Jim Cramer Blog

Here are 7 stocks for traders for Wednesday from TradingMarkets.com:
Analog Devices (NYSE:ADI - News) beat earnings expectations on Tuesday afternoon, announcing $0.37 EPS over an expected $0.36 EPS. ADI's PowerRating (for Traders) is 5.

Medtronic (NYSE:MDT - News) matched earnings after the bell on Tuesday with $0.62 EPS. MDT's PowerRating (for Traders) is 5.
Eaton Vance (NYSE:EV - News) reports earnings on Wednesday before the market opens; look for $0.42 EPS. EV's PowerRating (for Traders) is 6.
Frontline (NYSE:FRO - News) should announce $1.08 EPS before the bell on Wednesday. FRO's PowerRating (for Traders) is 5.
When Regis (NYSE:RGS - News) reports quarterly earnings on Wednesday morning, watch for $0.57 EPS. RGS's PowerRating (for Traders) is 4.
Toll Brothers (NYSE:TOL - News) should report $0.05 EPS on Wednesday morning before the market opens. TOL's PowerRating (for Traders) is 5.
WCI Communities (NYSE:WCI - News) is expected to announce -$1.13 EPS Wednesday morning. WCI's PowerRating (for Traders) is 3.
PowerRatings (for Traders) are courtesy of TradingMarkets.com

Labels: ADI, EV, FRO, Hot Stocks, MDT, RGS, TOL, WCI

Bullish Calls:

Under Armour (NYSE: UA - News): 'I know the stock is up a lot ... but you know what? I am sticking by it.'Crocs (NasdaqGS: CROX - News)Texas Instruments (NYSE: TXN - News): 'I'd rather see you in Texas.'Analog Devices (NYSE: ADI - News)Intel (NasdaqGS: INTC - News): ' ... and more important, I would rather see you in Intel.'Consolidated Edison (NYSE: ED - News)Deere (NYSE: DE - News)Agrium (NYSE: AGU - News)Monsanto (NYSE: MON - News)Seaspan (NYSE: SSW - News)Eagle Bulk Shipping (NasdaqGS: EGLE - News)General Maritime (NYSE: GMR - News)Integrys Energy (NYSE: TEG - News): 'High-quality electricity and natural gas distributor with a 5% yield ... That one I particularly like.'NYSE Euronext (NYSE: NYX - News): 'The estimates are too low. The volume's been great. ... That's why I like the New York Stock Exhange.'Air Products & Chemical (NYSE: APD - News)
Bearish calls:
Atmel (NasdaqGS: ATML - News)Hansen Natural (NasdaqGS: HANS - News): 'I have to give it a Don'tBuy, because I can't figure out why it was up today.'Terra Nitrogen (NYSE: TNH - News): 'I'd rather see you in Deere or Agrium or don't forget Monsanto. Those are better.'American Electric (NYSE: AEP - News): 'I think it's a well-run company, but I've got ConEd.'Akamai (NasdaqGS: AKAM - News)GrafTech (NYSE: GTI - News): ' ... At $14, it's too high for me. I'm going to tell you not to buy it.'

Published By SeekingAlpha

Labels: ADI, AGU, APD, CROX, DE, ED, EGLE, GMR, GTI, INTC, Jim Cramer, Lightning Round, Mad Money, MON, NYX, SSW, TEG, TXN, UA

CEO Interview: Indra Nooyi, PepsiCo (NYSE: PEP - News)
"The stocks are saying there's going to be a slowdown, so it would be wise for you to prepare for it," said Cramer, and while he isn't urging people to sell all their cyclicals yet, he suggests its time to take some profits. He invited Pepsi CEO and chairman Indra Nooyi onto the show to discuss the company's great performance which she said was due to the company's diverse portfolio and stellar management. Nooyi added, in terms of financial resources, Pepsi is not constrained, and in terms of people-resources, North America is growing and the company's international business is "exploding." Cramer mentioned a Wall Street Journal story that Nestle turned down a merger with Pepsi because it considers the latter company junk-food laden. Nooyi pointed out Pepsi's expansion into non-carbonated beverages and healthy snacks and its production process which conserves energy and water. Cramer remarked Pepsi delivered better than expected numbers and is a the right stock to buy.
Remember the AlaMobile: Texas Instruments (NYSE: TXN - News), Nokia (NYSE: NOK - News), Ericsson (NasdaqGS: ERIC - News), Sony (NYSE: SNE - News), Analog Devices (NYSE: ADI - News), National Semiconductor (NYSE: NSM - News)
With back -to-school tech gadgets in production, Cramer discussed TXN which was hit by a selloff; "I don't care about the quarter," he said. "I care about the future, because that is where we're going to make our money." He would use the decline as a buying opportunity, and thinks its mobile business will energize TXN. He added NOK, ERIC, SNE, ADI and NSM are also doing well. Returning to TXN, Cramer predicts the next quarter will be excellent and adds the company has a "massive rest-of-world" exposure.

Go Cisco (NasdaqGS: CSCO - News)! with Juniper Networks (NasdaqGS: JNPR - News), and Ciena (NasdaqGS: CIEN - News)
Cramer discussed a Financial Times interview during which Cisco CEO John Chambers says he's more enthusiastic about the company than he has been in a decade and the internet is entering a second phase which should last 10 to 15 years. Since Cisco provides the "backbone" for many types of communcation, Cramer doubts Chambers is just trying to sell his company, and notes Cisco rivals are delivering but have less upside than Cisco. Cramer noted Cisco is not expensive, is below its 52-week high, has $22 billion in cash and is protected from the ailing economy with its big international exposure.
Mad Mail: Six Flags (NYSE: SIX - News), Men's Wearhouse (NYSE: MW - News)
Cramer told one viewer not to touch financial stocks. He said he doesn't like SIX's balance sheet, and added the stock will do badly if the weather is not good. He told another mailer he doesn't like Men's Warehouse.
Published By SeekingAlpha

Labels: ADI, CIEN, CSCO, ERIC, Jim Cramer, JNPR, Mad Money, MW, NOK, NSM, PEP, SIX, SNE, TXN

Six More Dow Stocks: International Business Machines (NYSE: IBM - News), Johnson & Johnson (NYSE: JNJ - News), J.P Morgan Chase (NYSE: JPM - News), McDonald's (NYSE: MCD - News), Merck Co. (NYSE: MRK - News), Microsoft (NasdaqGS: MSFT - News)
Cramer continued his series on Dow Stocks by admitting his target of $110 for IBM was too conservative, and given the company's great dividend and buyback, it should reach $114, but no higher. JNJ is a sell in spite of Warren Buffet's buying the stock. Cramer thinks it is staying at $63, and opines that maybe Warren Buffet liked the steady nature of the band-aid business, but adds "With so many other great names in the Dow, why back up the truck for band-aids?" Cramer called JPM's CEO Jamie Dimond a "great banker," but thinks he is going to be prevented from bringing out the best in JPM by the Fed; "Three more points for JPM, and then I'd declare victory." While MCD has a great international business, Cramer thinks it will peak 4 points from now at $55. Cramer says he was too conservative predicting MRK would go to $50, but at $53, he says the stock is "pretty much done for the year." On the other hand, he admits he was too bullish on MSFT, but is not changing his $35 target, since the company may underpromise and overdeliver.
Google (NasdaqGS: GOOG - News) and Amazon (NasdaqGS: AMZN - News)
Google has been stalled for a while, but Amazon has brought "in the jumper cables," says Cramer. AMZN's move from $39 to $69 makes GOOG look cheap in comparison, especially since Google has 63% sales growth and almost no competition while AMZN has 33% growth with competition from almost every retailer in America. Cramer sets the target for Google at $600, but admits he is being conservative.
Sell Block: CA Inc. (NYSE: CA - News), Analog Devices (NYSE: ADI - News)
Cramer declared a special "Crime and Punishment" edition of this week's Sell Block, inspired by the crime of his "hubris" (overweening pride) last week when he broke his own rule about avoiding tech until August. He now regrets having recommended CA which is down 7.4% since last Friday and ADI which he "missed by a mile."
Mad Mail: MEMC Electronic Materials (NYSE: WFR - News), Taser International Inc. (NasdaqGS: TASR - News), Rowan Companies Inc (NYSE: RDC - News), National Oilwell Varco (NYSE: NOV - News)
When a viewer asked how to play the shortage of polysilicon in Chinese Solar IPOs, Cramer said WFR is the obvious choice, but it missed the quarter and at $58, it's a "no-go." Cramer told another viewer to hold on to Taser, which he recommended ahead of the French election, for at least a few more points. Cramer says RDC has "too much actual drill for me" and says NOV is still "best in show."

Published by SeekingAlpha

Labels: ADI, AMZN, CA, GOOG, IBM, Jim Cramer, JNJ, JPM, Mad Money, MCD, MRK, MSFT, NOV, RDC, TASR, WFR

Isdell Adds Life to Coke (NYSE: KO - News)
Continuing his series on "transformational CEOs," Cramer discussed Neville Isdell who transformed the "has been" company into one that is looking beyond carbonated beverages to new growth opportunities. Under previous management, Coke missed the opportunity to buy Quaker Oats and Gatorade, which was purchased by its nemesis, Pepsi. After losing significant ground, Coke is back, and its last quarter was " a wonder to behold," said Cramer. The company is expanding internationally and Cramer calls Coke Zero a "success story." He thinks this is just the beginning of Coke's comeback.
Related: David Neubert thinks Neville Isdell is overpaid.
Next Week's Game Plan: Game Stop (NYSE: GME - News), Analog Devices (NYSE: ADI - News), Target (NYSE: TGT - News), CA (NYSE: CA - News), Dick's Sporting Goods (NYSE: DKS - News), Under Armour (NYSE: UA - News), Nike (NYSE: NKE - News)
Cramer would buy GME ahead of its Wednesday report, but only if it is down on Monday or Tuesday, and he also suggests buying ADI before its Tuesday report. He would pick up TGT and CA before they report earnings on Wednesday and would buy more TGT after Wednesday. Cramer would invest in UA and NKE before DKS reports on Wednesday.
Risky Delphi (Other OTC: DPHIQ.PK - News)
Although Delphi is bankrupt, trades on pink sheets and is around only $2 a share, three qualities he avoids in any stock, Cramer thinks "this company might have something big going on." First, Cerberus Capital Management and Appaloosa Management are offering Delphi a deal that would help get the company out of bankruptcy and may bring the stock up double. While Highland Capital Management values Delphi even higher, Cramer thinks the first deal is more likely to materialize. The stock is too risky for Cramer, who sees a two down, five up scenario; "but the two down could come first." However, he thinks Delphi may have an interesting story for the risk-takers.
Published By SeekingAlpha

Labels: ADI, CA, DKS, Jim Cramer, KO, Mad Money, NKE, TGT, UA

"Pipeline Play": Biosite (NasdaqGS: BSTE)
Cramer wanted viewers to take a look at Biosite which will be in demand if the Democrats "storm the winter palace" in November, because the money will go out of Big Pharma into "small, diagnostic plays." He likes the fact that Biotech is new and not yet played out, and comments that this producer of diagnostic tests keeps reinvesting money into new products. Cramer added Biosite is "sitting on top of a new product cycle," and should see an upside as well as more analyst coverage. He also predicts a short squeeze which should bring the stock up, and notes the company implemented a 12% buyback of its stock, and Fidelity is increasing its stake in the company from 12% to 15%. Cramer likes Biosite as a "pipeline story" and thinks the shorts are going to be sorry.
Here Comes the Sun Microsystems (NasdaqGS: SUNW)
Cramer declares that SUNW, a stock he has "hated for a very long time," is now an "under -$10 turnaround" because its new management is making serious changes by cutting costs and continuing to improve its sales. However, he cautions against impulse buying, and urges investors to find a good entry point and not to buy before Monday afternoon. Cramer sees upgrade potential, notes that its server business is "en fuego" and its software business is strong. He reminds investors to use limit orders when buying.

The Week Ahead: GlobalSantaFe (NYSE: GSF - News), Marvell Technology (NasdaqGS: MRVL), Analog Devices (NYSE: ADI - News), Blockbuster (NYSE: BBI - News), Dynegy (NYSE: DYN - News), Foster Wheeler (NasdaqGS: FWLT), McDermott (NYSE: MDR - News), Charter Communications (NasdaqGM: CHTR), Sprint (NYSE: S - News), Gap (NYSE: GPS - News), Viacom , and VeriFone (NYSE: PAY - News)
On Monday, Cramer suggests buying GSF before it reports a "blowout quarter" and would pick up MRVL after its disappointing report. He sees hope for MRVL because ADI indicated the worst is over in the chip inventory cycle. Cramer says investors should sell BBI before Tuesday and buy some back after a selloff, and he would do the same with DYN. He predicts strong earnings for FWLT and MDR, would buy CHTR ahead of its report, and would only pick up Sprint if it has an "incredibly miserable" quarter. Cramer also suggests taking a look at GPS, Viacom and PAY.
Mad Mail: Sirius Satellite Radio (NasdaqGS: SIRI) and XM Satellite Radio (NasdaqGS: XMSR)
When faced with a potential merger, Cramer says it is better to buy stock in the stronger rather than the weaker company, because even if the deal is off, the better company will rise.
Published By SeekingAlpha

Labels: ADI, BBI, BSTE, CHTR, DYN, FWLT, GPS, GSF, Jim Cramer, Mad Money, MDR, MRVL, PAY, S, SIRI, SUNW, XMS

J.C. Penney (NYSE: JCP - News), Ralph Lauren (NYSE: RL - News): Cramer sees JCP's 3% selloff as an opportunity to buy, and comments that management has its "eye on the ball." He praises its deal with RL which will produce private-label clothes to be sold exclusively by JCP. Cramer would by the stock at every 2 or 3 point dip.
Whole Foods (NasdaqGS: WFMI) and Wild Oats (NasdaqGM: OATS): Cramer likes WFMI's plan to buy OATS, because the move will eliminate a price-cutting competitor, raise margins and will give the company a chance to make a comeback after its decline in November.
Analog Devices (NYSE: ADI - News), Texas Instruments (NYSE: TXN - News), Broadcom (NasdaqGS: BRCM), Qualcomm (NasdaqGS: QCOM): Cramer cites ADI CEO Jerald Fishman's comments that inventory correction is over as a reason to expect a rally in TXN, QCOM, and BRCM, although he comments that QCOM is "too litigious for my taste."

Labels: ADI, BRCM, JCP, Jim Cramer, Jim Cramer's Stop Trading, OATS, QCOM, RL, TXN, WFMI

Agnico-Eagle Mines Ltd. (NYSE:AEM - News) reported fourth-quarter earnings more than doubled to 35 cents a share from 13 cents in the year-earlier period. The Toronto gold producer's revenue nearly doubled to $138.4 million from $71.4 million.

Ambassadors International (NasdaqGM:AMIE - News) shares climbed after Carnival Corp. (NYSE:CUK - News) said it signed a definitive agreement to sell its Windstar Cruises brand to Ambassadors $100 million. Carnival said the purchase price includes $40 million cash and the assumption of liabilities, and Carnival will provide mortgage financing for the remaining $60 million. Windstar Cruises operates three vessels and is a unit of Carnival's Holland America Line subsidiary.
Analog Devices Inc. (NYSE:ADI - News) fiscal first-quarter profit rose 26% on 6% higher sales. It sold more microchips used in industrial equipment and consumer electronics.
Arrow Electronics (NYSE:ARW - News) reported fourth-quarter earnings of $128.1 million, or $1.04 a share, up from a year-ago profit of $74.4 million, or 60 cents a share. Excluding certain items, such as restructuring charges and a gain from a tax settlement, the Melville, N.Y., electronics components distributor said it earned $92.2 million, or 75 cents a share, in the latest quarter. Sales rose in the latest three months to $3.49 billion from $2.96 billion in the same period a year earlier. The average estimate of analysts polled by Thomson Financial was for a profit of 73 cents a share in the December period. Looking ahead, Arrow sees earnings of 72 to 76 cents a share in the first quarter on sales ranging from $3.525 billion to $3.725 billion. Wall Street's current consensus estimate is for earnings of 74 cents a share in the March period.
Catalina Marketing Corp. (NYSE:POS - News) said it received an unsolicited proposal from ValueAct Capital Master Fund LP to acquire by merger all of the Catalina stock it doesn't already own, for $32 a share. Jeffrey Ubben, a Catalina director since May 2006, is principal owner of ValueAct, according to a statement. Catalina said it advised ValueAct that its proposal is under consideration by the company's board of directors.
Ensco International Inc.'s (NYSE:ESV - News) fourth-quarter net income rose to $210.4 million, or $1.39 a share, from $103.6 million, or 67 cents a share, a year ago. Earnings from continuing operations for the quarter were $1.36 a share, up from 65 cents a year ago. A Thomson Financial survey of analysts, on average, predicted earnings of $1.29 a share for the quarter. Analysts' estimates usually exclude items. The Dallas provider of contract drilling services said revenue for the quarter rose 51% to $470.6 million from $311.3 million last year. The company is "positive" about its 2007 outlook and expects first quarter results to be improved compared to the fourth quarter.
First Data Corp. (NYSE:FDC - News) said it would exit its official check and money-order operations over two to three years. The wind-down will free up $250 million to $300 million of cash for potential acquisitions, share repurchases and other purposes this year, FDC said.
Friedman, Billings, Ramsey Group Inc. (NYSE:FBR - News) reported a turn back to profit in the fourth quarter on Thursday, although the company today remained solidly in the red for the full year 2006. Friedman, Billings said it earned $3.8 million, or 2 cents a share, reversing a loss of $271.6 million, or $1.60 a share, in the year-ago period. Revenue came in at just under $176 million, vs. negative revenue of $114 million due to an investment loss in the same quarter of 2005. For the full year 2006, Friedman, Billings lost 39 cents a share, compared to a loss of $1.01 a share in 2005.
General Maritime Corp.'s (NYSE:GMR - News) fourth-quarter net income fell 79% on 56% lower revenue, hurt by lower spot charter rates and a smaller fleet.
HealthSpring Inc.'s (NYSE:HS - News) fourth-quarter net income more than tripled to 35 cents from 10 cents in the year-earlier period. The Nashville provider of prescription-drug plans posted revenue of $335.7 million, up from $246.1 million. The company still expects 2007 earnings of $1.55 and $1.65 a share on revenue of $1.5 billion to $1.6 billion.
Hilb Rogal & Hobbs Co. (NYSE:HRH - News) fourth-quarter earnings rose to 59 cents a share from 54 cents in the year-earlier period. Revenue at the Richmond, Va., insurance and risk management intermediary climbed to $175.5 million from $164 million. Lamar Advertising Co.'s board declared a special dividend of $3.25 a share, payable March 30 to shareholders of record March 22.
Industrial Distribution Group Inc. (NasdaqGM:IDGR - News), a maker and distributor of cutting tools and abrasives, said fourth-quarter net income rose 33% to $1.9 million, or 20 cents a share, from $1.5 million, or 15 cents a share, a year earlier. Sales climbed 1% to $131.6 million. Gross margins in the quarter came in at 23% compared to 22.4% in the year-ago period.
J.C. Penney Co. (NYSE:JCP - News) on Thursday said fourth-quarter net income slipped to $477 million, or $2.09 a share, from $551 million, or $2.34 a share, in the year-ago period. On a continuing operations basis, it earned $2 a share vs. $1.92 a year earlier. Total net sales rose to $6.66 billion from $6.2 billion, while sales at stores open at least one year rose 2.2%. Analysts, on average, expected it to earn $1.97 a share on revenue of $6.64 billion, according to Thomson Financial. For the first quarter, Plano, Texas-based J.C. Penney expects to earn 99 cents a share, for the year it is targeting profit at $5.44 a share. Analysts polled by Thomson Financial expect it to earn $1.05 a share for the first quarter and $5.42 for the year.
Monarch Casino & Resort Inc. (NasdaqGS:MCRI - News) shares rose after Standard & Poor's said it will add the company to the S&P SmallCap 600 index on a date to be announced, replacing Advo Inc. (NYSE:AD - News).
Moscow CableCom Corp.: (NasdaqGM:MOCC - News) Renova Media Enterprises Ltd. agreed to acquire the equity in Moscow CableCom that it does not already own for $12.90 a share and an equivalent price for Moscow CableCom's Series A convertible preferred stock.
National Semiconductor (NYSE:NSM - News) was upgraded to overweight from equal-weight by Morgan Stanley. "Following three consecutive quarters with negative surprises, we believe that National Semiconductor's fundamentals will likely bottom in the current quarter. Although we expect the ensuing recovery in fundamentals to be slow and potentially choppy during the next couple of quarters, we expect the company's underlying earnings power to show solid signs of improvement during the next couple of years, and this trend should drive NSM higher," the broker said.
OfficeMax Inc. (NYSE:OMX - News)earned 76 cents a share in the fourth quarter, compared with a loss of 62 cents in the year-earlier period. Excluding items, the office-supply retailer earned 48 cents a share compared with 7 cents. From continuing operations, OfficeMax earned 71 cents. Sales fell to $2.26 billion from $2.46 billion. Analysts, on average, expected it to earn 40 cents on revenue of $2.31 billion, according to Thomson Financial. In the retail segment, sales at stores open at least one year fell 0.4%.
PDL BioPharma Inc. (NasdaqGS:PDLI - News) reported that its fourth-quarter net loss widened to 78 cents a share from 31 cents in the year-earlier quarter. Excluding one-time items, the Fremont, Calif., biopharmaceutical company earned 5 cents a share. Revenue climbed to $107.8 million from $83.7 million. For 2007, PDL forecast earnings of 38 cents to 54 cents a share on revenue of $450 million to $500 million. Wall Street is currently forecasting 64 cents on revenue of $495.7 million.

Published By MarketWatch

Labels: AD, ADI, AEM, AMIE, ARW, CUK, ESV, FBR, FDC, GMR, HRH, HS, IDGR, JCP, MCRI, MOCC, NSM, OMX, PDLI, POS

Summary: Activist investor Carl Icahn recently disclosed a 1.4% stake in Motorola Inc. (NYSE: MOT - News) and set out to force the company to buy back its shares at what he sees as cheap prices. Combined with recent buyouts of Freescale Semiconductor Inc. (NYSE: FSL - News) and Philips Electronics (NYSE: PHG - News), astute investors are eyeing telecom and chip companies with similar cash reserves, which may soon find themselves under the radar of impatient shareholders or buyout firms. Zhiping Zhao of CreditSights: "Both events represent... pressure from shareholders for these companies to return excess cash, as well as optimize capital structure and create shareholder value." Cash represents 19.1% of semiconductor companies' market cap, vs. only 6.1% and 4.9% for consumer and industrial companies -- and chip/telecom equipment companies have little or no debt. He thinks companies like Analog Devices Inc. (NYSE: ADI - News), Linear Technology Corp. (NasdaqGS: LLTC), Maxim Integrated Products Inc. (NasdaqGS: MXIM), Altera Corp. (NasdaqGM: ALTR) Xilinx Inc. (NasdaqGS: XLNX), and Infineon Technologies (NYSE: IFX - News) are potential buyout targets. Companies that could face shareholder pressure to optimize balance sheets and unlock value include Ericsson (NasdaqGS: ERIC), Nokia Corp. (NYSE: NOK - News), Sycamore Networks Inc. (NasdaqGM: SCMR) and Tellabs Inc. (NasdaqGS: TLAB).
Published by SeekingAlpha

Labels: ADI, ALTR, ERIC, FSL, IFX, LLTC, MOT, MXIM, NOK, PHG, SCMR, TLAB, XLNX

Summary: Bears worry an impending recession lies ahead, driven by overleveraged consumers burned by a collapse in home prices, and a huge current-account deficit that bespeaks our lust for consuming more than we produce and spending more than we save. But according to GaveKal, an international research boutique and respected advisor to some of the world's largest companies, the consumer is healthy, the U.S. economy stable, a housing crash improbable, and U.S. stocks are dramatically underpriced despite their current levels. The global economy, it asserts, is on the threshold of a decades-long deflationary boom that will lift America and much of the world to unprecedented prosperity. Its optimism stems from a theory that profound economic changes have and are taking place that have been ignored by most commentators -- specifically a business model it calls the "platform company." Its characteristics:
The platform company outsources low-return, volatile portions of its operations to low-cost manufacturers at home and abroad, focusing its resources instead on value-adding ventures such as R&D. This model seems to be behind the current surge in U.S. corporate profitability: Platform companies have reduced capital-spending needs, which also allows them to slash their debt-service burdens.
For platform companies R&D now dwarfs capital spending: This year the U.S. will spend about $330b on research and development, versus China's $136b. This global change is an "unalloyed good" according to GaveKal: productivity is enhanced, and intellectual property/knowledge is pursued to earn the higher returns that accompany breakthrough products and technologies.
GaveKal is not moved by America's growing account deficit, currently 7% of its GDP: U.S. household net worth stands at $54 trillion and growing at about $3t a year -- far larger and far faster than the $2.5 trillion it owes the rest of the world. Furthermore, trade statistics measure dollars, not profits per sale: The sale in the U.S. of a $700 computer might generate a negative trade balance of $450, because of components from Asian vendors shipped for assembly in the U.S. But the transaction might generate only a $30 profit for the Asian vendors, while high-margin American beneficiaries -- say a Dell system, with Microsoft software and an Intel microprocessor -- might realize a profit of about $250; the U.S. comes out a big winner even though the trade balance says it lost.
It's little wonder that foreigners are willing to finance our trade deficit: America boasts cutting-edge technology, high-margin companies, enviable productivity growth, liquid markets, political stability and strong private-property protection.
A housing market collapse is unlikely; real housing price growth in Ireland, the U.K., Spain, Sweden, France, Australia and the Netherlands have all outpaced that of the U.S. over the past 8 years, and seem none the worse. Barron's: "Optimism is often a tougher sell than bearishness. But based on the trends of the past half-century, GaveKal's argument looks like one worth buying."Highlighted companies: The following companies are cited in the article as being platform companies: Apple Computer Inc. (NASDAQ: AAPL - News), Motorola Inc. (NYSE: MOT - News), Hewlett-Packard Co. (NYSE: HPQ - News), Dell Inc. (NASDAQ: DELL - News), Black & Decker Corp. (NYSE: BDK - News), International Business Machines Corp. (NYSE: IBM - News), Danaher Corp. (NYSE: DHR - News), and Analog Devices Inc. (NYSE: ADI - News)
-SeekingAlpha

Labels: AAPL, ADI, Barron's, BDK, DELL, DHR, HPQ, IBM, MOT