Posted: August 20th, 2007 | Author: Stock Pitcher | Filed under: Mad Money | No Comments »
On the recent edition of Barron’s which is published by Dow Jones which is now owned by Mr. Rupert Murdoch who happens to be creating a rival station to the beloved CNBC that we all love and watch just wrote a report trashing him because his returns are lagging the market. By their measurements, over the least, Cramer’s stocks rose 12 percent, compared with a 22 percent rise in the Dow Jones industrial average and a 16 percent rise in the Standard & Poor’s 500 index. This is obviously a staggering percentage to be trailing the market.
If we look into the report a little more there are some points to be refuted. One while Cramer makes a recommendation, he does not tell his readers to just jump into the stock which usually jumps after his recommendation. Usually he recommends buying them in a week or so and using limits. If you were to buy every stock after the recommendations, your returns would trail the market because you’re buying it at a definite high. Also his show is not about picking stocks although it may seem like it, it’s meant to be educational and supportive of his books which provide in more details of how to become a better investor. In a light of their criticism, Barron’s says “There is no doubt that Cramer is trying diligently to make you money. His advice is generally smart, his knowledge of individual stocks amazingly detailed,” and that is the point about Cramer, he sincerely wants to make his audience money and when you read his autobiography, “Confessions of A Street Addict”, you’ll see how it is.
But throughout his career, Cramer has been criticized and ostracized yet he lives on as a Robin Hood in a way; attempting to make the unfavorable world of investing a little more favorable to the average Joe or Jane. He may be the spark to many people who would otherwise not have a light.
Posted: August 17th, 2007 | Author: Stock Pitcher | Filed under: Mad Money | 1 Comment »
In one single day, Cramer changed his tune because now he’s loving it apparently. How a simple discount rate cute will fuel the economy and credit issues. I thought this problem had to do with bad loans and will throwing more money at it solve it? Cramer did agree that this was more a change in “in psychology, not fundamentals.” But this change Cramer said investors are on the offensive now and they should buy! Ultimately Cramer believes that analysts will be urging investors to “buy, buy, buy” after the weekend.
While there wasn’t a huge rally, Cramer said that this move averted a huge drop in the market possibily over 1000 points from Friday to Monday because overnight, the futures indicated the market to be down almost 150 points easily. But the Fed came in and changed the dynamics of everything. Although the mental attitude changed, Cramer said to “forget that the market was up today,” because hedge funds are still in “sell mode…pay off the investor masses” who were redemming their money from funds. There was a large outflow however statistically, retailer investors are a horrible indicator of the market but if there are enough outflows some funds will fall. But most of the time, you should take a contrarian view.
Yet Cramer warns that the 5.4% plunge for Japan’s Nikkei 225 Friday could happen here as well “most of the bad stuff is behind us.” Cramer sounded quite optimistic though.
Cramer viewed the Fed cut was the equivalent of an injection of nearly $120 billion in liquidity into the banking system as a move that saved Thornburg Mortgage (TMA) and Countrywide Financial (CFC) both were “within days of failing” but now look like takeover targets! What a turn of events! Countrywide even had a run at their banking deposits yesterday after news of them tapping credit which was definitely not a good since. They currently fund 70% of their loans with their funds but hope to go down to 100% by September which means cutting loan production. In addition he recommened Goldman Sachs (GS) and Lehman Brothers Holdings (LEH) – He owns Goldman for his charitable trust, Action Alerts PLUS.
OTHER PICKS:
Sears Holding (SHLD), which he owns for his charitable trust because it has a lot of cash on hand. Other picks were Bear Stearns (BSC), Downey Financial (DSL) and Washington Mutual (WM)
HURRICANE PICKS: Hurricane Dean is predicted to hit the Gult:
He picked Centex (CTX), as it could see a “short squeeze” and added Schlumberger (SLB) and Halliburton (HAL), because oil and gas are “total smoke shows.”
Once again, Cramer was pitching NYSE Euronext (NYX), which he owns for his charitable trust saying that valuation is low and their volume because of volatility is way too high.
Cramer gave all these recommendations saying that the stocks are ones that you can “buy high and sell higher.” but suggested to wait for the stocks to come down a bit from it’s spike from the rate hike.
LIGHTNING ROUND:
Honeywell (HON): CEO Dave Cote “is just the master of Honeywell. He’s buying back stock hand over fist. He’s doing a great job. … Honeywell is absolutely a TripleBuy.”
UBS (UBS): “Has been spindled, mutilated, crushed, whipped, and you know what? It’s a great franchise, and it’s going to come back. … The stock is way, way off its 52-week high. … Let’s pull the trigger if we can around here and buy some UBS. … It’s going to start rallying.”
Cummins (CMI): “I like Cummins. … It has now pulled back. … Caterpillar (CAT) is now down … 16 straight points. I think Caterpillar is a better buy now than Cummins.” Cramer owns Caterpillar for his charitable trust.
US Bancorp (USB): “I think Warren Buffet has just bought a ton of USB. Very little exposure to the mortgage market. … US Bankcorp is fine with me. I would stick with US Bancorp.”
Ingersoll-Rand (IR): “Warren Buffet has been buying this stock almost as aggressively as the company has itself. … The buyback is one of the most aggressive on the New York Stock Exchange. …. I think Ingersoll … is a buy.”
Ametek (AME): “Precision instruments is a good business. … I like Ametek. … Lenny Dykstra … thinks that this stock is the next one to move. … If he likes AME, I’ve gotta be on board, too.”
Posted: August 16th, 2007 | Author: Stock Pitcher | Filed under: Mad Money | No Comments »
After the market came back from a 340 point drupping, Cramer pointed out some good picks in financials. “Wells Fargo (WFC) could survive the post-Bernanke world and head higher,” said Jim Cramer on his “Mad Money” TV show Thursday. “It is the great speculative play that should prosper” because it has a good dividend and is diversified but he would buy between $32 to $34 (Wells Fargo close at $35.40 today). In the long term, the survivors will “long-term beneficiaries” of Ben Bernanke’s term. But overall he still said that financials were still a bad play and pointed out some short ideas such as Washington Mutual (WM), H&R Block (HRB), Capital One Financial (COF) and Friedman Billings Ramsey Group (FBR).
In terms of the market, Jim said that you shouldn’t sell during the panic like he did in the low points of 1987 and 1998 and it’s not “time to bail” but he gave some sell recommendations like selling Vmware (VMW) and to sell off minerals even after taking the losses. Also he mentioned that the retail industry is getting weak so that’s a sell too because spending could be weak under this fed. Other sells were Lamson & Sessions (LMS) and Six Flags (SIX) were are having attendance problems at that parks. But Cramer predicted that we’ll continue to see ups and downs until a market disaster or “capitulation” so it’s better focus on long terms buys and not trades.
Cramer pointed out that although KKR Financial (KFN) and Thornburg Mortgage (TMA) are two of the higher-paying dividends, they aren’t quality because the price is going down making the yield go up which means that it jeporadizes the yield when profits go down so when they stop or cut dividends, the stock loses the floor on it. Instead he recommended cigarrette maker, Reynolds American (RAI) which pays a “nice dividend,” at 5.5% yield or Altria (MO), which he owns for his charitable trust.
LIGHTNING ROUND – Highlights.
Crocs (CROX): “I will always keep some Crocs on hand. … I like the stock. It’s had a nice pullback. It’s having a nice quarter. … I want to reiterate that Crocs is still in the growth phase. I’m not abandoning the story.” – He’s sticking with it but he just said he’s down on RETAIL! WHAT!
Acadia Pharmaceuticals (ACAD): “I got behind Acadia awhile ago. It was my speculative play, and then I switched to Nastech Pharmaceutical (NSTK). … That’s the one you want to be in.” Yes the nasal stock again!
Apple (AAPL) “I think Apple’s come back enough. I like it. It’s one of my four horsemen. I know it’s been crushed.” Sticking with it. iPhone is still a top seller.
Wells Fargo, WFC, H&R Block, HRB, Capital One Financial, COF, Friedman Billings Ramsey Group, FBR, Apple, AAPL, Acadia Pharmaceuticals, ACAD, Nastech Pharmaceutical, NSTK, Crocs, CROX, Lamson & Sessions, LMS, Six Flags, SIX, KKR Financial, KFN, Thornburg Mortgage, TMA, Reynolds American, RAI, Altria, MO
Posted: August 15th, 2007 | Author: Stock Pitcher | Filed under: Mad Money | No Comments »
Once again, Jim Cramer called out the Big Ben saying that he’s just killing the economy but also placed blame on the hedge funds who wasn’t very transparent about their assets. Right now what is happening is that all these funds are selling anything they can to cover their redemptions and provide liquidity so that they don’t need to reveal their true assets but Cramer said that this should go on till the end of August. Great, another two weeks of bloody selling. We’ll see in September if Ben will listen who is consider an old school economist. In addition to the food and beverage stocks, which he believes will “work for the next six months,” he recommended high-growth stocks like Garmin (GRMN) and Chipotle Mexican Grill (CMG).
The current problem with Garmin was that there was too much demand and not enough product but they were fixing its problem of limited manufacturing capacity, Garmin recently opened up a factory in Taiwan, its third factory. Cramer called Garmin a “buy at $85 or $87.” and Garmin closed just above $91 today.
Cramer Picks:
Texas Instruments (TXN). The company is buying back stock “hand over fist,” and it’s not expensive, he said. Plus, “tech is seasonably right.” Cramer seemed rather confident that TXN would rise in a negative market.
Despite American Standard (ASD) falling into the toilet after Cramer said that ASD would go higher because of break up value but he believes that the stock is OK but I guess another victim of subprime since its housing related but note that Buffet has owned it for a long time too.
HMS Holdings (HMSY): “We’ve always liked this. This is one of those companies … that do cost control for medical. Whether it be HMS Holdings, whether it be MedcoHealth Solutions (MHS), up today, whether it be Cardinal (CAH), down just a little bit — these are all in bull market mode.” These were some health picks that are usually defensive on down market.
“Every bank is for sale here. … I cannot recommend a bank on this show. I can’t because I like other sectors so much more. Don’tBuy Don’tBuy Don’tBuy.” But then Cramer recommends on the same show – Downey Financial (DSL): “Downey’s a savings and loan located in California, which is ground zero for the Federal Reserve. … Downey is a stock that will fly up 20 points when the Fed decides to blink. … I think Downey’s book value is pretty clean. I am surprised it got down to $47. I can’t back away here.”
Like for the last two weeks, Cramer says “I think that EMC (EMC) is a better way to play VMware right now. … VMware is a great company, but $60 is my target, and we’re already up another $7 today.” Cramer owns EMC for Actions Alert PLUS, his charitable trust.
Hawaiian Electric (HE): “I like the utilities here. This one’s got a very high yield. It’s in a growth market. … We know that Akamai’s (AKAM) the wrong thing. I stick with Hawaiian Electric.” Utilities is a very good pick for this environment as well but some utilities will have to come down a little then you get a nice fatty dividend!
Freeport-McMoRan (FCX): “Indonesia wants to get more money from Freeport. … Freeport is a lot like BHP and RIO. This is a gold company and a copper company in a deflationary spiral mandated by the Federal Reserve. … Am I backing away from it? No. … I will say bull to Freeport.” Cramer owns Freeport for Action Alerts PLUS. Commodities seems very good as a defensive play as well because they have real assets to back them up and don’t forget about the world or China demand!
Posted: August 14th, 2007 | Author: Stock Pitcher | Filed under: Mad Money | No Comments »
Cramer was a bit optimistic today saying that one man’s treasure is another man’s gold. It’s true for every disaster there is someone benefiting. 9/11 – Security companies. Iraq War – Defense companies. Katrina – Infrastructure companies. Mortage problems – Buy of cheap bonds! Cramer suggested that you look into insurers who buy these investments and profit handsomely because they have plenty of cash from insurance premimums especially under these stable conditions. Insurance companies, he said, continually invest their money and are “gigantic cash machines.” However, not all insurance companies are “created equal,” he said. .
Cramer currently owns American International Group, Inc. (AIG) for his charitable trust but he recommended The Travelers (TRV). Cramer said it was “the best of the best,” Cramer said that Travelers knew how to be opportunistic especially when the credit spreads were widening making good bonds look like a steal. He thinks that we all can “make a fortune if we invest in companies buying debt. Travelers is a top Fortune 100 company and is the second largest underwriter of auto and homeowners policies which is a very stable business.
FOOD TRADE:
Staying defensive, next sector was food where Cramer thought would bring us back to the “black.” Cramer suggested food makers Kraft Foods (KFT) and Proctor & Gamble (PG) because they both can sell off less profitable and well know brands to other itnernationl companies that need some branding and become more profitable. Jimbo referred to Ad Age Magazine which recommened General Mills (GIS), PepsiCo (PEP) and ConAgra Foods (CAG) as great picks as well.
A more speculative food pick was Treehouse Foods (THS) which has been on an “acquisition spree” which makes it more risky because of possible consolidation problems but they own decent brands in Santa Fe, Del Monte and Oxford, with a foreseeable purchase of Kraft’s line of salad dressing. Treehouse posted a year-over-year profit increase of 42% in the second quarter.
Next food pick was B&G Foods (BGS) which owns brands such as Ortega, Cream Of Wheat and Underwood. With just a 12.3% in sales, this pick is much more conservative but it has a yield of 6.74% according to Google Finance.
ON SHOW INTERVIEW
In an interview with Trinity Industries (TRN) Chairman, President and CEO Timothy Wallace, Cramer suggested that the company was starting to move despite it’s 20% drop in stock price. Wallace said that it was experiencing the greatest revenue growth because they are in the railroad industry which is seeing a lot of interest since Buffet started buying as well. However Cramer said it’s not a buy right now but it’s a good long term pick.
LIGHTNING ROUND HIGHLIGHTS:
Research In Motion (RIMM): “I’m staying bullish. Let me explain why. I have been using a 1990 paradigm. … What stayed strong during that? The highest-growth companies with the best balance sheets. When I think of Research in Motion, like when I think of Garmin, the highest-growth companies with the best balance sheets. … I am not backing away from a stock like Research in Motion.” Interesting pick even though a lot of people may start selling soon.
ViroPharma (VPHM): “I screwed up on ViroPharma. … Ever since then, I have hated it. … I am still a seller of ViroPharma.” Nothing like a man who admits his mistakes…you heard him…SELL IT!
Cramer reiterated buys in ” Intel (INTC), Hewlett-Packard (HPQ) , EMC (EMC) and Cisco Systems (CSCO)”
Intel, INTC, Hewlett-Packard, HPQ, EMC, Cisco Systems, CSCO, Research In Motion, RIMM, Trinity Industries, TRN, B&G Foods, BGS, Treehouse Foods, THS, General Mills, GIS, PepsiCo, PEP, ConAgra Foods, CAG, American International Group, Inc., AIG, The Travelers, TRV
