Jim Cramer Blog

VMware Inc. said Monday its fourth-quarter earnings more than doubled, but revenue missed Wall Street's expectations, and shares of the virtualization software maker tumbled after hours.
The company, which went public last August in one of the tech sector's most highly anticipated IPOs since Google's, posted a profit of $78.2 million, or 19 cents per share, up from $31 million, or 9 cents per share, in the same period a year earlier.
Adjusted earnings, excluding stock options costs and other items, were 26 cents per share in the latest quarter.
Revenue rose 80 percent to $412.5 million from $229.6 million.
Analysts, on average, expected a profit of 24 cents per share on sales of $417.4 million, according to a poll by Thomson Financial. Analyst estimates typically exclude stock options costs.

Labels: VMW, VMware Inc.

A Citi Investment Research analyst said late Wednesday a new virtualization software program from VMware Inc. should help the company enhance its market position.
"We believe this is a significant step towards enhancing VMware's already dominant position in the virtualization industry, and is a pre-emptive strike against future Microsoft and Citrix/Xen releases in the battle for control of the x86 server virtualization market," Brent Thill said in a client note. He kept his "Buy" rating and $134 price target.
VMware's "virtualization" software lets a single computer function like multiple machines, allowing companies to spend less on equipment and energy in their data centers.
At least six computer makers will include the ESX Server 3i software on new servers, helping VMware to continue its 90 percent domination of the market, and also to expand the market to new customers, Thill said.

Labels: VMW, VMware Inc.

The Dow finished down 33 points and the Nasdaq down 63 points on Thursday. Bank stocks like Citigroup (C) and Morgan Stanley (MS) recovered in late trading Thursday. Charlie Gasparino joined the show to discuss his take on the bank stocks. He doesn't think the worst is over for Citigroup. Gasparino next tackled American International Group (AIG). He described how former CEO Hank Greenberg wants to take over AIG and put his people in charge of the insurance giant.
Technology: The four horseman of technology were crushed Thursday, with Apple (AAPL) falling 6%, Google (GOOG) falling 5%, Research In Motion (RIMM) falling 6% and Amazon.com (AMZN) falling 4%. Seymour thinks Cisco Systems (CSCO) looks pretty good here and the firm has moved lots of business abroad. Adami says if you want to play tech look at EMC (EMC) and VMware (VMW).
Speculation made the rounds on Wall Street Thursday that BHP Billiton (BHP) might looking for a new takeover target after Rio Tinto (RTP) rejected BHP's takeover offer. Seymour remarks that potential targets are: Southern Copper (PCU), Freeport McMoRan (FCX), Cameco (CCJ), Potash (POT), Alcoa (AA) and US Steel (X).
Although retailers reported the worst October same-store sales numbers since 1995, Finerman maintains that retail still has some value and companies to consider would be Gymboree (GYMB), Children's Place (PLCE), Kohl's (KSS), Wal-Mart (WMT) and Nordstrom (JWN).
Disney (DIS) profits rose 12% on ESPN and US theme parks. Priceline.com (PCLN) beats third quarter profit expectations and the stock soars 16% after hours. iShares MSCI Emerging Markets Index bucks the market weakness and closes up on the day. First Solar (FSLR) explodes 28%. Najarian has now sold Cypress Semiconductor (CY) into the solar strength. At this point, the solar stocks are beginning to get to over-heated. Adami advises taking profits in Evergreen Solar (ESLR).
Auction house Sotheby's (BID) had major issues selling a quarter of its paintings, including a well known Van Gogh piece that was suppose to fetch $35 million. Finerman tells viewers that when BID doesn't sell these pieces they own them and they now own them at the worst time. She predicts a crack in the art market and BID could get annihilated.
Bidding for Biogen (BIIB) has begun with rumored acquirers Pfizer (PFE), Merck (MRK) and Johnson & Johnson (JNJ) leading the pack.
Pops & Drops
Pops- McDonald's (MCD) traded up 2% after posting a 6.9% increase in October same-store sales.
Monsanto (MON) traded up 4% .
Mobile Telesystems (MBT) 9% and VimpelCom (VIP) jumped 8%.
Procter & Gamble (PG) traded up 2%
King Pharmaceuticals (KG) traded up 14% after posting a quarterly loss.
Restoration Hardware (RSTO) exploded up 140%.
Drops- PetroChina (PTR) fell 6% as the China trade continues to unwind.
Oracle (ORCL) fell 8% as the Nasdaq took it on the chin Thursday.
Final Trade
Seymour is positive about Alcoa (AA).
However, Adami thinks the market will continue to decline and he would play it with Short Dow30 Proshares (DOG).
Finerman recommends Watts Water Technologies (WTS).
Najarian favors Boston Scientific BSX for the options activity he noticed in the device maker on Thursday.
Vig likes EOG Resources (EOG) and Continental Resources (CLR) for plays on oil and natural gas.

Labels: AAPL, BHP, CNBC, CSCO, EMC, Fast Money, Fast Money Recap, GOOG, MS, RTP, VMW

Bullish:
Global Industries (GLBL) – Cramer will not walk away from.
Transocean (RIG) – Is really behind.
Trico Marine (TRMA) – Is not bad.
Core Labs (CLB) – Nothing is better.
FMC (FMC) – Likes as well.
Compellent Tech (CML) – Reminds Cramer of a “mini- VMware.
VMWare (VMW)
Oilsands Quest (BQI) – With the right tax regime in Alberta, there would be some pin action up there.
Novagold (NG) – Could become the depositor of an incredible amount of cheap gold.

Bearish:
Jones Soda (JSDA)- Says no. Sell Jones.
Jamba (JMBA) - Sell
Hansen (HANS) - Sell
Radian Group (RDN) – Does not believe they can raise the capital they need.
Fannie Mae (FNM) – Cramer can not get behind.
Rediff.com (REDF) – Another Baidu.
Countrywide (CFC) – Does not like. Would buy Wells Fargo.
AIG (AIG) – Sell sell sell.
Home Depot (HD) – Rather be in Lowes.
Level 3 (LVLT) – Can’t get CEO on the show.
Old National Bank (ONB) – People are not buying these banks right now.
Superior Offshore (DEEP) – Sticking with Transocean.

Labels: BQI, CLB, CML, DEEP, FMC, GLBL, HANS, HD, Jim Cramer, JMBA, JSDA, Lightning Round, LVLT, Mad Money, NG, ONB, RDN, RIG, TRMA, VMW

Citigroup (C) fell 5% Monday after news of more write-downs and CEO Chuck Prince’s departure. Charlie Gasparino joined the show to give his opinion on Citigroup. He thinks that Citigroup didn’t pop on the news of Prince leaving because Chairman Robert Rubin failed to communicate the new Citigroup vision that everyone on Wall Street was looking for. Macke thinks that Citigroup has to clear the deck and bring in somebody new to run the company.
Chartology: Technical analyst John Roque of Natexis Bleichroeder was on the show to give his analysis on the technical signs in the market. Roque still likes the longer term trend line on the S&P moving average. He predicts that the financials will be under performers for a long time. Roque also points out that the trend for oil, silver and gold remains up and if history is a guide that up trend will continue. He is positive about Newmont Mining (NEM) and thinks the stock can trade into the high $80’s.
Ethanol: Archer Daniels Midland (ADM) is set to report earnings on Tuesday. Najarian tells investors to look to at Deere (DE) and Bunge (BG) instead. Adami would rather be in Potash (POT) for an ethanol play.
IAC/InterActive Corp (IACI) announced plans Monday to split up into 5 separate companies. Also, Kraft (KFT) is looking to sell its Post cereal business for $2.8 billion. Finerman is happy with the news. Macke also likes Kraft's plans, but he wasn’t a big fan of IAC/InterActive’s plans to spin off divisions. Najarian thinks that Johnson & Johnson (JNJ) could benefit from a break up.
Technology: Google (GOOG) announces plans to create an open platform, Android, for the mobile phone market. Sun Microsystems (JAVA) falls after hours on lighter then expected revenue numbers. Macke thinks companies like VMware (VMW) and its technology could put JAVA out of business in the future. Dell (DELL) announced plans on Monday to buy virtualization software maker EqualLogic for $1.4 billion. Activision (ATVI) reports a second quarter profit as revenue soars.
Word on the Street: Time Warner (TWX) CEO Richard Parsons will step down on January 1st and be replaced by Chief Operating Officer Jeffrey Bewkes. Finerman likes the retail stocks better than financials. She bought call options on Friday and Monday on Crocs (CROX) and also thinks Under Armour (UA) and Dick’s Sporting Goods (DKS) are interesting here. PetroChina (PTR) topped $1 trillion in market cap surpassing Exxon Mobil (XOM). Adami likes that Chevron (CVX) preformed okay in a lousy tape today.
Pops & Drops
Pops -First Solar (FSLR) traded up 10% after hours on news of a $1 billion module supply contract.
Marvel Entertainment (MVL) traded up 16% on a strong profits report.
Mattel (MAT) traded up 4%
Ballard Power Systems (BLDP) traded up 12%
WellCare Health Plans (WCG) popped 22% on a 67% increase in profits.
Sysco (SYY) traded up 2% after reporting a 16% rise in profits.

Labels: ADM, ATVI, BG, BLDP, CROX, DE, DELL, DKS, Fast Money Recap, GOOG, IACI, JAVA, JNJ, MAT, MVL, NEM, POT, TWX, UA, VMW

Merrill Lynch (MER)- There was speculation on Wall Street that Stan O'Neal will be removed as CEO and Chairman of the Board over the weekend. CNBC's Charlie Gasparino joined the show to discuss O'Neal leaving. Gasparino says rumors are out that Larry Fink the CEO of BlackRock could be named the new Chairman and the CEO position might be split between Greg Flemming and Bob McCann. Najarian said he still would be a buyer of Merrill and that if O'Neal doesn't go, he expects the stock to go down to $55. However, Macke advocates shorting Merrill when O'Neal leaves.
BEA Systems (BEAS)- Carl Icahn has sent a letter to the board of BEA saying its time to come to the negotiating table with Oracle (ORCL). Rumors are that BEA wants $21 share and Oracle offered $17. The offer is set to expire on Sunday.
Microsoft (MSFT) traded up 15% after profits and revenues handily beat Wall Street estimates. Macke remarks that the earnings were great especially from Microsoft and the shorts are getting crushed. Finerman feels the market is very confusing with tech performing well, but many financial stocks doing poorly. Adami prefers Intel (INTC) here and noted that the Citigroup analyst put a $33 price target on the name. Najarian favors Apple (APPL)
Rate Cut- The crew then discussed how next week the Federal Reserve will meet to decide on interest rates and the jobs report will be released. Najarian thinks that the Fed is going to cut rates and that's why the financials flew Friday. He advocates staying with the good sectors like technology and asset mangers and avoid the rest. Macke and Finerman agree that the jobs number will be the best indicator for the economy.
Crude oil hit another record Friday trading above $92. Adami points out how Exxon (XOM) isn't rallying into record oil prices and suggests the company might miss earnings. XOM has a rich valuation and the price action signals that it may move lower. Adami admits that Exxon scares him in front of earnings. He thinks if Exxon reports bad results, it could take the Dow lower. Finerman mentioned that Kirk Kerkorian's Tracinda is looking to buy 16% of Tesoro (TSO).
Procter & Gamble (PG) is also set to report earnings on Tuesday. Procter is one of Macke's favorite trades in front of earnings. Finerman likes Procter as well and Kraft (KFT) which reports earnings on Wednesday. Manitowoc (MTW) is also set to report on Wednesday, which Najarian is partial to.
Quicker than the Ticker- On October 23rd Najarian said buy Vmware (VMW). He nailed the call and the stock has risen 10%. On September 27th Macke recommending buying Yahoo (YHOO). Macke was right and the stock appreciated 20% since his call. On September 20th Adami said buy Microsoft (MSFT). Adami was on the money and Microsoft killed Wall Street's estimates and traded up 11%.
Fast Fire- On October 5th Macke recommending buying Coach (COH). Macke was way off and Coach fell 21% since his call. On October 15th Najarian favored Broadcom (BRCM). He dropped the ball on BRCM and the stock fell 16% after disappointing earnings. On September 12th Adami said he loved Zimmer Holdings (ZMH). Since his call the stock has dropped 15%. On October 1st Finerman advised investors to buy put options on Garmin (GRMN). The stock has risen 9% since her call and she is now admitting defeat and moving on.
Pops & Drops
Pops - Merck (MRK) traded up 8%.
Goldman Sachs (GS) traded up 8%.
DeVry (DV) exploded up 47%.
Deckers Outdoor (DECK) traded up 34% on strong profits.
Baidu.com (BIDU) traded up 12% after profits more than doubled.
Black and Decker (BDK) popped 18% on strong international sales numbers.
Monster Worldwide (MNST) traded up 12% on strong profits.
Drops - Schering Plough (SGP) fell 7% after missing Wall Street estimates.
WellCare Health Plans (WCG) plunged 73% after the FBI raided their offices.
Final Trade
Macke favors Intel (INTC).
Adami recommends Dell (DELL).
Finerman says short the United States Oil Fund (USO).
Najarian grabs a buy ticket for Baker Hughes (BHI).

Labels: BEAS, BRCM, CNBC, COH, Fast Money, Fast Money Recap, MER, MSFT, PG, VMW, ZMH

VMware, Inc., the virtualization software leader, today announced financial results for the third quarter of 2007:

-- Total consolidated revenues were $358 million, an increase of 90%
compared to the year-ago quarter.
-- GAAP net income was $65 million or $0.18 per diluted share compared to
$19 million or $0.06 per diluted share in the year-ago quarter. GAAP
operating income was $66 million compared to $28 million in the third
quarter of 2006.
-- Non-GAAP net income was $85 million or $0.23 per diluted share.
Non-GAAP operating income was $91 million, which represents 25% of
third-quarter revenues and is an increase of 71% over the year-ago
quarter.
"VMware had a strong quarter by several measures," said Diane Greene, president and chief executive officer of VMware. "Increased customer-adoption of VMware Infrastructure was a significant driver in growing our revenues 90%. We completed our IPO. Our annual VMworld conference drew more than 10,800 attendees, including more than 1,800 people representing our partners. And we introduced four brand new products to the market, including our next-generation server-embedded hypervisor VMware ESX Server 3i."

Labels: VMW, VMware Inc.

EMC Corp. reported a third quarter gain of $115.2 million for selling 6 million shares of VMware Inc. to Cisco Systems Inc., and VMware stock surged Thursday following a strong earnings report.
The Palo Alto-based virtualization software developer (NASDAQ:VMW - News) was spun off from EMC (NYSE:EMC - News), which retains about 87 percent ownership. VMware's stock climbed as much as 10 percent to close Thursday to $114.
On Wednesday, VMware filed its first quarterly earnings report since going public in August, reporting net income of $65 million, or 18 cents a share, on $358 million in revenue. The company's stock has skyrocketed more than 260 percent from its $29 a share IPO price.
EMC sold a 6 million share ownership stake to San Jose-based Cisco (NASDAQ:CSCO - News).
Hopkinton, Mass.-based EMC reported net income of $492.9 million, or 23 cents a share, compared with $283.7 million, or 13 cents a share, in the came period last year.
Revenue rose to $3.29 billion from $2.82 billion a year ago.
Published October 25, 2007 by the Silicon Valley / San Jose Business Journal

Labels: EMC, EMC Corp., VMW, VMware Inc.

Technology
Najarian noted that Hewlett- Packard (HPQ) hit a 52-week high Monday and Research In Motion (RIMM), IBM (IBM) and VMware (VMW) all traded higher. Stacey Gilbert of Susquehanna Financial Group prefers Google (GOOG) whose call options are very active on the name. Najarian agreed and mentioned the Google December $750 calls were active on Monday. Other option notes: Najarian noticed some very unusual options activity in TJX Companies (TJX) on Monday, seeing 10,000 October $30 calls trade and also stepped-up activity in the November $30 calls. Macke predicts a big winner with TJX.
Keith O'Malley, a trader with Hold Brothers, came on the show to discuss his trading ideas. He declares that the Fed is done cutting interest rates. He likes Cisco Systems (CSCO) and Fluor Corp (FLR).
CEO's
Gasparino joined the show again to discuss his thoughts on CEOs who could lose their jobs. Gasparino gave out odds for how likely Chuck Prince, Jimmy Cayne and Stan O'Neal will lose their jobs. Prince is CEO of Citigroup (C), Cayne runs Bear Stearns (BSC) and O'Neal heads up Merrill Lynch (MER). He gave Prince 2-1 odds, Cayne 6-1 and O'Neal 10-1. Gasparino also said that John Thain, CEO of NYSE Euronext (NYX), is a candidate for CEO of Citigroup. CEO of Sprint Nextel (S) Gary Forsee has left the telecommunications firm. Sprint is a takeover stock with Chinese companies being possible buyers.
Word on the Street
Yum! Brands (YUM) traded higher Monday. Macke: 41% of sales came from China and recommends investors to buy the stock here.
Aeropostale (ARO) traded lower. You can sell retailers ahead of the numbers, according to Macke.
CTC Media (CTCM), Central European Media (CETV) and Cemex (CX). Seymour found these value names in the emerging markets. Seymour is committed and long CX.
Alcoa (AA): scheduled to report earnings Tuesday after the bell. Gilbert sees better plays in the titanium makers like RTI International (RTI) and Titanium Metals (TIE). Gilbert owns TIE.
China
The Shanghai Index has gone up a whopping 300% in the past 5 years. The Communist party will try to control the rise in food prices and make comments on the income gap between the wealthy and poor in the region. Seymour suggests buying dips in the iShares FTSE/Xinhua China 25 Index (FXI) on any negative headlines.
Pops & Drops
Pops- Research In Motion (RIMM) traded up 4%. Has more room to go higher.
Valero (VLO) traded up 4% after Citigroup upgraded the stock. Seymour: A sell into the upgrade.
AK Steel (AKS) popped 11% after settling a lawsuit.
Apple (AAPL) traded up 4%. Macke: buy some stock of the iPhone maker.
China Digital TV (STV) exploded higher by 41%.

Drops- Ryder Systems (R) fell 7% after missing profit estimates.
Freeport McMoRan (FCX) dropped 2% as copper prices fell on Monday.
LDK Solar (LDK) plummeted 26% after Barron’s ran a negative story on the Chinese solar play.
Final Trade
Macke: recommends McDonald's (MCD)
Gilbert: feels positive about Titanium Metals (TIE).
Seymour: sell Banco Itau (ITU).
Najarian: likes ValueClick (VCLK).

Labels: CNBC, CSCO, Fast Money, Fast Money Recap, FLR, GOOG, HPQ, IBM, RIMM, TJX, VMW

Bullish:
VMware (VMW)- Cramer thinks you should take half off the table
KB Home (KBH)- Cramer would rather own the senior debt than the common shares.
Hewlett-Packard (HPQ)
Xoma (XOMA)- Buy at $3 and sell it at $5.
Texas Instruments (TXN)- thinks it goes to $40.
Apple (AAPL)- Buy instead of microsoft
Nastech Pharmaceutical (NSTK).

Bearish:
Microsoft (MSFT)- it can't gather momentum no matter what it does
Dell (DELL)- Hewlett-Packard is better
Occidental Petroleum (OXY)- take some of your profits out of the stock.
Isis Pharmaceuticals (ISIS).

Labels: AAPL, HPQ, Jim Cramer, KBH, Lightning Round, Mad Money Lightning Round, NSTK, TXN, VMW, XOMA

Stocks rose out of the gate, but were unable to hold gains as profit takers emerged after last week's solid market gains. Leading the decliners were banks, while tech shares held up relatively well. At the close, the Dow Jones lost -61 points, while the Nasdaq lost -3 points and the S&P fell -8 points. Over in the energy patch, crude eased -67 cents to finish at $80.95 a barrel.
Factory workers at General Motors (NYSE: GM - News) walked off the job on Monday after a contract negotiation deadline passed. The company failed to reach a new labor agreement with the United Auto Workers (UAW). GM is seeking to cut labor and healthcare costs after a string of billion dollar losses the past several years has left the automobile giant looking for ways to cut expenses. GM shares declined -1.2%.
Mining giant BHP Billiton (NYSE: BHP - News) saw its shares rise 4.7% after it was reported that the company is close to announcing that it has uncovered what is potentially the largest gold resource in the world at its Olympic Dam mine in Southern Australia. The report was made public by the Herald Sun.
In deal news, Abu Dhabi National Energy Company agreed to buy Canada's PrimeWest Energy Trust (NYSE: PWI - News) for $2.4 billion plus the assumption of debt. Today's deal marks the sixth acquisition for Saudi based Abu Dhabi since November. The deal, valued at $4 billion, represents a premium of 34% over where PrimeWest shares ended on Friday. The deal would give Abu Dhabi National daily production of more than 61,000 barrels of oil and gas equivalent.
Elsewhere, Australian-based Sims Group agreed to buy Metal Management (NYSE: MM - News) for $1.6 billion in stock to create the world's largest publicly traded scrap-metal recycler. The deal is valued at an 18% premium to where Metal Managements shares ended last week. The combined company would have total pro forma sales of $6.8 billion.
In tech news, shares of ValueClick (NYSE: VCLK - News) rose 7.4% after rumors circulated that the marketing company may be a takeover target. Elsewhere, EMC (NYSE: EMC - News) notched a 52-week high after several Wall Street analysts offered upbeat views of the storage maker, noting that the stock was a "buy" due to EMC's large stake in virtualization maker VMware (NYSE: VMW - News), which it spun off as an IPO about two months ago.
In other corporate news, commercial airline giant AMR (NYSE: AMR - News) tumbled -14.4% after the company reported in a regulatory filing that it expects passenger revenue from its mainline and regional carries to rise in a range of 3.7-4.7%. The rise is below many of its rivals.
By Mike Conte, BullMarket.com

Labels: AMR, BHP, EMC, GM, MM, PWI, VCLK, VMW

Bullish Calls: CME Group (CME): Cramer referred to CME as a "coiled spring" that will go up after it announces earnings. EMC (EMC): EMC's stock price isn't reflecting the value of VMware (VMW), but Cramer thinks it will in about 6 months. Cramer thinks Freeport-McMoRan (FCX) is the best stock in the copper sector. Parker-Hannifin (PH): Cramer thinks this stock is a winner. Burlington Northern (BNI): Cramer likes the rail sector, but he thinks Union Pacific (UNP) is a better play than BNI. Texas Instruments (TXN): Cramer thinks this is a good company to own. Goodyear Tire (GT): Cramer likes this better than Michelin, but he would rather be in oil service plays rather than oil consumers. Rosetta Resources (ROSE): Cramer says to "pull the trigger." Sears Holdings (SHLD): Cramer says to hold it if you already own the stock, and to stay away if you are thinking about buying.Bearish Calls:Delta (DAL): Cramer said, "I don't want to own any airline here," because he thinks oil is going higher. Alpha Natural Resources (ANR): Cramer is staying away from the coal sector until new carbon dioxide regulations are passed. Cramer says stay away from Peru Copper (CUP).

Labels: ANR, BNI, CME, CUP, DAL, EMC, FCX, GT, Jim Cramer, Lightning Round, Mad Money, ROSE, SHLD, TXN, UNP, VMW

VMware, Inc., the virtualization leader, today announced the first annual VMworld Europe conference will be held in Palais des Festivals et des Congres, Cannes, France from 26th-28th February 2008. The event will showcase the continual innovation and thinking that is changing the way that organisations around the world are building, deploying and managing their IT infrastructures. It will also provide a platform for visitors to interact with the customers, partners and technologists who are shaping the industry.
VMworld Europe 2008 will follow similar format as the VMworld conference in the US, the world's largest virtualization event, and is expected to attract customers, partners, researchers, academia, press and analysts from around Europe, the Middle East and Africa. The event will also incorporate VMware TSX Europe, the company's annual technical symposium, making it ideal for attendees of all levels of experience in virtualization; from business decision-makers to technical experts and systems architects.

Labels: VMW, VMware Inc.

Shares of virtualization software maker VMware Inc. continued to climb Wednesday after an analyst raised the stock's 12-month target price to $90 from $60.
Shares rose $2.55, or 3.3 percent, to reach $79.20 in morning trading. The stock touched a new all-time high of $82.75 on Tuesday.
VMware's software lets a single computer function like multiple machines, allowing companies to spend less on equipment and energy in their data centers.
In a note to investors, Caris & Co. analyst Shebly Seyrafi raised the company's 12-month target price, citing new developments that demonstrate strong acceptance of VMware's products and a validation of virtualization software.

Labels: VMW, VMware Inc.

Stocks staged a broad-based rally as investors speculated that consumer demand will help aid the economy. At the close, all major market averages ended the day with strong gains. The price of Gold continued to rise, ending up $8.90 to $721.10 an ounce.
OPEC said it would increase oil production by 500,000 barrels of oil a day as they believe near record oil prices would damage the world economy. The increase in output will mostly be led by Saudi Arabia. This is the first production increase by OPEC in more than a year. Oil prices were nevertheless up 74 cents to $78.23 a barrel.
Shares of McDonald's (NYSE: MCD - News) rose 3.2% after the burger giant reported an 8.1% same-store sales increase for the month of August. In the U.S., the world's largest restaurant chain said same-store sales grew 7.4% fueled by breakfast and new food and beverage offerings. Its European business also experienced a 6.1% rise in store sales growth buoyed by summertime offerings. In its Asia/Pacific, Middle East and Africa region, the company said sales surged 12.4% helped by extended hours and new menu promotions. The company noted that sales were particularly robust in China, Japan and Australia. Subscribers can read our analysis of McDonald's in today's issue.
Biotech firm Imclone Systems (Nasdaq: IMCL - News) pleased investors today after a study released by Germany's Merck KGaA said that Imclone's Erbitux prolonged the survival of lung cancer patients. The drug is used to treat colon cancer, in addition to head-and-neck cancer. Shares surged 18%. Sepracor (Nasdaq: SEPR - News) and GlaxoSmithKiline (NYSE: GSK - News) agreed to team up on Sepracor's insomnia drug Lunesta. Under the terms of the agreement, Glaxo will commercialize the drug in markets outside the U.S., while Sepracor stands to receive an initial payment of $20 million, plus subsequent milestone payments that could total up to $155 million. Additionally, Sepracor will receive double-digit royalties that will increase in line with sales and compensation. The drug is currently under review by the European Union, where a decision is expected in the second half of 2008.
In tech news, VMware (NYSE: VMW - News) struck a deal to acquire Swiss based Dunes Technologies, a maker of virtualization management software. Financial terms of the deal were not disclosed. Storage maker Western Digital (NYSE: WDC - News) upped its first quarter sales and profit forecast based on strong demand for hard disk drives. For the current quarter, the company now sees EPS reaching 61-65 cents, excluding charges related to its recent acquisition of Komag. Its previous forecast was for EPS of 43-47 cents a share. The company also noted that gross margins are expected to improve to 17.5%. Shares advanced 4.4% on the news.
In earnings news, video game maker Take-Two Interactive (Nasdaq: TTWO - News) reported a narrower-than-expected loss for its third quarter. The company lost -$58.5 million, or -81 cents a share, compared to a loss of -$91.4 million, or -$1.29 a share in the same period a year ago. Excluding items, loss was -$46.1 million, or -64 cents a share versus the loss of -67 cents per share expected by analysts. Sales fell to $241.2 million, but beat estimates for revenue of $200.6 million. For the fourth quarter Take-Two expects a loss of -20 to -25 cents a share on revenue of $275-300 million.
By The BullMarket.com Staff

Labels: GSK, IMCL, MCD, SEPR, TTWO, VMW, WDC

True Value: Aircastle (NYSE: AYR - News) Genesis Lease (NYSE: GLS - News)
Cramer suggested buying value stocks in the wake of the selloff. He defines a value stock as one which is down 20% from its 52-week high and pays a minimum of 3% in dividends. Such stocks are cheap because hedge fund managers have recently been forced to sell "good companies with broken stocks." A high dividend stock should do well if the Fed continues to cut rates. Cramer's first value pick was AYR, which owns and leases jets and was sold off in June by investors worried about the credit crisis. Cramer notes the COO has bought 2,000 shares and comments insiders "only buy for one reason: They think their company's stock is going up."He also suggested value play GLS, which is down 15% since Cramer recommended it, but has $1.2 billion in capital and a dividend at 8.2%.
EMC (NYSE: EMC - News), VMware (NYSE: VMW - News)
Cramer also touted momentum stocks as a way of dealing with the current economic climate, and recommended looking at the new high list. He predicted a significant upside for EMC, up just 3% after it spun off VMW, a stock that has risen to $70 from its initial public offering of $19. He added EMC trades at only 11 times next year's earnings, but recommended waiting for a bit before buying.

Sell Block: Boeing (NYSE: BA - News), ConocoPhillips (NYSE: COP - News), Terex (NYSE: TEX - News), Caterpillar (NYSE: CAT - News), Air Product & Chemicals (NYSE: APD - News), Energizer Holdings (NYSE: ENR - News), XTO Energy (NYSE: XTO - News)
Cramer revisited his $80 to $120 stocks he covered in July, admitting that he "misjudged the market" now that the S & P is down 4.5%. He still likes BA, down 3.3% since his recommendation, as well as COP, TEX and CAT. Cramer says APD has pricing power, given the paucity of chemical companies, ENR is good but a bit expensive and prefers XTO to other energy companies.
Mad Mail: Omniture (NasdaqGM: OMTR - News), Apple (NasdaqGS: AAPL - News), Countrywide Financial (NYSE: CFC - News), Bank of America (NYSE: BAC - News), Crocs (NasdaqGS: CROX - News)
Cramer predicts OMTR is going to $30 and says Apple is "going to be terrific." The CFC "play is over" and the curtain is rising for BAC. He feels Crocs is "on a mission" and recommends listening to the conference call.
Published By SeekingAlpha

Labels: AAPL, APD, AYR, BA, BAC, CAT, CFC, COP, CROX, EMC, ENR, GLS, Jim Cramer, Mad Money, OMTR, TEX, VMW, XTO

Wells Fargo (NYSE: WFC - News), Countrywide Financial's (NYSE: CFC - News), Washington Mutual (NYSE: WM - News), Bank of America (NYSE: BAC - News), Wachovia (NYSE: WB - News)
Thursday's dash for financials may indicate the sector will be one of the "long-term beneficiaries" of Bernanke's position, but Cramer does not think they are safe. He tacked a double sell on WM but thought BAC and WB could survive. However, he reserved the lion's share of his praise for WFC, and said, "It is the great speculative play that should prosper." He believes WFC will "own the mortgage market" and will win with investors because it offers a great dividend. Cramer would wait for WFC to drop to the $32 - $34 range.
Sell Block: VMware (NYSE: VMW - News), H&R Block (NYSE: HRB - News), Capital One Financial (NYSE: COF - News), Friedman Billings Ramsey Group (NYSE: FBR - News) Lamson & Sessions (NYSE: LMS - News), Six Flags (NYSE: SIX - News)
Cramer urged investors to "stay the course" and added "no one ever made a dime panicking." However, he added it isn't too late to sell minerals and he feels tigher consumer spending will put pressure on retail. Cramer would sell VMW after its highly successful IPO, and would stay away from HRB, COF and FBR. He would also sell LMS as well as SIX because of low attendance due to the weather. He concluded it is better to invest in long-term stocks rather than quick trades in the current environment.
KKR Financial (NYSE: KFN - News), Thornburg Mortgage (NYSE: TMA - News) and Reynolds American (NYSE: RAI - News)
Not all high dividends are good dividends, Cramer declared and used KFN and TMA as examples. He added high-dividend names KFN and TMA aren't worth the investment because as their stocks fall so will the yields. Cramer likes RAI which has a dividend of 5.5% and is a "smart play" in this environment because "nothing is more defensive than cigarettes."
Mad Mail: Bear Stearns (NYSE: BSC - News), Jones Soda (NasdaqCM: JSDA) and Google (NasdaqGS: GOOG - News)
Cramer would avoid BSC and JSDA whose climb was "how to make a million" in the market. He adds GOOG is safe and likes the tech sector for its pristine balance sheets and great products.
Published by SeekingAlpha

Labels: BAC, BSC, CFC, COF, FBR, GOOG, HRB, Jim Cramer, KFN, LMS, Mad Money, RAI, SIX, TMA, VMW, WB, WFC, WM

HMS Holdings (NasdaqGS: HMSY - News): 'We've always liked this. This is one of those companies ... that do cost control for medical.'MedcoHealth Solutions (NYSE: MHS - News)Cardinal Health (NYSE: CAH - News)AT&T (NYSE: T - News)EMC (NYSE: EMC - News): 'I think that EMC is a better way to play VMware right now.'Intuitive Surgical (NasdaqGS: ISRG - News): Freeport-McMoran (NYSE: FCX - News): 'This is a gold company and a copper company in a deflationary spiral mandated by the Federal Reserve. ... Am I backing away from it? No. ... I will say bull to Freeport.'First Solar (NasdaqGM: FSLR - News)Exelon (NYSE: EXC - News): 'Well-run ... can do well. ... I say two thumbs up to Excelon/'Hawaiian Elect