Jim Cramer Blog

Altria (MO), Bank of America (BAC), Chevron (CVX), Honeywell (HON), Conco-Phillips (COP), Freeport-McMoran (FCX), Schlumberger (SLB), American International Group (AIG), Pfizer (PFE), Cisco (CSCO)
Cramer was disappointed with Dow Jones' facelift which involved getting rid of Altria, and Honeywell, and adding Bank of America and Chevron. Three economic themes Cramer thinks should have been expressed in the Index changes are the growing importance of natural resources, the dwindling power of the financial sector and international growth. None of these themes were reflected in today's choices, Cramer commented. He said a financial should have been removed rather than added to the Dow, COP would have been a better choice than CVX, and would have considered including FCX or SLB in addition to keeping HON. He would have dropped AIG which is a travesty masquerading as an insurance company whose CEO, Martin Sullivan, was recently added to Cramer's Wall of Shame. He would also give Pfizer the pink slip, and would consider adding CSCO, since it is diversified.
Raytheon (RTN)
In spite of Goldman's Sachs note of Early indications of slowing growth in defense spending..., the military budget keeps growing; President Bush is asking for a $515 million for 2009 which is a 7.5% increase. Cramer likes RTN in this space because it has strong international sales, and is up 25% since Goldman's downgrade last March, but he would wait for a pullback before buying.
McDonald's (MCD), Darden (DRI)
One month of data does not justify a bearish position on a restaurant stock, said Cramer, noting McDonald's $6 rise since Bear Stearns hastily downgraded the stock for weak December same store sales (January same store sales increases 5.7%) An even faster kneejerk (or, rather, prejerk) occurred when Darden was downgraded only a few minutes before its better-than-expected guidance was released. The moral of the story, according to Cramer, is that when analysts unfairly downgrade stock on scant data, it is time to buy. Cramer would buy MCD now even though it has risen a bit.
Published By SeekingAlpha

Labels: AIG, BAC, COP, CSCO, CVX, DRI, FCX, HON, Jim Cramer, Mad Money, MCD, MO, pfe, RTN, SLB

Equities continued their march higher after yesterday's Fed-fueled rally as investors continued to find comfort in buying attractive names. At the end of Wednesday's session, all three major market averages finished the session with gains of just over half a percent. Oil, meanwhile, continued to trade higher, ending the session up 42 cents to $81.93 a barrel. Gold also kept on climbing, trading up $5.80 to settle out at $729.50 a troy ounce.
The Labor Department reported today that U.S. consumer prices fell -0.1% in August. Excluding food and fuel prices, which tend to be volatile, prices rose 0.2%, in line with what economists were forecasting. Energy prices fell -3.2%, while prices for medical care rose. In other economic news, the Commerce Department said that housing starts fell to a 12-year low in August. Home starts declined by -2.6% to a seasonally adjusted rate of 1.33 million. Meanwhile, authorized building permits fell by -5.9%. In the past year, overall housing starts are down by -19.1%, while permits have plummeted -24.5%.
On the earnings front, Morgan Stanley (NYSE: MS - News) shares declined -2.2% after the company reported earnings from continuing operations of $1.47 billion, or $1.38 a share, down from $1.59 billion, or $1.50 a share, last year. Revenue rose 13% to $8 billion, despite fixed income and trading revenue falling -3% from year-ago levels. During the quarter, the company said it took a -$940 million loss from the decreased market value of loans on its books, mostly due to the recent turmoil in credit markets. Analysts expected the investment bank to post earnings of $1.54 a share on revenue of $8.35 billion.
Restaurant operator Darden Restaurants (NYSE: DRI - News) posted a 20% rise in second-quarter earnings as sales growth at its Olive Garden and Red Lobster establishments grew. For the quarter, the company earned $105.9 million, or 72 cents a share, up from $88.5 million, or 59 cents a share, in the year-ago period. Earnings from continuing operations, meanwhile, rose to 73 cents a share from 62 cents a share last year. Sales totaled $1.47 billion. Same-store sales increased 7% at its Red Lobster locations and 4.8% at its Olive Garden restaurants. The results sent the share up 1.6% on the day.
Used car seller CarMax (NYSE: KMX - News) saw its shares hit a brick wall after the company slashed its 2008 fiscal-year outlook. The company now sees earnings coming in at a range of 92-98 cents a share, down from its previous range of $1.03-$1.14 a share. The company cited a slower-than-anticipated pace in same-store sales growth. The guidance overshadowed its second-quarter earnings, which came in at $65 million, or 29 cents a share, up from $54.3 million, or 25 cents a share, a year earlier. Revenues rose to $2.12 billion.
General Mills (NYSE: GIS - News), the world's second-largest maker of cereal, posted first-quarter net income of $289 million, or 81 cents a share, compared to $267 million, or 74 cents a share, last year. The 8.2% profit jump was due to price hikes for its products. Sales rose a robust 7% to $3.07 billion. Analysts were looking for revenue of $3.0 billion. The company also affirmed its full-year profit outlook of $3.39-$3.43 a share. Shares gained 0.3%.
By the BullMarket.com Staff

Labels: DRI, GIS, KMX, MS

Here are 7 stocks for traders for Tuesday from TradingMarkets.com:
Adobe Systems (NasdaqGS:ADBE - News) beat earnings on Tuesday afternoon, announcing $0.45 EPS over an expected $0.41 EPS. ADBE's PowerRating (for Traders) is 6.
The European Union announced it had denied Microsoft's (NasdaqGS:MSFT - News) appeal to a negative anti-trust suit, forcing MSFT to pay a $497 million euro fine. MSFT's PowerRating (for Traders) is 4.
AutoZone (NYSE:AZO - News) reports earnings on Tuesday morning, with analysts looking for $3.25 EPS. AZO's PowerRating (for Traders) is 4.
Best Buy (NYSE:BBY - News) should announce $0.44 EPS when the company reports earnings on Tuesday before the bell. BBY's PowerRating (for Traders) is 4.
Kroger (NYSE:KR - News) is looking to report $0.34 EPS on Tuesday morning. KR's PowerRating (for Traders) is 5.
Analysts are watching for Lehman Brothers (NYSE:LEH - News) to announce $1.52 EPS Tuesday before the market opens. LEH's PowerRating (for Traders) is 3.
Watch for Darden Restaurants (NYSE:DRI - News) to report $0.70 EPS on Tuesday morning. DRI's PowerRating (for Traders) is 5.
PowerRatings (for Traders) are courtesy of TradingMarkets.com

Labels: ADBE, Adobe Systems Inc., AZO, BBY, DRI, Hot Stocks, KR, LEH, MSFT

Here are 7 trading ideas for today. These lists come directly from the TradingMarkets Stock Indicators page and are based upon our latest quantitative research.
Bullish
Gaps Down 5% or More: These are stocks that gap down by 5% or more and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that gap down by more than 5% have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Fording Canadian Coal Trust (NYSE:FDG - News). FDG's PowerRating is 6.
Laps Down 5% or More: These are stocks that lap down by 5% or more and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that lap down by more than 5% have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Intel (NasdaqGS:INTC - News). INTC's PowerRating is 6.
5+ Consecutive Down Days: These are stocks that have closed down for five or more consecutive days and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that close down for five or more days have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge. Historically, these stocks have provided traders with a significant edge.
Darden Restaurants (NYSE:DRI - News). DRI's PowerRating is 6.
5+ Consecutive Lower Lows: These are stocks that have made a lower low for five or more consecutive days and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that make lower lows for five or more days have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Tyco International (NYSE:TYC - News). TYC's PowerRating is 6.
2-Period RSI Below 2: These are stocks that have a 2-period RSI reading below 2 and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving with a 2-period RSI reading below 2 have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Pep Boys (NYSE:PBY - News). PBY's PowerRating is 7.
Bearish
5+ Consecutive Up Days: These are stocks that have made a higher high for five or more consecutive days and are trading below their 200-day moving average. Our research shows that stocks trading below their 200-day moving average that make higher highs for five or more days have shown negative returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Las Vegas Sands (NYSE:LVS - News). LVS's PowerRating is 3.
5+ Consecutive Higher Highs: These are stocks that have made a higher high for five or more consecutive days and are trading below their 200-day moving average. Our research shows that stocks trading below their 200-day moving average that make higher highs for five or more days have shown negative returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Ares Capital Corporation (NasdaqGS:ARCC - News). ARCC's PowerRating is 4.
PowerRatings (for Traders) are courtesy of TradingMarkets.com

Labels: ARCC, DRI, FDG, Hot Stocks, INTC, LVS, PBY, TYC

Here are 7 stocks for traders for Tuesday from TradingMarkets.com:
Actuant Corporation (NYSE:ATU) reports earnings on Tuesday morning, with analysts looking for $0.93 EPS. ATU's PowerRating is 5.
When Best Buy (NYSE:BBY) reports earnings on Tuesday before the bell, watch for $0.50 EPS. BBY's PowerRating is 4.
Carnival (NYSE:CCL) should announce $0.47 EPS when the company announces earnings tomorrow morning. CCL's PowerRating is 5.
Analysts are watching for FactSet Research Systems (NYSE:FDS) to announce $0.51 EPS before the bell on Tuesday. FDS's PowerRating is 5.
Progress Software (NasdaqGS:PRGS) is looking to report $0.41 EPS on Tuesday morning. PRGS's PowerRating is 5.
Darden Restaurants (NYSE:DRI) and Clarcor (NYSE:CLC) both report after the close on Tuesday, so watch for heightened price action and volatility ahead of the bell. DRI's PowerRating is 4, and CLC's PowerRating is 5.
PowerRatings (for Traders) are courtesy of TradingMarkets.com

Labels: ATU, BBY, CCL, CLC, DRI, FDS, Hot Stocks, PRGS

The Rail Deal: Koppers (NYSE: KOP), Greenbrier (NYSE: GBX), Trinity Industries (NYSE: TRN), CSX (NYSE: CSX), and Union Pacific (NYSE: UNP)
The rail sector is hot right now, and Cramer suggested finding an "oblique play" like KOP. Although KOP is up 46% since Cramer recommended it, 21 milllion railroad ties will be needed in 2007, and demand is outstripping supply. In addition to producing railroad ties and splitters, KOP is an "impure play" with a chemical business, which is one reason KOP is under the radar while the railroad cycle is on the move. For investors who want a pure rail play, TRN is the largest rail car producer in the U.S. Cramer predicts rail will continue to rise because ethanol requires rail transport, and he adds TRN also makes wind towers. In the past two years, Cramer has seen some "sweet moves" in the sector from CSX and Union Pacific which may be too expensive to buy right now and would purchase some KOP and TRN instead. However, he retracted his recommendation on buying GBX, and said it is not a rail worth owning.

Private Lessons: Darden Restaurants (NYSE: DRI)
Continuing his series of possible private equity takeover targets, Cramer discussed DRI, which owns Red Lobster and the Olive Garden. The company has "massive cash flow" and just enough obstacles, including slow growth, to attract a private equity firm. Cramer predicts DRI could be purchased at a 20% premium, and even if it remains on the shelf, DRI is still good to own because it is a "broken stock" and not a "broken company."
CFO Interview Gary Fayard, Coke (NYSE: KO)
International sales were the cause of KO's blowout quarter, with its emerging market growth in the double-digits and European growth at 11%. Japan is becoming a "critical market" for KO. Fayard explained why there is still time to invest; "We had a great start for the year, but if you look at the market we compete in ... it's growing faster than almost any other consumer area. We still only have 20% share globally. There is still a lot of ways to grow in this industry for us." Cramer said KO should move higher.
Published By SeekingAlpha

Labels: CSX, DRI, GBX, Jim Cramer, KO, KOP, Mad Money, TRN, UNP

Labels: AMZN, DRI, Ebay, Jim Cramer, LU, Mad Money, MRT, NTRI, UNH

Bullish calls:
Schlumberger (NYSE: SLB - News): 'I'm steering people toward SLB.'Transocean (NYSE: RIG - News): ' ... that's the cheapest international driller, now that SLB has run so much. That's a better buy.'Companhia Vale do Rio Doce (NYSE: RIO - News)Allegheny Technologies (NYSE: ATI - News)Wachovia (NYSE: WB - News): 'This is a 4% yielder with decent growth. Good quarter today. You know I like the regional banks. I say it's okay. I prefer BNS.'Bank of Nova Scotia (NYSE: BNS - News): ' I prefer BNS [to WB].'Ford (NYSE: F - News)Marvell Technology (NASDAQ: MRVL - News): 'I am going to recommend - even at the price of perhaps a shortfall near term - MRVL. I think that's one down and 10 up. That's my gift to you.'Charles Schwab (SCHW): 'SCHW's good. ETFC's good. AMTD's good. They all trade more expensively, though, than the full-service brokers.'Ameritrade (NASDAQ: AMTD - News)E*Trade (NASDAQ: ETFC - News)Goldman Sachs (NYSE: GS - News): 'I have been recommending GS. The stock's been down for two days and, you know what? (motions to back up the truck for a 'mon-back) - even that short of time, and I want to buy GS, because I'm using a $300 price target and it's one of my stock picks of the year - my value stock pick...'Johnson Controls (NYSE: JCI - News)Adobe Systems (NASDAQ: ADBE - News): 'I think ADBE is unfairly being brought down. I think ADBE is right here ... I'd like to buy this one for my charitable trust. That's how great I think it is down here ... It's a triple buy. Buy, buy, buy! ... I want you to stay with it.'@Road (NASDAQ: ARDI - News): ' Good speculative play on the net. I like it, I'll endorse it.'Darden Restaurants (NYSE: DRI - News): 'Yes! That's a well-run company!'
Bearish calls:
Talisman Energy (NYSE: TLM - News): 'I don't want to be in TLM. I want to be in RIG.'Zoltek (NASDAQ: ZOLT - News): ' I don't like ZOLT. I think it's played out. We recommended it on this show at $12. When it doubled, we took our profits. And I'm not going back. I do not want to own ZOLT.'Syntax-Brillian (NASDAQ: BRLC - News): 'No can do, my friend. That's like hamburger helper. I'd rather go for the real thing; I'd rather go for the filet mignon [MRVL].'Fuel-Tech (NASDAQ: FTEK - News): 'I like pollution control stories somewhat ... I'm concerned that this is one of those 'State of the Union' plays, where it drops down tomorrow, so let's take profits today.'Visteon (VC)SAIC (NYSE: SAI - News): 'There is a sense that the consulting companies that report to the government for military purposes aren't doing well ... I think that SAI - which I liked a little too much, I now say - is just 'don't buy, don't buy' ... New position for me - new negativity.'Evergreen Solar (NASDAQ: ESLR - News): 'Another one of these (bear)... I am not going to countenance any of these solar plays with energy going down!'Baker Hughes (NYSE: BHI - News): 'BHI has a decent product portfolio, but RIG* is the name of the game ... because it's an international driller. 'Complete Production Services (NYSE: CPX - News): 'No, we're going to RIG.'
Published by SeekingAlpha

Labels: ADBE, AMTD, ARDI, ATI, BNS, BRLC, DRI, ETFC, F, GS, JCI, Jim Cramer, Mad Money, MRVL, RIG, RIO, SLB, TLM, WB, ZOLT

Monday's show was a rebroadcast of a program that first aired on December 28, 2006.
Rule #1: Resisting the Business Cycle, United Health Group (NYSE: UNH - News)
Cramer discussed more rules from his books: Jim Cramer's Real Money: Sane Investing in an Insane World, and Jim Cramer's Mad Money: Watch TV, Get Rich. His first rule deals with the business cycle which is largely controlled by the Federal Reserve's raising and cutting interest rates. When rates are reduced, the economy gets stronger, and investors should buy cyclicals such as "the dirty, smokestack stocks that make things like machinery, cars and minerals." When the Fed raises rates, the economy gets weaker, and it is time to get out of cyclical stocks and into companies that produce consumer staples, such as food and drugs. "You can't own cyclical stocks when the economy stinks, and you should stay away from the consumer staples when the economy's stronger," Cramer said, adding that this applies even if a company has strong fundamentals. He recalls his error of holding on to UNH when the economy picked up, and said that the selloff during the boom was a much bigger factor in the stock's decline than UNH's involvement in an options-backdating scandal.
Rule #2: "Analysts are never bullish enough on good stocks, and ... never bearish enough on bad stocks.": Ebay (NASDAQ: EBAY - News), Amazon (NASDAQ: AMZN - News) and Lucent (NYSE: LU - News)
The reason for the second rule is that analysts covering a stock are dealing with an entire sector for which they must find some stocks that are buys, sells and holds. "The Street will almost always treat a sector that's en fuego as being a lot less en fuego than it actually is," he said. Knowing this, investors can more easily spot which sectors are hot but underappreciated. He noted that this happened with oil stocks during certain times in the past few years when the sector was hot. Even the companies that were neglected or had a "sell" rating went up anyway. It can work the other way too, and Cramer thinks that analysts should have stayed bearish on eBay, Amazon and Lucent for a longer period of time.
Rule #3: Don't Be a Snob, Darden (NYSE: DRI - News), Ruth's Chris Steakhouse (NASDAQ: RUTH - News), Morton's (NYSE: MRT - News)
Because analysts inhabit an upper-class bubble, Cramer says they often miss out on companies that make low-end or mid-grade products. While they can more easily relate to stocks such as RUTH and MRT, most analysts missed out on 50% of Darden's big move between January 2005 and March 2006 because they turned their noses up at Red Lobster and the Olive Garden.
Rule #4 : "Whenever a stock is being heavily shorted and heavily hyped at the same time, it's time to sell that stock," NutriSystem (NASDAQ: NTRI - News)
Hype and a large short interest do not mix, but create a battleground where an investors should fear to tread, and Cramer commented, "You don't do something as risky as shorting a stock unless you're a well-educated investor who has done his or her homework on the thing." One can do research on a stock page on Yahoo or Google finance to see the percentage of shares that are shorted, and a large percentage of shorts indicates that there is a problem the bulls don't know about or do not want to face, as was the case with NTRI, which had problems with its distribution model. "So when all the analysts are having their lovefest with the stock, and you have an army of shorts sitting on the sidelines, you should see a red flag," Cramer said.
Rule #5: "Past performance is not indicative of future success."
Cramer warns viewers not to rely on past successes as a model for future investments, since "stocks have no memory and you could lose big." Investors should aim to make money, but not to feel "invincible" if they do and should avoid following the same patterns. Cramer recommended playing by the rules outlined in his books for successful investing.

Labels: AMZN, DRI, Ebay, Jim Cramer, LU, Mad Money, MRT, NTRI, RUTH, UNH

Bullish calls:
Level 3 Communications(NASDAQ: LVLT - News): ' ... it looks really scary... LVLT issuing 160 million shares after the close? My favorite speculation for 2007... This, my friends, is not scary ... We've been talking about the virtuous circle up ... LVLT remains two thumbs up, way up ... This stock is headed higher.'Eagle Materials (NYSE: EXP - News): 'That is a great company with a gigantic insider buyer, with a phenomenal balance sheet, with a tremendous opportunity for a CX to take it over ... two thumbs up, way up.'Baidu.com (NASDAQ: BIDU - News): 'I have been itching to buy this BIDU, to recommend it on the show... I keep waiting for a down day... It is killing me. I am right now sanctioning a small buy in BIDU right here, praying that it will come down.'Texas Roadhouse (NASDAQ: TXRH - News): 'TXRH has stalled out... I cannot give up on TXRH, but I just can't understand the bear case for TXRH. I say $13 ('mon-back). Let's buy them.'Darden Restaurants (NYSE: DRI - News)McDonald's (NYSE: MCD - News)Res-Care (NASDAQ: RSCR - News): 'it's a disability play ... This is my favorite. And I think you should swap out of the HLS, if you're in that, and get into RSCR which, to me, is best of breed in the field.'CarMax (NYSE: KMX - News): 'There is nothing like the retailing of cars. It is a phenomenal business ... 52-week high again. And I am saying don't ring the register. That is how good KMX is ... Two thumbs up, way up.'Savient Pharmaceuticals (NASDAQ: SVNT - News): 'I prefer Savient over SGEN.'Toyota Motor (NYSE: TM - News): 'Holy cow, it just dropped 15 points. ('mon-back sound). Let's do some buying.'Capital One Financial (NYSE: COF - News): 'The bears keep swarming. I think they'll be wrong. Buy, buy, buy! I want to buy COF.'Best Buy (NYSE: BBY - News): 'They're best in show ... I don't even know why Circuit City (NYSE: CC - News) exists. Julian Day is cutting back the Radio Shacks ... That means wide open field for BBY. The stock has been heading down ... It may be flatlining here and then, when it reports the quarter, it goes up 3 or 4. That's a tough call for me.'Riverbed Technology (NASDAQ: RVBD - News): 'The stock is bouncing back now ... best in show. I want you to stick with it. As a matter of fact, I want you to buy it. Buy, buy, buy!'
Bearish calls:
Corn Products International (NYSE: CPO - News): 'Most of their costs are corn, and corn is going up, up, up ... but they're able to put through a price increase. They just gave you a dividend increase. I've got to tell you, this one is not for me. Don't buy, don't buy. But far be it for me to say sell, sell, sell. They seem to have the costs - even though they're skyrocketing - under control.'HealthSouth (NYSE: HLS - News)Energy Conversion Devices (NASDAQ: ENER - News): 'I cannot - in good conscience - recommend that stock with oil at $51, going to $49. So, I am going to say no, no, no. Sell, sell, sell.'Seattle Genetics (NASDAQ: SGEN - News): 'It's a $300 million company. I cannot get behind it. It's at a 52-week high. I've got a lot of really great biotechs that are well off their high. Don't buy, don't buy.'

Labels: BBY, BIDU, CC, COF, CPO, DRI, ENER, EXP, HLS, Jim Cramer, KMX, LVLT, Mad Money, MCD, RSCR, RVBD, SGEN, SVNT, TM, TXRH

Rule #1: Resisting the Business Cycle, United Health Group (NYSE: UNH - News)
Cramer discussed more rules from his books: Jim Cramer's Real Money: Sane Investing in an Insane World, and Jim Cramer's Mad Money: Watch TV, Get Rich. His first rule deals with the business cycle which is largely controlled by the Federal Reserve's raising and cutting interest rates. When rates are reduced, the economy gets stronger, and investors should buy cyclicals such as "the dirty, smokestack stocks that make things like machinery, cars and minerals." When the Fed raises rates, the economy gets weaker, and it is time to get out of cyclical stocks and into companies that produce consumer staples, such as food and drugs. "You can't own cyclical stocks when the economy stinks, and you should stay away from the consumer staples when the economy's stronger," Cramer said, adding that this applies even if a company has strong fundamentals. He recalls his error of holding on to UNH when the economy picked up, and said that the selloff during the boom was a much bigger factor in the stock's decline than UNH's involvement in an options-backdating scandal.
Rule #2: "Analysts are never bullish enough on good stocks, and ... never bearish enough on bad stocks.": Ebay (NASDAQ: EBAY - News), Amazon (NASDAQ: AMZN - News) and Lucent (NYSE: LU - News)
The reason for the second rule is that analysts covering a stock are dealing with an entire sector for which they must find some stocks that are buys, sells and holds. "The Street will almost always treat a sector that's en fuego as being a lot less en fuego than it actually is," he said. Knowing this, investors can more easily spot which sectors are hot but underappreciated.He noted that this happened with oil stocks during certain times in the past few years when the sector was hot. Even the companies that were neglected or had a "sell" rating went up anyway. It can work the other way too, and Cramer thinks that analysts should have stayed bearish on eBay, Amazon and Lucent for a longer period of time.
Rule #3: Don't Be a Snob, Darden (NYSE: DRI - News), Ruth's Chris Steakhouse (NASDAQ: RUTH - News), Morton's (NYSE: MRT - News)
Because analysts inhabit an upper-class bubble, Cramer says they often miss out on companies that make low-end or mid-grade products. While they can more easily relate to stocks such as RUTH and MRT, most analysts missed out on 50% of Darden's big move between January 2005 and March 2006 because they turned their noses up at Red Lobster and the Olive Garden.
Rule #4 : "Whenever a stock is being heavily shorted and heavily hyped at the same time, it's time to sell that stock," NutriSystem (NASDAQ: NTRI - News)
Hype and a large short interest do not mix, but create a battleground where an investors should fear to tread, and Cramer commented, "You don't do something as risky as shorting a stock unless you're a well-educated investor who has done his or her homework on the thing." One can do research on a stock page on Yahoo or Google finance to see the percentage of shares that are shorted, and a large percentage of shorts indicates that there is a problem the bulls don't know about or do not want to face, as was the case with NTRI, which had problems with its distribution model. "So when all the analysts are having their lovefest with the stock, and you have an army of shorts sitting on the sidelines, you should see a red flag," Cramer said.
"Past performance is not indicative of future success."
Cramer warns viewers not to rely on past successes as a model for future investments, since "stocks have no memory and you could lose big." Investors should aim to make money, but not to feel "invincible" if they do and should avoid following the same patterns. Cramer recommended playing by the rules outlined in his books for successful investing.
Published By SeekingAlpha

Labels: AMZN, DRI, Ebay, Jim Cramer, LU, Mad Money, MRT, NTRI, RUTH, UNH

Arcelor Mittal, (NYSE:MT - News) said Wednesday it's buying Mexico's Sicartsa from Grupo Villacero for $1.44 billion. It's also entered into a 50-50 joint venture with Villacero to distribute Arcelor Mittal's long products in Mexico and the southwestern U.S.
BCE Inc. (NYSE:BCE - News) was upgraded to buy from neutral by Merrill Lynch, which said said the Canadian telecommunications company is pushing its price leadership strategy further and faster than it had expected. The broker told clients this should help offset continuing strong cable phone inroads. Merrill added that while it sees substantial risk that Industry Canada will set aside wireless spectrum for new entrants, it sees offsetting upside, not widely acknowledged, if BCE and Telus Corp. were to integrate their wireless networks in the future.
Bowne & Co. (NYSE:BNE - News) said it's agreed to buy St Ives Financial, a financial printing company, from St Ives . Though Bowne didn't reveal terms, St Ives in its own statement said it will receive $8 million in cash for the business that lost 1.5 million pounds ($2.9 million) in the year ending July 28.
BRE Properties Inc., (NYSE:BRE - News) a real estate investment trust focusing on apartment communities, sees 2007 per-share profit of $1.05 to $1.20 and funds from operations of $2.55 to $2.70.
CarMax Inc. (NYSE:KMX - News) said third-quarter net income rose to $45.4 million, or 42 cents a share, from $22.9 million, or 22 cents a share. Earnings for the third quarter of both years included share-based compensation costs of 3 cents a share, and earnings for the prior year's third quarter included a benefit of 3 cents a share from favorable auto finance items. Net sales rose to $1.77 billion from $1.42 billion. Same-store used unit sales rose 13% in the quarter. Analysts, on average, expected it to earn 25 cents a share on revenue of $1.63 billion, according to Thomson First Call. For the fiscal year ending February 28, 2007, CarMax now expects same-store used unit sales performance in the range of 8% to 9% and raised its earnings per share to a range of $1.75 to $1.85 from $1.55 to $1.65 a share. Analysts polled by Thomson First Call expect it to earn $1.64 a share for the year, on average.
Christopher & Banks Corp. (NYSE:CBK - News) reported third-quarter net income of 24 cents a share, matching both the year-earlier result and analysts' expectations.
Cooper Tire & Rubber Co. (NYSE:CTB - News) named Roy Armes president, chief executive and a director. Armes succeeds Byron Pond, who has served as interim CEO since August.
Darden Restaurants' (NYSE:DRI - News) fiscal second-quarter profit rose 12%, buoyed by restaurant openings and lower expenses at its Olive Garden chain.
Ferro Corp. (NYSE:FOE - News) filed its third-quarter report and became current on its Securities and Exchange Commission filings. Profit for the period fell to $5.5 million, or 12 cents a share, from $6.9 million, or 15 cents, in the year-earlier period.
Ford Motor (NYSE:F - News) was upgraded by KeyBanc to hold from sell, the automaker's second analyst upgrade in as many days. Analyst Brett Hoselton said that while fundamentals aren't expected to show any meaningful improvement in 2007, the earnings deterioration should begin to taper off. Hoselton thinks the implementation of cost cuts, capacity rationalization actions and production cuts will help reduce excessive inventory levels resulting from slowing demand. Meanwhile, he believes Ford's new financing plan will raise borrowing costs and hurt results at its financial services business. As a result, Hoselton increased his 2006 loss estimate to $1.26 a share from 99 cents, and raised his 2007 loss forecast to $1.29 a share from 60 cents.
FPL Group Inc.'s (NYSE:FPL - News) FPL Energy will purchase the Point Beach Nuclear plant in Two Rivers, Wis., its fuel and associated inventories for around $1 billion from Wisconsin Energy Corp.'s (NYSE:WEC - News) Wisconsin Electric Power Co. unit. The companies also entered a long-term agreement under which FPL Energy will sell 100% of the output of Point Beach to Wisconsin Electric Power.
Harrah's Entertainment Inc. (NYSE:HET - News) agreed to be bought by a pair of private equity groups for $90 a share in cash plus assumption of $10.7 billion in debt.
Honeywell (NYSE:HON - News) was upgraded to buy from above average by Caris & Co, which said the company's operating plan through 2008 reflects strong trends for air travel, safety, security, and energy needs. The driving force for demand in Honeywell's aerospace and automation and controls units "will remain well in place in 2008 (and beyond), as commercial aircraft and [business jet] builds continue to advance, flying hours continue to grow, US residential construction revives and non-residential growth extends."
Hydril Co. (NASDAQ:HYDL - News) the maker of oil and gas drilling products, sees fourth-quarter per-share earnings of about $1.05 or higher, above its prior view.
Innovo Group Inc. (NASDAQ:INNO - News) said it has closed around $3.6 million of new equity financing through a private placement. The company said it sold 6.8 million shares at 53 cents a share in the placement, along with warrants to purchase an additional 2.1 million shares at an exercise price of 58 cents a share.
Jack in the Box, (NYSE:JBX - News) expects to accept for purchase 2.3 million, or 6.5%, of its common shares at $61 each under a Dutch-auction tender offer. The company will lay out $142.5 million for the shares.
John H. Harland Company (NYSE:JH - News) agreed to be acquired by M&F Worldwide Corp. (NYSE:MFW - News) for $1.7 billion, or $52.75 a share in cash. The merger is expected to close in the second half of 2007. M&F Worldwide is 38% owned by MacAndrews & Forbes, a company controlled by financier Ron Perelman. M&F Worldwide owns two operating companies, Mafco Worldwide, a maker of licorice products, and Clarke American, a provider of checks, check-related products and direct marketing. Decatur, Ga.-based John H. Harland is a sells printed products and software and related services to the financial institution market, including banks, credit unions, thrifts, brokerage houses and financial software companies.
Kosan Biosciences Inc. (NASDAQ:KOSN - News) announced a license agreement with pharmaceutical giant Pfizer Inc. (NYSE:PFE - News) for its motilin agonist program.
Maxim Integrated Products Inc. (NASDAQ:MXIM - News) said John Gifford, founder and chief executive, will retire for health reasons. Gifford will remain part-time as an adviser.
National City Corp. (NYSE:NCC - News) will buy back as many as 30 million common shares, subject to a limit of $1.2 billion.
NexCen Brands Inc., (NASDAQ:NEXC - News) the New York brand-acquisition and -management company, definitively agreed to acquire the designer-apparel company Bill Blass Holding Co. for $54.6 million plus as much as $16.2 million additional based on the company meeting business targets.
Nordson Corp. (NASDAQ:NDSN - News) fourth-quarter net income was about flat with the year-earlier period. Profit per share rose to 82 cents from 80 cents as shares outstanding fell 2.6%.
Redback Networks (NASDAQ:RBAK - News) agreed to be acquired by Ericsson (NASDAQ:ERIC - News) for $2.1 billion in cash.
Smart Modular Technologies Inc. (NASDAQ:SMOD - News) first-quarter net income rose to 3 cents a share from 17 cents in the year-earlier period. Analysts had expected 21 cents.
Systemax Inc. (NYSE:SYX - News) third-quarter net income tripled from the year-earlier period, to 33 cents a share.
Telus (NYSE:TU - News) was upgraded to buy from neutral by Merrill Lynch, which said concerns over heavy wireline spending and wireless competition are now more than reflected in the share price. The broker told clients that management has trimmed wireless subscriber guidance for 2006, acknowledging increased pressure from discount brands. "We suspect this situation will lead Telus to respond with sharper pricing or promotions but we see no long-term value impairment," Merrill concluded.
Tupperware Brands Corp. (NYSE:TUP - News) named Simon Hemus president and chief operating officer.
WebMethods (NASDAQ:WEBM - News) named Ken Sexton as its chief financial officer, effective Jan. 2. Sexton replaces Mark Wabschall, who announced his plans to retire in September.
-Marketwatch

Labels: BCE, BNE, BRE, CBK, CTB, DRI, F, FOE, FPL, HET, HON, HYDL, INNO, JBX, JH, MFW, MT, RBAK, WEBM, WEC

Here are 7 stocks to watch for today. This list comes directly from the TradingMarkets Stocks Indicators page.
Stocks Ready to Surge: These are the stocks that today made new 10-day lows that are still in an uptrend as they are trading above their 200-day moving average. They are sorted in rank according to how over-extended they are vs. their 10-day moving average. For example, the top ranked stock is trading the furthest distance from its 10-day moving average on a percentage basis. Historically, these stocks on average have had larger than normal short-term upside reversals.
Darden Restaurants (NYSE:DRI - News). DRI's PowerRating is 2.
Low-Priced Stocks Ready to Surge: These are the stocks under $10/share that today made new 10-day lows that are still in an uptrend as they are trading above their 200-day moving average. They are sorted in rank according to how over-extended they are vs. their 10-day moving average. For example, the top ranked stock is trading the furthest distance from its 10-day moving average on a percentage basis. Historically, these stocks on average have had larger than normal short-term upside reversals. Please note: All stocks carry risk and low-priced stocks usually come with even more risk. Always use caution.
Harmonic (NASDAQ:HLIT - News). HLIT's PowerRating is 7.
Pullbacks from Highs: Most successful momentum-based traders and money managers like to buy strong stocks after they pull back. TradingMarkets.com uses a proprietary mathematical model to identify up to 30 (in weak or choppy markets there will be fewer) of the strongest stocks that have pulled back from recent highs. These stocks should be considered potential candidates to resume their longer-term up trends.
Centene (NYSE:CNC - News). CNC's PowerRating is 5.
Long Windows Candidates: These are stocks which are in a strong uptrend, as determined by a proprietary trend filter and whose current bar has its high below the 4-day moving average. Historically, these stock on average have had a larger than normal short-term upside reversals. In order to qualify as a "Trading Window" candidate, we must have a 10-period ADX reading of 30 or higher and a +DI reading above the -DI reading. Or we must have a 14-period +DI of 30 or higher (with no ADX reading required). "Single Windows" are the most common type of Windows. They are simply a single bar which has its high of the day below the 4-period moving average.
Constellation Energy Group (NYSE:CEG - News). CEG's PowerRating is 6.
Stocks Ready to Drop: These are the stocks that today made new 10-day highs that are still in an downtrend as they are trading below their 200-day moving average. They are sorted in rank according to how over-extended they are vs. their 10-day moving average. For example, the top ranked stock is trading the furthest distance from its 10-day moving average on a percentage basis. Historically, these stocks on average have had larger than normal short-term downside reversals.
United Rentals (NYSE:URI - News). URI's PowerRating is 2.
Pullbacks from Lows: Most successful momentum-based traders and money managers like to sell weak stocks after they pull back. TradingMarkets.com uses a proprietary mathematical model to identify up to 20 (in strong or choppy markets there will be fewer) weak stocks that have pulled back from recent lows. These stocks should be considered potential candidates to resume their longer-term downtrends.
Walgreen (NYSE:WAG - News). WAG's PowerRating is 4.
Trading Where the Action Is: This list contains the most volatile stocks over the past 50 trading days. These stocks are only for the most aggressive traders who are willing to assume a high degree of risk in order to capture larger gains.
Jinpan International (NYSE:JST - News). JST's PowerRating is 4.
PowerRatings are courtesy of PowerRatings.net

Labels: CEG, CNC, DRI, HLIT, Hot Stocks, JST, URI, WAG

Here are 7 stocks to watch for today. This list comes directly from the TradingMarkets Stocks Indicators page.
Stocks Ready to Surge: These are the stocks that today made new 10-day lows that are still in an uptrend as they are trading above their 200-day moving average. They are sorted in rank according to how over-extended they are vs. their 10-day moving average. For example, the top ranked stock is trading the furthest distance from its 10-day moving average on a percentage basis. Historically, these stocks on average have had larger than normal short-term upside reversals.
Darden Restaurants (NYSE:DRI - News). DRI's PowerRating is 2.
Low-Priced Stocks Ready to Surge: These are the stocks under $10/share that today made new 10-day lows that are still in an uptrend as they are trading above their 200-day moving average. They are sorted in rank according to how over-extended they are vs. their 10-day moving average. For example, the top ranked stock is trading the furthest distance from its 10-day moving average on a percentage basis. Historically, these stocks on average have had larger than normal short-term upside reversals. Please note: All stocks carry risk and low-priced stocks usually come with even more risk. Always use caution.
Harmonic (NASDAQ:HLIT - News). HLIT's PowerRating is 7.
Pullbacks from Highs: Most successful momentum-based traders and money managers like to buy strong stocks after they pull back. TradingMarkets.com uses a proprietary mathematical model to identify up to 30 (in weak or choppy markets there will be fewer) of the strongest stocks that have pulled back from recent highs. These stocks should be considered potential candidates to resume their longer-term up trends.
Centene (NYSE:CNC - News). CNC's PowerRating is 5.
Long Windows Candidates: These are stocks which are in a strong uptrend, as determined by a proprietary trend filter and whose current bar has its high below the 4-day moving average. Historically, these stock on average have had a larger than normal short-term upside reversals. In order to qualify as a "Trading Window" candidate, we must have a 10-period ADX reading of 30 or higher and a +DI reading above the -DI reading. Or we must have a 14-period +DI of 30 or higher (with no ADX reading required). "Single Windows" are the most common type of Windows. They are simply a single bar which has its high of the day below the 4-period moving average.
Constellation Energy Group (NYSE:CEG - News). CEG's PowerRating is 6.
Stocks Ready to Drop: These are the stocks that today made new 10-day highs that are still in an downtrend as they are trading below their 200-day moving average. They are sorted in rank according to how over-extended they are vs. their 10-day moving average. For example, the top ranked stock is trading the furthest distance from its 10-day moving average on a percentage basis. Historically, these stocks on average have had larger than normal short-term downside reversals.
United Rentals (NYSE:URI - News). URI's PowerRating is 2.
Pullbacks from Lows: Most successful momentum-based traders and money managers like to sell weak stocks after they pull back. TradingMarkets.com uses a proprietary mathematical model to identify up to 20 (in strong or choppy markets there will be fewer) weak stocks that have pulled back from recent lows. These stocks should be considered potential candidates to resume their longer-term downtrends.
Walgreen (NYSE:WAG - News). WAG's PowerRating is 4.
Trading Where the Action Is: This list contains the most volatile stocks over the past 50 trading days. These stocks are only for the most aggressive traders who are willing to assume a high degree of risk in order to capture larger gains.
Jinpan International (NYSE:JST - News). JST's PowerRating is 4.
PowerRatings are courtesy of PowerRatings.net

Labels: CEG, CNC, DRI, HLIT, Hot Stocks, JST, URI, WAG