Jim Cramer Blog

Exxon (XOM), Conco-Phillips (COP), Schlumberger (SLB), Ultra Petroleum (UPL), Apache (APA), Anadarko (APC), XTO Energy (XTO), Arch Coal (ACI), Peabody Energy (BTU), First Solar (FSLR), Applied Materials (AMAT), MEMC Electronics (WFR), Mosaic (MOS), Deere (DE), CSX (CSX), Chicago Bridge and Iron (CBI), Jacobs Engineering (JEC), Shaw Group (SGR)
Contrary to popular belief, retail did not cause the rally in the Dow and the Nasdaq, but the culprit was oil, which is the umbrella that makes everything work. Not only did oil stocks like XOM, COP and SLB do well, but Cramer says oil will fuel other stocks the energy sector such as UPL, APA, XTO, ACI and BTU, as well as alternative energy plays FSLR (which reported a better-than-expected quarter and historically fabulous upside guidance), AMAT and WFR. Cramer considers ag stocks as members of the energy sector, given the development of ethanol, and would look at MOS, DE. He added rail such as CSX, and infrastructure, CBI, JEC and SGR will also rise with the oil umbrella.
Conviction Stock: FMC Corp (FMC)
A rally one day may spell a down day the next, and it is hard to know what a stock is really worth in this mad market, said Cramer. He was looking for a conviction stock which could give a little bit of certainty about what it was worth, and came up with FMC, a soda ash company in an underexposed sector which is currently enjoying a silent bull market. Soda ash is used to make glass, brick, water softener and most importantly, agricultural chemicals. Cramer says he feels certain that FMC will reach $70, a 30% upside.

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Labels: ACI, AMAT, APA, APC, BTU, CBI, COP, CSX, DE, FSLR, JEC, Jim Cramer, Mad Money, MOS, SGR, SLB, UPL, WFR, XOM, XTO

On Thursdays show, Cramer talked about the confusion in the markets, and how you should be looking to invest in companies that can control their own destiny and have strong customers. Cramer thinks that Quanta Services (PWR) is a stock that fits this profile. He said it is an infrastructure play, they have a large backlog, and they bought one of their major competitors in August, so they have less competition now. Cramer does not think this is the time to make a trade into this stock, but he thinks it will make money over the longer term.
After that Cramer went to the phonelines. The first caller asked if now is the time to buy transportation infrastructure stocks, and Cramer recommended Chicago Bridge and Iron (CBI), plus told the caller to watch for another pick later in the show. The next caller asked about Mueller Water (MWA), and Cramer said that he likes Tetra Tech (TTEK) instead because he thinks Mueller is poorly run. Third caller asked about Shaw Group (SGR) since it has dropped so much recently, and Cramer said that it is a strong company that is coining money, so you should stick with it.
Cramer's other big infrastructure recommendation, Aecom (ACM). He has a bullish position on the stock since the stock is off $9 from his 52 week high. Its biggest customer is the federal government so it knows it will get paid, and one of its biggest competitors was just bought out. Cramer has been promoting the stock for several months now, and the stock has gone up since his initial recommendation.
Sell Block: Cramer started off by talking about private equity, specifically Blackstone (BX) and Fortress (FIG). Cramer said he does not understand how these companies work, therefore doesn't want to invest in them. He's putting the entire sector in the Sell Block, including companies like Cerberus that are not public, but are considering an IPO.
The CEO of California Pizza Kitchen (CPKI) was on the show to talk about their growth plans and how they plan to contain their costs. Cramer said that although the restaurant business is difficult, the stock is near a 52 week low and it is a well run company. He wants you to do some homework and take a look at the stock.
Sudden Death: He was bearish on every stock mentioned. They were Coeur d'Alene Mines (CDE), Tata Motors (TTM), Build a Bear Workshop (BBW), Gerdau Ameristeel (GNA), and Hansen Medical (HNSN).

Labels: BBW, CBI, CDE, CPKI, GNA, Jim Cramer, Mad Money, Mad MOney Recap, MWA, PWR, SGR, TTEK, TTM

Lehman Brothers (NYSE: LEH), Goldman Sachs (NYSE: GS), Bear Stearns (NYSE: BSC), Gilead (NasdaqGS: GILD), Hologics (NasdaqGS: HOLX), Medco Health (NYSE: MHS), Cisco (NasdaqGS: CSCO), Level 3 (NasdaqGS: LVLT), Garmin (NasdaqGS: GRMN), Ciena (NasdaqGS: CIEN), Chicago Bridge and Iron (NYSE: CBI), Allegheny Tech (NYSE: ATI)
Cramer called LEH, GS and BSC "premium franchises" and would "load the boat up." He feels LEH has been given unfair estimate cuts and GS trades at a price-to-earnings multiple not worthy of even a "crummy plastics company." He also likes Gilead, Hologics, which he recently purchased, and Medco Health, which rose $3 on a federal contract and dropped down again. Other picks include Cisco, "the biggest percentage gainer in the S&P," LVLT, a "speculative fave," Ciena and Garmin. Finally, Cramer added CBI and ATI, his 2006 stock of the year, to the list. However, he would buy none of these picks if the four-and-a-halfs of 5/17 or the Bellweather bond continues its descent. It moved down from $100 to $94 on Thursday, and a lower price means a higher yield and a more attractive bond market. However, if it increases to $96-$97, Cramer would still be bullish on the above-mentioned stocks.
The Soda Ash Wars: FMC Corp. (NYSE: FMC)
Rumors the Chinese government is considering an end to tax rebates for their soda ash exporters is good news for FMC, which is the second largest producer of soda ash, a substance used to make such diverse items as glass, cleansers, film and bricks. However, Cramer emphasizes this is just a rumor, and would buy the stock down, since it has dipped since its recent spike. FMC uses a cheaper production process than that of the Chinese, it has pricing power because it is part of a cartel, and its agricultural chemical business is "incredibly strong," says Cramer.
Major Miner: Sterlite Industries
Sterlite, which will trade under the symbol SLT, is India's largest mining company, has "steroidal growth," and has China close by as a huge consumer. Sterlite has a 42% market share in copper, along with some aluminum, and is part of an "unfair" zinc duopoly. Cramer likes privatized companies like Sterlite because the government doesn't want "the deal to blow up in their voters' faces, so they're all priced below what they should be." He suggests buying the stock at a discount, since he expects it to go up, and sets the maximum entry point at $14 with an exit point at $20.
CEO Interview: Gary Butler, Automatic Data Processing (NYSE: ADP)
Gary Butler discussed ADP's the recent $2 billion spinoff of its brokerage business which leaves "a faster growth business, which is very focused and which we think will give us a tremendous return on management." He added; "We operate in a huge market where there is $80 billion of opportunity between the U.S. and globally, so we think the appreciation for our shareholders will be much stronger." With its consistent cash surplus, ADP will continue its buybacks and dividend increases, said Butler and when Cramer asked if ADP would go private, Butler said he would prefer to return value to shareholders rather than to private equity firms; "When you have a company that grew EPS 25% last year and will be over 20% this year ... and you can continue to grow the share price, I think we can deliver more long-term value by staying the course," Butler said.
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Labels: ADP, ATI, BSC, CBI, CIEN, CSCO, FMC, GILD, GRMN, GS, HOLX, Jim Cramer, LEH, LVLT, Mad Money, MHS