MAD MONEY: DIVIDEND AND PET PLAYS

Posted: August 21st, 2007 | Author: Stock Pitcher | Filed under: Mad Money | No Comments »

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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