Jim Cramer Blog

The Fed Gets a Clue: Kellogg (NYSE: K - News), Schlumberger (NYSE: SLB - News), Kimberly-Clark (NYSE: KMB - News), Fannie Mae (NYSE: FNM - News)
Commenting on the Fed announcement, Cramer said, "What we got was, frankly, what we needed, and we rallied." The Fed decided to allow the interest rate to remain at 5.5%, a move Cramer says shows the Fed "may be heartless, but its not clueless." He predicts the Fed is heading towards a rate cut, which he thinks will happen in October. He also detected a hint at government intervention to solve the housing crisis, and Cramer thinks the Treasury Secretary or the President may ask Fannie Mae to help relieve some of the credit pressure. In the meantime, Cramer would buy defensive stocks such as K, SLB and KMB and would concentrate on oil, agriculture and infrastructure.
Getting Defensive: Unilever (NYSE: UN - News)
Cramer likes UN as a defensive stock to depend on in down times, because it a major producer of packaged foods, is international and therefore unaffected by US credit problems, and has a generous 3.6% dividend cushion. In addition, nearly a third of its sales come from emerging countries; "It's a play on people getting richer around the world," Cramer said. Since the stock has risen a bit, Cramer suggests letting it drop a few points before buying.
CEO Interview: Doron Gerstel Syneron Medical Ltd. (NasdaqGS: ELOS - News)
Cramer was puzzled that Syneron, which reported 52% US growth and 21% European growth, got hammered after its phenomenal quarter. The company also has a deal with Procter & Gamble to develop a non-invasive skin product and a fat remover. The mystery was solved when Cramer spoke with CEO Doron Gerstel who commented that everyone is jumping on the "aesthetic bandwagon; The main concern the market has is that it's looking at the competition, and more and more companies are doing initial public offerings," he said. "They're worried about saturation in the sector." Cramer commented this may be a cause for serious concern and suggested holding off buying ELOS until it becomes clear whether or not the company will be pressured by new IPOs.
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Labels: ELOS, FNM, Jim Cramer, K, KMB, Mad Money, SLB, UN

Doomsday Scenario: MDC Holdings (NYSE: MDC - News), DR Horton (NYSE: DHI - News), Pulte Homes (NYSE: PHM - News) and Toll Brothers (NYSE: TOL - News)
Cramer created a doomsday scenario which probably will not happen, since the bank crisis in 1990 was "ten times worse" than the problems of today. However, he would avoid any companies which deal with borrowing and lending money, particularly housing: DHI, PHM and TOL. The only housing stock that isn't hopeless now is MDC, but Cramer would still not buy. He would also avoid financials amid bearish fears that loans will not be repaid and yields will shrink; "You can't own anything that even walks by a mortgage," Cramer warned. He would not touch companies which need financing for deals. However, Cramer added; "the worst-case scenario will be derailed," and the doom and gloom will not really materialize
If Ben will Budge: Centex (NYSE: CTX - News), Lennar (NYSE: LEN - News), Bear Stearns (NYSE: BSC - News), Goldman Sachs (NYSE: GS - News), Citigroup (NYSE: C - News)
Cramer discussed two scenarios which could reverse doomsday: overseas buyers and an interest rate cut. He is confident that if the Federal Reserve reduces rates by only one percent, housing will make a comeback (especially DHI, PHM, CTX, LEN), financials GS and C will recover and the Dow will jump to 15.
Playing it Safe: Celgene (NasdaqGS: CELG - News), Kellogg (NYSE: K - News), Schlumberger (NYSE: SLB - News), Medco Health Solutions (NYSE: MHS - News), Kimberly-Clark (NYSE: KMB - News), Amazon.com (NasdaqGS: AMZN - News), Google (NasdaqGS: GOOG - News), Apple (Other OTC: APPL.PK - News) and Research in Motion (NasdaqGS: RIMM - News)
Even if the Fed doesn't budge rates, investors can still create a safe portfolio consisting of CELG, K, SLB, MHS and KMB. He also directed viewers to his six wild bull markets: oil and oil services, agriculture, machinery, aerospace, infrastructure and minerals, and his four horse men of tech: AMZN, GOOG, APPL and RIMM.
Mad Mail: Brookfield Asset Management (NYSE: BAM - News), Rite Aid (NYSE: RAD - News), ValueClick Inc. (VLCK)
Cramer urged a mailer not to sell BAM, because it is an international company, unaffected by subprime woes, and is similar to Warren Buffet's Berkshire Hathaway; "If you sold Warren Buffet because of a housing problem, forget it!" To a mailer concerned about RAD, Cramer said, "The integration is going very well. I'm holding your hand on RAD, and begging you not to sell it." Concerning VLCK's bad quarter, he commented, "I don't have my arms around it yet. To me, the stock looks like it's going to see $18, before you see a bottom."
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Labels: AAPL, AMZN, BAM, BSC, CELG, CTX, DHI, GOOG, GS, Jim Cramer, K, KMB, LEN, Mad Money, MDC, MHS, PHM, RIMM, SLB, TOL

Bull Meat Barbecue
Although Thursday's selloff resembled a "bull meat barbecue," Cramer encouraged viewers not to lose heart and reiterated his principle that there is always a bull market somewhere. He made a checklist of three kinds of stocks to avoid: Stocks, such as housing, which need low interest rates to go higher, stocks (restaurants, retail etc.) with too much leverage to the domestic economy, and companies which must borrow to make an acquisition. Cramer emphasized the importance of selling these stocks, especially for those who did not lighten their portfolios before the selloff and those who cannot take the pain and wait for these sectors to recover.
Game Plan for Next Week: Pepsi (NYSE: PEP - News), Colgate (NYSE: CL - News), Kellogg (NYSE: K - News), Kimberly Clark (NYSE: KMB - News), Caterpillar (NYSE: CAT - News), Foster-Wheeler (NasdaqGS: FWLT - News), Freeport McMoRan (NYSE: FCX - News), Schlumberger (NYSE: SLB - News), Halliburton (NYSE: HAL - News), Boeing (NYSE: BA - News), Bunge (NYSE: BG - News), Monsanto (NYSE: MON - News), Dell (NasdaqGS: DELL - News), Hewlett-Packard (NYSE: HPQ - News), Cisco Systems (NasdaqGS: CSCO - News), Celgene (NasdaqGS: CELG - News), Merck (NYSE: MRK - News), Medco Health (NYSE: MHS - News)
Because on The Street, a trauma does not usually follow a trauma, Cramer expects a bounce at least by Monday, and would get rid of financials, retail and restaurants and buy soft goods, such as PEP, CL, K and KMB. Dismissing worries of a potential worldwide slowdown, Cramer likes machinery and mining, particularly CAT, FWLT and FCX. He also recommends oil, although natural gas has been tricky, and his picks are SLB and HAL. Cramer's favorites among aerospace and agriculture include BA, BG and MON, and he adds the tech sector has been hot and would buy DELL, HPQ and CSCO. In the healthcare sector, he especially likes CELG and MHS and doesn't mind MRK.
Pscyhed Up with Sycamore Networks (NasdaqGM: SCMR - News)
After the selloff devastation, there is still one thing Cramer can count on; that tech will continue to thrive in the late summer as it does every year. Cramer likes SCMR as a speculative telecom tech stock, since the company has almost a pure play on optical services. SCMR is not best-of-breed, but he is still bullish because SCMR does not yet have any analysts covering it and he likes SCMR's floor; it's at $4 a share but has the equivalent of $3.23 a share. In addition, the company's sales have been rising and 60% of its revenue is international. While SCMR is not as strong as Cisco or Cienna it could make investors more money.
Mad Money: Hoku Scientific (NasdaqGM: HOKU - News), Genzyme (NasdaqGS: GENZ - News), Celgene (NasdaqGS: CELG - News)
When a mailer asked about Hoku, Cramer recalls having recommended it at $6, and it has recently dropped from $11 to $8. At this level, Cramer says, it is too speculative, but he thinks it will repeat its upward trend after it falls back to $7 or $6. Another mailer wanted to know Cramer's opinion of GENZ; while the fall is good for biotech in general, he prefers Celgene to GENZ. On the issue of whether Freeport McMoRan's report of strong cash flow will be good for Caterpillar, Cramer says he likes CAT, but it has been hit hard for its North American exposure. While he says CAT is "your best play" he adds currently he is "loathe to buy more."
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Labels: BA, BG, CAT, CELG, CL, CSCO, DELL, FCX, FWLT, HAL, HPQ, Jim Cramer, K, KMB, Mad Money, MHS, MON, MRK, PEP, SLB

Stocks moved modestly to the downside today on profit taking in the wake of Friday's strong advance despite the announcement of big merger deals in the banking and biotechnology sectors. Oil prices also rose sharply, topping $65 a barrel in New York trading as traders reacted to instability in Nigeria following national elections in the oil-producing nation that opponents claim were rigged in the government's favor. The 10-year Treasury note moved higher to begin the week.
Today's news was dominated by M&A activity. As anticipated, Britain's Barclay's (NYSE: BCS - News) announced that it has agreed to acquire Dutch bank ABN Amro Holdings (NYSE: ABN - News) for just over $91 billion. As part of the deal, ABN Amro said it would sell its Chicago-based LaSalle National Bank subsidiary to Bank of America (NYSE: BAC - News) for $21 billion. Proceeds from that sale will be distributed to shareholders of the combined banks after the sale is concluded. The offering price is slightly below last Friday's close, but represents a more than 30% premium over the price ABN shares were trading at when the talks began.
The Barclay's-ABN combination will create the world's fifth-largest bank and world's largest institutional asset manager. The two companies had been locked in exclusive negotiations for the last month. Recently, Barclay's rivals Royal Bank of Scotland and Santander Central Hispano (NYSE: STD - News) sought to offer their own bids of ABN. The Dutch bank said it favors Barclay's offer, but has not ruled out a competing bid should one arise. The other banks want to see details of the LaSalle transaction before deciding whether to proceed with bids of their own.
In other merger news, Britain's AstraZeneca (NYSE: AZN - News) said it would buy biotech MedImmune (Nasdaq: MEDI - News) for $15.2 billion, or $58 a share, which is a 21% premium over Friday's closing price. MedImmune's board had put the company up for sale under pressure from major shareholders. Its top products include the FluMist influenza treatment and Synagis, a treatment for respiratory problems in infants, and it has a solid pipeline of drugs in development. MedImmune's shares rose 17.8% on the news. Subscribers may read our take on this deal and its implications for other pharmaceutical and biotechnology companies in today's edition.
In earnings news, Kimberly Clark (NYSE: KMB - News), which makes Kleenex tissue and other paper products, said its Q1 profit jumped 70% on strong sales growth and cost cutting. Revenue rose 8%. The company, however, also noted that rising pulp prices could impact future results. Its shares declined -1.2%. Like other companies with significant overseas sales, Kimberly Clark's results were aided by the weak U.S. dollar, which makes its products cheaper overseas.
Novartis (NYSE: NVS - News) reported an 11% increase in first-quarter earnings. Its profit rose to $2.17 billion, compared with $1.96 billion in the same quarter last year. Strong sales of its hypertension drug Diovan and its leukemia treatment, Gleevec, helped to fuel an 18% increase in revenue to $9.8 billion. Shares of toymaker Hasbro (NYSE: HAS - News) added 7.7% after the company reported a profit of nearly $33 million, or 19 cents a share, for the quarter that ended April 1st, compared with a loss of -$4.9 million, or -3 cents per share, in last year's comparable period.
By the BullMarket.com Staff

Labels: ABN, AZN, BAC, BCS, HAS, KMB, MEDI, NVS, STD

Here are 7 stocks for traders for Monday from TradingMarkets.com:
Arch Coal (NYSE:ACI) reports earnings on Monday before the bell; watch for $0.16 EPS. ACI's PowerRating is 8.
Hasbro (NYSE:HAS) is expected to report $0.00 (flat) EPS on Monday before the market opens. HAS's PowerRating is 5.
When Kimberly-Clark (NYSE:KMB) announces earnings on Monday morning, be looking for $1.01 EPS. KMB's PowerRating is 5.
When L-3 Communications (NYSE:LLL) reports earnings before the bell Monday, watch for $1.28 EPS. LLL's PowerRating is 4.
Analysts are watching for Novartis AG (NYSE:NVS) to report $0.82 EPS before the market opens on Monday. NVS's PowerRating is 5.
Boston Scientific (NYSE:BSX) and Texas Instruments (NYSE:TXN) both report earnings after the bell on Monday, so watch for heightened price action and volume ahead of the close. BSX's PowerRating is 4, and TXN's PowerRating is 5.
PowerRatings are courtesy of PowerRatings.net

Labels: ACI, BSX, HAS, Hot Stocks, KMB, LLL, NVS, TXN

Getting Defensive: Kroger (NYSE: KR - News), Safeway (NYSE: SWY - News), Supervalu (NYSE: SVU - News), Colgate-Palmolive (NYSE: CL - News), Kimberly-Clark (NYSE: KMB - News)
"Subprime is the only problem," Cramer reassured investors after the "absolutely brutal" downturn on Tuesday which affected the whole market. While mortgage lenders should be suffering from subprime lending woes for awhile, Cramer remarks, "It is wrong for the Street to be so indiscriminate ... before we damn the whole market, let's remember what were damning." However, this widespread decline provides a buying opportunity in defensive sectors, such as food, drugs and utilities, sectors which historically perform well when housing is doing badly. Cramer suggests looking at KR, SWY, SVU, CL and KMB, but only after three days, since "the future on the commodity that has captured stocks -- the S&P 500 -- expires Friday, so I expect very little upside in this group until Monday."
Thank You for Smoking: Altria (NYSE: MO - News), Altria's When-Issued Shares MO-WI (MOWI), Kraft (NYSE: KFT - News), General Mills (NYSE: GIS - News), Kellogg (NYSE: K - News), Sara Lee (NYSE: SLE - News)
"There's nothing more defensive than cigarettes," says Cramer who recommends Altria's when-issued shares, MO-WI, which are comprised of pure Philip Morris stock without the Kraft spinoff. Cramer comments Philip Morris is best-of-breed and the MO-WI shares offer a higher dividend. He suggests buying before March 30th when MO-WI will rejoin Altria. Although Cramer doesn't dislike KFT, he prefers food stocks GIS, which has been "doing fabulously," K and SLE, which have more "consistent and exciting growth" than KFT.
Dow Chemical (NYSE: DOW - News), Alcoa (NYSE: AA - News), BHP Billiton (NYSE: BHP - News), and Companhia Vale do Rio Doce (NYSE: RIO - News)
Cramer admits he has been waiting since February for DOW and AA to dip after takeover rumors which were printed a British newspaper. While he discourages speculation on potential buyouts if the fundamentals are not strong, "the fundies for both DOW and AA are pretty good." According to the rumors, Dow could be purchased by private equity firms at $60 a share, a substantial premium from its present rate of $42.94. He notes the company has a 3.5% dividend yield, has been raising prices and cutting costs. There is talk that BHP and RIO are eyeing AA at $40 billion, or $40.68 a share, while its current price is $32. The companies need the extra smelting capacity, and Cramer comments aluminum should perform better than it has been. "Buy Dow and Alcoa because when there's smoke, there's fire."
CEO Interview: Brian Roberts, Comcast (NasdaqGS: CMCSA) with Verizon (NYSE: VZ - News)
Cramer asked Brian Roberts if Comcast raised its capital expenditure in order to compete with rival Verizon, and he replied, "We upped our spending because people are buying our new products in record numbers. We're selling 50,000 phone subscriptions a week." This 30% increase "costs some money," although Roberts added these expenses will not interfere with Comcast's buyback plan; "We have bought back almost 10% of stock in the last two-and-a-half years, and we're going to continue buying back stock," Roberts said. Cramer would pull the trigger on Comcast and referred to Roberts as "money in the bank."
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Labels: AA, BHP, CL, DOW, GIS, Jim Cramer, K, KFT, KMB, KR, Mad Money, MO, RIO, SLE, SVU, SWY, VZ

Kimberly-Clark (NYSE: KMB - News)
Cramer discussed Prudential's upgrade of consumer products, and picked KMB as his favorite stock in the sector, because KMB had been planning for oil to be at $70 in 2007, and with oil prices falling, the company is a buy. He prefers consumer goods to tech noting that investors sell these stocks as soon as they make money, since they know it is time to "bolt from tech."
Eaton (NYSE: ETN - News), Johnson Controls (NYSE: JCI - News), Bank of America (NYSE: BAC - News)
Task pointed out that Eaton was hurting cyclicals and Cramer annointed JCI as a "sainted cyclical" which is a good stock to own "If you want a cyclical and you don't want it to have anything to do with trucks." Cramer doesn't consider the stock a real cyclical because of its air conditioning component. Concerning the Fed, Cramer doesn't think that it will cut interest rates until there is a drop in year-over-year commodity prices. Cramer is critical of bears who don't see that there can be growth without a lot of inflation, and predicts that there will be a temporary slump until mid-year when the Fed will cut rates, and that there will be a resulting upturn until the end of the year. Because the market is "heading into a valley," Cramer says that tech is too hard to own right now, but that stocks like KMB and BAC are not too difficult.
Published by SeekingAlpha

Labels: BAC, ETN, JCI, Jim Cramer, KMB

Citigroup (NYSE: C - News): On the news that Citigroup finance chief Sallie Krawcheck will become CEO of the bank's wealth management unit, Cramer commented that the only thing that will make him bullish is the departure of CEO Chuck Prince. "Prince leaving is worth 5 (points), and a breakup of the bank is worth 2." He added that Citigroup needs a banker, not a lawyer and would like to see Wells Fargo's Richard Kovacevich, "America's greatest banker, or JP Morgan's Jamie Dimon fill the position.
Kimberly-Clark (NYSE: KMB - News), Eaton (NYSE: ETN - News), Cummins Engine (NYSE: CMI - News): Cramer is bullish on KMB since analyst estimates of the stock are based on crude oil at $70 a barrel and not on the recent $51. He added that, given the lackluster numbers from ETN and CMI, the stocks should be lower; 'There's ETN slapping you in the face like a day-old fish from Chinatown, saying 'listen, trucking is bad...' And CMI just kind of stands there.'
American Express (NYSE: AXP - News) and Texas Instruments (NYSE: TXN - News): Cramer feels good about Monday's market with AXP at the head of the pack in the financial sector. He sees nothing more than a tech trade from "merchant of doom" TXN's postclose numbers.
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Labels: AXP, C, CMI, ETN, Jim Cramer, KMB, TXN

Here are 7 options to watch for today. This list comes directly from the TradingMarkets Options Indicators page. The list is created using OptionVue options analysis software.
Most Under Priced Calls: These are the most under priced calls of all stocks in our database. While the Equities Explosion List finds groups of calls for individual equities that are under priced, this list finds the most under priced individual calls. Thus, the options listed here will tend to be more severely under priced.
Intuitive Surgical Jan 100 Calls (NASDAQ:ISRG - News). ISRG's PowerRating is 6.
Most Under Priced Puts: These are the most under priced puts of all stocks in our database. While the Equities Explosion List finds groups of puts for individual equities that are under priced, this list finds the most under priced individual puts. Thus, the options listed here will tend to be more severely under priced.
Harman International Industries Jan 100 Puts (NYSE:HAR - News). CME's PowerRating is 6.
Most Overpriced Calls: These are the most overpriced calls of all stocks in our database. While the Equities Implosion List finds groups of calls for individual equities that are overpriced, this list finds the most overpriced individual calls. Thus, the options listed here will tend to be more severely overpriced.
Google Inc. Feb 510 Calls (NASDAQ:GOOG - News). ACL's PowerRating is 5.
Most Overpriced Puts: These are the most overpriced puts of all stocks in our database. While the Equities Implosion List finds groups of puts for individual equities that are overpriced, this list finds the most overpriced individual puts. Thus, the options listed here will tend to be more severely overpriced.
Diamond Offshore Drilling Jan 75 Puts (NYSE:DO - News). GOOG's PowerRating is 6.
Stocks with Abnormal Call Volume: These are stocks which showed unusual call option volume not easily explained by arbitrage operations. The appearance of a stock on the Call Volume Alerts list suggests a possible takeover, extraordinarily good earnings report, or other news which may favorably affect the stock.
Kimberly Clark Corporation (NYSE:KMB - News). GE's PowerRating is 5.
Stocks with Abnormal Put Volume: These are stocks which showed unusual put option volume not easily explained by arbitrage operations. The appearance of a stock on the Put Volume Alerts list suggestsan extraordinarily negative earnings report, or other news which may negatively affect the stock.
Cablevision Systems (NYSE:CVC - News). NKE's PowerRating is 5.
Abnormal Put/Call $ Volume: These stocks have the highest dollar put volume in relation to their call volume. These high ratios are indicative of extreme bearish sentiment in the underlying stock.
Lennar Corporation (NYSE:LEN - News). BZH's PowerRating is 4.
PowerRatings are courtesy of PowerRatings.net

Labels: CVC, DO, GOOG, HAR, ISRG, KMB, LEN, stock options