Mad Money Man
Tonight's show started off with Cramer comparing Boeing (BA) and Airbus. BA is the company to bet on. In 2005, BA beat Airbus' orders by 55%. The key here however is not Boeing (BA) but the companies who supply them. There is a list of three petential companies that could profit: Triumph Group Inc. (TGI); Heico CP (HEI); and Moog Inc. (MOG-A). Also don't be alarmed by the critics of Boeing, the failure to meet demand will not hurt them.
Cramer also dedicated a segment of the show to his favorite hotel chain Hilton Hotels (HLT). Hilton takes pride in their all suite hotels, catering to the upscale demography. They run 2,388 properties making HLT the biggest hotel chain. However, in the past years it lacked the potential to grow because they could not build internationally. Now, since they bought out the other Hilton, it places them on the international map. They have huge growth potential all over the world. This news is not good enough though, homework should still be done before diving in to such a stock. The numbers must be looked at. In this case, the numbers hold true. Competition can't keep up with HLT. They have a 37 % gross margin blowing the other competition out of the water. Hilton uses their exceptional business model to make money. They use their name to make money. Bottom line: buy HLT.
Lightning Round
Bulls:
TE
GS
MATK
SO
VCP
MSFT long term
DEO
TLAB
SGMS
PGR
PRU
MET
HAL
BAC
C
PDC
NKE
Bears:
USNA
SONS
GERN
NTRS
SHOO
Making Sense of the market
Why do the big investment banks trade at 8X earnings and the online discount brokers trade at 16X earnings? The answer is that investors think discount brokers are the thing of the future. Investors think that investment banks and discount brokers are in the same business. THe truth is that they are in very different businesses. Investment banks deal with institutional trading, which is a very expensive and competitive business. Discount brokers deal with your average investor. People need to realize that investment banks are still part of the present and will be part of the future. They are changing from their cyclical roots and becoming secular. The reason investment banks are making so much money is because they are prime brokerages. In layman's terms, investors give the bank custody of their accounts and the bank turns these accounts over and lends money to short sellers. They are leveraged to hedge fund growth. The banks make mad money off the interest from the loans.
Bottom line: Although discount brokers like Ameritrade (AMTD), Charles Schwab (SCHW), etc. are good buys especiallyAMTD, don't think investment banks are a thing of the past. Banks such as: Goldman Sachs (GS), Lehman Bros (LEH), and Bear Stearns (BSC) should be trading at the same earnings per share. Capitalize while Wall Street doesn't is in the dark.
Cramer concluded his show by talking with the CEO of Darden Restaurants (DRI). They are the largest casual dining chain in the world with 1,390 restaurants. These restaurants include: Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones, etc. This company has a lot of room for growth since they do not franchise domestically. Their 2005 sales were $5.3 billion, quarter 4 (Q4) net income of $92.3 million or $.60 eps today. Bottom Line: Pull the trigger right hear and pick up some shares.
posted by Stock Administrator @ 7:04 PM
Mad Money Man
Tonight's show started off with Cramer comparing Boeing (BA) and Airbus. BA is the company to bet on. In 2005, BA beat Airbus' orders by 55%. The key here however is not Boeing (BA) but the companies who supply them. There is a list of three petential companies that could profit: Triumph Group Inc. (TGI); Heico CP (HEI); and Moog Inc. (MOG-A). Also don't be alarmed by the critics of Boeing, the failure to meet demand will not hurt them.
Cramer also dedicated a segment of the show to his favorite hotel chain Hilton Hotels (HLT). Hilton takes pride in their all suite hotels, catering to the upscale demography. They run 2,388 properties making HLT the biggest hotel chain. However, in the past years it lacked the potential to grow because they could not build internationally. Now, since they bought out the other Hilton, it places them on the international map. They have huge growth potential all over the world. This news is not good enough though, homework should still be done before diving in to such a stock. The numbers must be looked at. In this case, the numbers hold true. Competition can't keep up with HLT. They have a 37 % gross margin blowing the other competition out of the water. Hilton uses their exceptional business model to make money. They use their name to make money. Bottom line: buy HLT.
Lightning Round
Bulls:
TE
GS
MATK
SO
VCP
MSFT long term
DEO
TLAB
SGMS
PGR
PRU
MET
HAL
BAC
C
PDC
NKE
Bears:
USNA
SONS
GERN
NTRS
SHOO
Making Sense of the market
Why do the big investment banks trade at 8X earnings and the online discount brokers trade at 16X earnings? The answer is that investors think discount brokers are the thing of the future. Investors think that investment banks and discount brokers are in the same business. THe truth is that they are in very different businesses. Investment banks deal with institutional trading, which is a very expensive and competitive business. Discount brokers deal with your average investor. People need to realize that investment banks are still part of the present and will be part of the future. They are changing from their cyclical roots and becoming secular. The reason investment banks are making so much money is because they are prime brokerages. In layman's terms, investors give the bank custody of their accounts and the bank turns these accounts over and lends money to short sellers. They are leveraged to hedge fund growth. The banks make mad money off the interest from the loans.
Bottom line: Although discount brokers like Ameritrade (AMTD), Charles Schwab (SCHW), etc. are good buys especiallyAMTD, don't think investment banks are a thing of the past. Banks such as: Goldman Sachs (GS), Lehman Bros (LEH), and Bear Stearns (BSC) should be trading at the same earnings per share. Capitalize while Wall Street doesn't is in the dark.
Cramer concluded his show by talking with the CEO of Darden Restaurants (DRI). They are the largest casual dining chain in the world with 1,390 restaurants. These restaurants include: Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones, etc. This company has a lot of room for growth since they do not franchise domestically. Their 2005 sales were $5.3 billion, quarter 4 (Q4) net income of $92.3 million or $.60 eps today. Bottom Line: Pull the trigger right hear and pick up some shares.
Cramer also dedicated a segment of the show to his favorite hotel chain Hilton Hotels (HLT). Hilton takes pride in their all suite hotels, catering to the upscale demography. They run 2,388 properties making HLT the biggest hotel chain. However, in the past years it lacked the potential to grow because they could not build internationally. Now, since they bought out the other Hilton, it places them on the international map. They have huge growth potential all over the world. This news is not good enough though, homework should still be done before diving in to such a stock. The numbers must be looked at. In this case, the numbers hold true. Competition can't keep up with HLT. They have a 37 % gross margin blowing the other competition out of the water. Hilton uses their exceptional business model to make money. They use their name to make money. Bottom line: buy HLT.
Lightning Round
Bulls:
TE
GS
MATK
SO
VCP
MSFT long term
DEO
TLAB
SGMS
PGR
PRU
MET
HAL
BAC
C
PDC
NKE
Bears:
USNA
SONS
GERN
NTRS
SHOO
Making Sense of the market
Why do the big investment banks trade at 8X earnings and the online discount brokers trade at 16X earnings? The answer is that investors think discount brokers are the thing of the future. Investors think that investment banks and discount brokers are in the same business. THe truth is that they are in very different businesses. Investment banks deal with institutional trading, which is a very expensive and competitive business. Discount brokers deal with your average investor. People need to realize that investment banks are still part of the present and will be part of the future. They are changing from their cyclical roots and becoming secular. The reason investment banks are making so much money is because they are prime brokerages. In layman's terms, investors give the bank custody of their accounts and the bank turns these accounts over and lends money to short sellers. They are leveraged to hedge fund growth. The banks make mad money off the interest from the loans.
Bottom line: Although discount brokers like Ameritrade (AMTD), Charles Schwab (SCHW), etc. are good buys especiallyAMTD, don't think investment banks are a thing of the past. Banks such as: Goldman Sachs (GS), Lehman Bros (LEH), and Bear Stearns (BSC) should be trading at the same earnings per share. Capitalize while Wall Street doesn't is in the dark.
Cramer concluded his show by talking with the CEO of Darden Restaurants (DRI). They are the largest casual dining chain in the world with 1,390 restaurants. These restaurants include: Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones, etc. This company has a lot of room for growth since they do not franchise domestically. Their 2005 sales were $5.3 billion, quarter 4 (Q4) net income of $92.3 million or $.60 eps today. Bottom Line: Pull the trigger right hear and pick up some shares.
posted by Stock Administrator @ 7:04 PM
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