Jim Cramer's Mad Money Review

This site is dedicated towards tracking Jim Cramer's stock picks on his TV show Mad Money. Read about and discuss Jim Cramer's ability to move markets. Be ahead of the stock market. Get the news before its news.

Monday, July 17, 2006

Mad Money Man

How do you know whether a stock that has been going down should be bought or held? There are four questions to ask:
1. How is the stock's sector performing?
2. Is the stock cheap when compared to its peers?
3. How is the stock's management?
4. How does the future look for the stock?

Between Nabors ( NBR) and Ebay (EBAY) which one should be bought and which one should be sold?
NBR passes 3 out of 4 of the questions and EBAY passes only 2 out of the 4 questions. Cramer likes NBR because it's within a good sector, it's cheap, and it has good management. He sees a bright future for this company. On the other hand, EBAY is a dog. It is within a bad sector, it isn't cheap, management is in denial, and the future of the company does not look good.

You must do your own research to avoid losing money. A company's fundamentals are the basic elements. When looking at the fundamentals, which is the better home retailer, Home Depot (HD) or Lowe's (LOW)? Look at:
1. Compare the stocks to the s&p 500, which is the benchmark for stocks, to determine the real price of the stock. Look at its multiple.
  • Both HD and LOW are cheap compared to its benchmark (s&p 500)

2. Compare the future earnings estimates, the growthrate determines its multiple.

  • HD has almost reached its saturation point in this country
  • LOW is better and cheaper because of their growth rate, also LOW's management is better

Lightning Round

Bulls:

SWY

CME

ZZ

OO

NKE

Bears:

CIEN

BWNG

EXP

IRM

MMM

SLM

Gen Electric's (GE) infrastructure is doing well...how can you play that?

Buy:

ABB

CIT

BA

WHR

VAR

Sell:

CMED

HW

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