Foods (DF): “If you want to see what can go wrong in corporate America, you go listen to or call up the Dean Foods conference call. Everything that could go wrong for this company went wrong. … This has become a very problematic story, and I’ve gotta tell you something: I don’t think it’s over, and the company doesn’t think the pain’s over, too. If they’re not bullish, I’m not bullish.”
“Let’s stick with Schlumberger (SLB) and Transocean (RIG). They are the best.” Cramer owns Transocean for his charitable trust.
I think it’s going to run into selling pressure. … We will not get a reignition of FosterWheeler (FWLT) until we get another quarter in the bank.”
“E*Trade Financial (ETFC) got hit on some stuff last week about mortgages. … [CEO] Mitchell Caplan has done an unbelievable job on this E*Trade. … I would buy some here, and let it come down if it does. … I’ve been aghast that this stock was able to be rumored down. It was part of the whole subprime thing that took on a life of its own. … I like the stock.”
American Capital Strategies (ACAS): “Malon Wilkus is the CEO. He is a great investor. … He is a seasoned survivor. He just bought stock this week. … I think that this company is a survivor. A lot of people have tried to call it out a lot of times. They’re not going to be successful.” He’s bottom fishing…will he be right?
Level 3 Communications (LVLT): “I like LVLT for one reason: because I believe there is going to be a bandwidth shortage. … I am picking this as a long-term speculation.” He’s been picking this for a long time but long term it may be nice especially if there is the first earning surprise then more will come.
Tessera Technologies (TSRA): “I mentioned American Standard. I blew [it on] Tessera, too. I thought the quarter was going to be good. I got the quarter wrong. … Now in the low $30s, I would definitely buy it. … I believe in both of them, but I got them wrong. I want to stick with Tessera, and I want to stick with American Standard, but you’ve got to go to other guys who are better on those stocks than I am.”
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Tuesday, August 21st, 2007
Jim Cramer came back Monday to the Barron’s article trashing him and his record but he was glad to see so much support from his fans and his audience. He was gracious enough to thank them and reiterate what he’s all about which is making everyone money.
REGIONAL BANK TRADE:
As his first sector trade he recommended regional banks because they should make more money as the spread grows larger when the Fed is expected to cut rates later this year. People are expect a few now so it will only benefit these banks. Cramer’s pick was KBW Regional Banking ETF (KBW). KBW has more than 50 holdings, and its five-year earnings growth is more than 9.4%.
Cramer also suggested that National City (NCC) and Comerica (CMA) were good regional banks and they were potential takeovers of regional banks.
“If you can’t get a good price, wait until it settles down,” cautioned Cramer about a buy-in to KBW. We’re buying a sector here, not best of breed,” he said, adding that this may be the “best way to play the upcoming cycle of the Fed.”
EBAY TRADE:
“I see a bargain in tech and that bargain is eBay (EBAY).” Cramer did stress that it’s “not a buy right now,” because it is trading at 21 times next year’s estimated growth.
But on the positive, Ebay has a “pristine balance sheet” and more than $3.6 billion cash on hand. In their traditional auction business, it has more than 100 million buyers and sellers worldwide while it’s slowing, they are still able to press for organic growth. One way is selling ads on their own site which generates tons of views that is being converted to ad revenue. It’s growing at 96% year over year. But they have two extreme fast growing parts of their business which is Paypal and Skype. Skype is how the world talks and it is the most popular communication tool in the business and personal world. Whether doing business in India, China, US or Europe it is the tool. As Wifi and WiMax grows, Skype will grow and advertising will be a great avenue for Ebay. Then the next global name is Paypal which is the most dominant online payment system in the world. Even the great Google Checkout hasn’t been able to make a dent. Cramer called it the online Mastercard (MA). In addition they own 25% of Craigslist which is the dominant classified online ad site in the world. I myself must admit that it’s amazing. I sold my car, found my apartment, and got my fridge all from Craigslist.
Cramer said to get Ebay below $34 which it closed just below. He reiterated that like Google (GOOG), Garmin (GRMN) and Research In Motion (RIMM), eBay is a “long-term investment play” while also a “digitalization of commerce play.”
UNITED ONLINE PICK
As a content and a traditional dial up play, Cramer spotlighted United Online (UNTD) It pays a dividend of 6% because of it’s dependable dial up revenue because amazingly dial up is still 20% of the U.S. online adult population through Netzero and Juno. In terms of content it owns, Mypoints.com and Classmates.com which the later is being spun off as a separate company as an IPO. Classmates is a social network as well as a subscription based service. Although it has a lot of cash, I have some doubts because both businesses are in the decline with dial up and classmates.com. Cramer recommended it under $14.
RIVERBED TECHNOLOGY PICK:
Riverbed Technology (RVBD) CEO, Jerry Kennelly was on the show to explain what Riverbed does which his all businesses to be able to expand their access speed connection but their new product Steelhead Mobile product extends it to laptop technology. Predicting that there will be more than 543.1 million mobile office workers by 2009, Cramer called it a buy at under $40.
LIGHTNING ROUND:
Cramer was bullish on Under Armour (UA), Crocs (CROX), Texas Instruments (TXN), Analog Devices (ADI), Intel (INTC), Consolidated Edison (ED), Deere (DE), Agrium (AGU), Monsanto (MON), Seaspan (SSW), Eagle Bulk Shipping (EGLE), General Maritime (GMR) Integrys Energy (TEG), NYSE Euronext (NYX) and Air Products & Chemical (APD).
Cramer was bearish on Atmel (ATML), Hansen Natural (HANS), Terra Nitrogen (TNH), American Electric (AEP), Akamai (AKAM) and GrafTech (GTI).
LIGHTNING ROUND HIGHLIGHTS:
Under Armour (UA): The 37% short interest in the stock is “ridiculous,” said Cramer. “This back-to-school season is going to be awesome. I know the stock is up a lot … but you know what? I am sticking by it. I think that this stock — and by the way, Crocs (CROX) — are two stocks that will go higher.”
I’ve got terrific stocks such as Texas Instruments (TXN). … I’d rather see you in Texas. I’d rather see you in, yes, Analog Devices (ADI), but more important, I would rather see you in Intel (INTC).”
Air Products & Chemical (APD): This stock was one of Cramer’s $80-to-$120 plays. “That stock is beginning to make its climb right back. I think it’s absolutely terrific. I absolutely think that Air Products is ready to go to par, or $100. I want to stick with Air Products.”
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