Jim Cramer's Mad Money Review

Buy ArvinMeritor (ARM) Jim Cramer said on CNBC's "Stop Trading!" segment Tuesday.
"I've been recommending that for a very long time," Cramer said of the auto parts company. "It's an American comeback story." He also recommended Borg Warner (BWA), which he said "has been really amazing."
Cramer said of Precision Castparts (PCP) that, up 9 points today, it's "not done." He also said that although Alcoa (AA) is a "gigantic user of energy," the company "can put through price increases." He also said he likes U.S. Steel (X), saying "It will not quit."
Cramer said that MasterCard (MA) and Apple (AAPL) appear unstoppable.
Legg Mason (LM) posted its first-ever loss today, sending shares down. Cramer said, "You can deliver bad performance... and people just yawn." He said that today Legg Mason showed "horrible performance."
Cramer also praised NYSE Euronext (NYX) CEO Duncan Niederauer for guiding the company to success. It announced soaring profits today on heavy trading volume. "This stock is just beginning at last. ... The model works," Cramer said.
Published By TheStreet.com

Labels: AA, AAPL, ARM, BWA, Jim Cramer, LM, MA, NYX, PCP, Stop Trading, X

Wall Street stumbled through a lopsided session Wednesday, closing mixed as profit warnings and news from blue chip names Alcoa Inc. and Boeing Co. dragged down the Dow Jones industrial average but largely spared technology stocks.
A pullback was to be expected after the Dow and the Standard & Poor's 500 index finished at new highs Tuesday amid enthusiasm over comments from Federal Reserve policymakers about interest rates, but corporate news appeared to hasten Wednesday's slide.
Declines by Dow components Boeing and Alcoa, among others, hurt the 30-stock index. Meanwhile, International Paper Co. and Chevron Corp. moved lower on profit news.
With investors thumbing through fresh quarterly results and corporate announcements, the latest economic readings did little to dislodge the dichotomy between blue chips and tech stocks. A report showed inventories among U.S. wholesalers ticked up in August, while a trade group for real estate agents warned the drop in sales of existing homes this year will be steeper than had been expected.
The stock market's uneven but still relatively calm trading Wednesday followed a surge the day before that was sparked by release of the minutes from the Fed's last meeting. Wall Street initially was ebullient that the Fed didn't appear to rule out further rate cuts but, on reflection, some investors seemed to be questioning whether that response was a little too optimistic.
Source: Tim Paradis, AP Business Writer

Labels: AA, BA, COST, CVX, IP, Wall Street

Woodward Governor (NasdaqGS: WGOV - News): 'That's in the bull market of aerospace. It's in the bull market of infrastructure.'Caterpillar (NYSE: CAT - News)Sears Holdings (NasdaqGS: SHLD - News): 'Everybody's decided ... it's too hard ... am not giving up on Eddie Lampert. Let everyone else give up. I am not. I'm with him.'Toyota Motor (NYSE: TM - News): 'Long term, Toyota's the winner. ... In 2010, this company's going to own the world. Now, if you can't take the pain between now and 2010, by all means, go buy a mutual fund.'Macy's (NYSE: M - News): 'They've all given up on Macy's. ... Me? I don't know. Terry Lundgren's pretty good. .... I'd rather pull the trigger. I'd rather run toward what looks like a house of pleasure.'
Bearish calls:
Manitowoc (NYSE: MTW - News): 'This stock has just been hammered unfairly. ... We've got to wait till it settles, and it's not going to settle, because it's still in freefall.'Alcoa (NYSE: AA - News): 'It did not get the bid in the end ... it's trading only on fundamentals. On fundamentals, it's worth $35. ... I got too greedy on Alcoa.'
Published by SeekingAlpha

Labels: AA, CAT, Jim Cramer, Lightning Round, M, MTW, SHLD, TM, WGOV

Aruba Networks (NasdaqGM: ARUN - News): 'Blowout quarter last week ... How about we wait for a pullback, before we back up the truck... If it goes below $20, you've got to be willing to pull the trigger.'Merrill Lynch (NYSE: MER - News): ' MER is not going to have any problem going over $100.00 ... Because MER is incredibly well-run. The sub-prime problems are in the past ... That stock needs to go higher right now. Buy, buy, buy!'Level 3 Communications (NasdaqGS: LVLT - News): 'I think this stock is going to finish the year - yes, and if I may be so bold... - at between $7 and $8. So any one of these declines is just another opportunity to load the boat up with LVLT.'Wal-Mart (NYSE: WMT - News): 'I got behind WMT in the mid-$40s, and I am not backing away now at $50. It's got much more upside.'Alcoa (NYSE: AA - News): ' I think Alcoa and Alcan are going to merge... You know I think that AA is not going to be public in a year if they don't get that deal...'Alcan (NYSE: AL - News)Dominion Resources (NYSE: D - News): 'I think that one may be a better diversified utility company than yours (Targa Resources). So let's make that switch.'Research In Motion (NasdaqGS: RIMM - News): 'That has the better fundamentals (than Palm.)'Freeport-McMoRan (NYSE: FCX - News)Qualcomm (NasdaqGS: QCOM - News): 'If you want to be in a semiconductor play that has to do with cell, I will send you to QualComm.'BHP Billiton (NYSE: BHP - News) CVRD (NYSE: RIO - News): ' ... among the cheapest mineral stocks ... It's just too darn cheap, too well-run and, ever since they were able to buy the largest nickel company ... this thing wreaks of monopoly!'Barnes & Noble (NYSE: BKS - News): 'I actually like very much the Barnes & Noble quarter, and they're buying back a lot of stock.'
Bearish calls:
Target (NYSE: TGT - News): ' ... sell, sell, sell... let's take a little off the table, and go into Wal-Mart.Aluminum Corp. of China (NYSE: ACH - News) 'The Chinese market is overheated. I liked this stock initially as a dividend play. Now that it only yields 2%.'Targa Resources (NasdaqGM: NGLS - News)Palm (NasdaqGS: PALM - News): 'You got lucky. I need you out of PALM. I would rather see you in Research In Motion ... You just lucky with that Elevation bid... I want to head to the hills, PALM. Sell, sell, sell!'Scholastic (NasdaqGS: SCHL - News): 'Oh, way too inconsistent. It's really hurt a lot of people.'Tesoro (NYSE: TSO - News): 'I want you to sell that. That move has peaked. Those margins cannot be sustained ... 'Valero Energy (NYSE: VLO - News): 'I want TSO and VLO sold.'RF Micro Devices (NasdaqGS: RFMD - News): 'I am not going to bless RFMD. Not on this show. No way ... I understand the speculative desire for RFMD, but I am not going to tell you to stay with it.'
Published by SeekingAlpha

Labels: AA, ACH, AL, ARUN, BHP, BKS, D, FCX, Jim Cramer, Lightning Round, LVLT, MER, PALM, QCOM, RIMM, RIO, VLO, WMT

Apple (NasdaqGS: AAPL - News): 'Let's buy it down. You want to have 200 shares of AAPL, you buy 50 tomorrow at the opening, and then you pray it comes down... until five days before the iPhone is shipped, and then you've got to skee-daddy out of that guy... 'Alcoa (NYSE: AA - News):' ... even though it has had a monster run, and we believe in the stock, I am sticking with AA here.'Sony (NYSE: SNE - News): 'House of pleasure. I think that SNE goes higher ... How many companies come out with a totally third-rate product, that nobody likes, and then goes up 25% because of it ... I think it goes to $53, and there I want to pull the trigger.'Pall (NYSE: PLL - News): ' ... if you really want to go with that filtration game - that you go with Pall.'Tetra Tech (NasdaqGS: TTEK - News): ' ... if you want clean water, they've got it.'NYSE Euronext (NYSE: NYX - News): 'The NYX is not going to go up until everybody sells it, and everybody gets short it, and all the analysts come around and admit that they're wrong about being negative... and then it's going to fly.'
Bearish calls:
Resources Connection (NasdaqGS: RECN - News): ' I would not buy this stock. Don't buy, don't buy.'Skechers USA (NYSE: SKX - News): ' ... they had an inventory problem earlier in the year ... I think that SKX is too dangerous.'Calgon Carbon (NYSE: CCC - News)Verasun Energy (NYSE: VSE - News): 'You're kidding me, right? ... That stock was just created by bankers in order to be able to take the money from you - sell, sell, sell! '
Published by SeekingAlpha

Labels: AA, AAPL, CCC, Jim Cramer, Lightning Round, NYX, PLL, RECN, SKX, SNE, TTEK, VSE

Alcoa Inc. shares hit a five-year high Wednesday, rising to the biggest midday gain on the Dow Jones industrial average after rival Alcan Inc. said its shareholders should turn down Alcoa's takeover offer.
The index added 48.68, to 13,588.63, with 22 of the 30 stocks in the green.
A Prudential analyst said Alcan may turn the tables and buy Alcoa. Alcan shares were also up, indicating investors think Alcoa will raise its bid or another company will make an offer for Alcan. Alcoa shares rose $1.8, or 4.6 percent, to $40.75, and peaked at $40.80.
Caterpillar Inc. stock also reached an annual high, continuing its gains for the week. Shares of the heavy machinery maker rose $1.54, or 2.1 percent, to $77.06. The stock climbed as high as $77.25.
Shares of home improvement retailer The Home Depot Inc. added 45 cents to $38.98, erasing Tuesday's loss.
On the losing side, Honeywell International Inc. shares fell 75 cents to $56.22. The stock neared a seven-year high Friday, and on Tuesday, Honeywell agreed to buy Dimensions International, a defense logistics company, for $230 million.
International Business Machines Corp. stock gave up 63 cents, to $106.07. Shares have been declining since Friday, when the stock reached a five-year peak after IBM said it could double its earnings by 2010 after cutting costs and buying back shares.
Shares of aerospace company Boeing Co. were down 67 cents to $95.80. Boeing reiterated its 2007 and 2008 forecasts at an investors' conference Wednesday, but investors may be disappointed that the company did not raise those outlooks.

Published by AP

Labels: AA, AL, BA, CAT, HD, HON, IBM

Medtronic Inc. was among stocks leading the Standard & Poor's 500 Index higher in midday trading Wednesday after the Minneapolis-based medical device maker beat analysts' estimates for fiscal fourth-quarter profit and sales.
Medtronic's stock jumped $2.70, or 5.3 percent, to $53.50.
Another leader was Alcoa Inc. A day after Alcan Inc. rebuffed the fellow aluminum producer's $27 billion takeover bid, Alcoa's shares rose $1.56, or 4 percent, to $40.51. With Alcan now in talks with BHP Billiton Ltd., according to a Canadian newspaper, it now appears less likely Alcoa will buy Alcan and there has been some speculation that Alcoa may be a takeover target itself.
Shares of Forest Laboratories Inc. rose after the drug developer said its depression treatment Milnacipran met its goals in a drug trial.
The New York-based company's stock rose $2.14, or 4.1 percent, to $54.02.
In midday trading, the S&P 500 was up 6.37 to 1,530.49.
Among laggards on the index, shares of Norwood, Mass.-based Analog Devices Inc. fell after the chip maker said it expects fiscal third-quarter earnings to decline as the company spends more on research and development.
Shares of Analog Devices sank $4.13, or 10.2 percent, to $36.29.
Computer Sciences Corp. delayed filing its fourth-quarter results because the information technology consultant needs more time to fix its accounting for income taxes related to some transactions in prior periods. The announcement sent the El Segundo, Calif.-based company's stock down $2.04, or 3.5 percent, to $55.70.
Shares of Dillard's Inc. fell after the Little Rock, Ark,-based department store chain reported a 30 percent decline in first-quarter profit.
The stock fell $2.53, or 6.4 percent, to $37.12.
Published by AP

Labels: AA, ADI, AL, CSC, DDS, FRX, MDT

Wall Street advanced Wednesday, driving the Dow Jones industrials above 13,600 for the first time on another wave of takeover activity and an increase in oil and gasoline stockpiles.
Alcan Inc. rebuffed a $27.6 billion hostile bid by aluminum competitor Alcoa Inc., and Canadian media reported that Australian mining giant BHP Billiton Ltd. might make its own offer.
The bidding battle rumors came amid a New York Post report that EMI Group Chief Executive Jim Fifield might be in the final stages of planning an offer to buy the music company. And late Tuesday, Payless ShoeSource Inc. said it will buy competing shoe store chain Stride Rite for about $800 million, while real estate investment trust Crescent Real Estate Equities Co. said it will be bought by another real estate investment firm, Morgan Stanley Real Estate, for about $2.34 billion.
Investors appear to be unperturbed by the slow economy and focused more on corporate America's strength. About $2.3 trillion worth of deals have been announced so far this year, according to financial data provider Dealogic, and the tally is on track to beat last year's record $4 trillion.
Robust earnings reports from companies including Target Corp. and Medtronic Inc. and a solid rebound in U.S. gasoline inventories also encouraged investors to resume their buying. The Energy Department said gas inventories rose by 1.5 million barrels in the latest week, nearly twice the amount the market expected.
In mid-morning trading, the Dow Jones industrial average rose 60.46, or 0.45 percent, to 13,600.41.
Broader stock indicators were also higher. The Standard & Poor's 500 index advanced 7.72, or 0.51 percent, to 1,531.84, and the Nasdaq composite index gained 11.72, or 0.45 percent, to 2,599.74.
Published by AP

Labels: AA, AL, CEI, MDT, PSS, TGT

Alcoa Inc. (NYSE: AA - News), Altria (NYSE: MO - News), American Express (NYSE: AXP - News), American International Group (NYSE: AIG - News), AT&T (NYSE: T - News), Boeing (NYSE: BA - News)
Cramer predicted another 1,000 points for the Dow by the year's end and dedicated the week to discussing the 30 Dow stocks. He noted AA has been up 30% and predicts it will reach $42-$45. If it combines with Alcan, Cramer says AA could be part of a "delicious aluminum oligopoly." Cramer comments MO's 10% rise is not enough, especially given its 4% yield. Since it has spun off Kraft, Cramer envisions MO dividing into International and American divisions, one with a big dividend and one with growth potential. Cramer says AXP is "deceptive," since it quietly delivers but is up only 5% this year and is trailing behind Mastercard in valuation. He predicts AXP will climb up to $72. AIG doesn't get the respect it deserves, according to Cramer who says Metlife should not be worth more than AIG, which has a gigantic business in China. He says AIG has been held back by the massive selling of deposed head Maurice "Hank" Greenberg, and is a $81 name masquerading as a $71 stock. AT & T surpassed Cramer's expectations, since it has risen 13% after he predicted a mere 6 point rise. His new prediction is T will inch its way to $45. Cramer also revised his target for BA from $100 to $105 because of its excellent earnings.
Give Some Credit to Total System Services (NYSE: TSS - News), Automatic Data Processing (NYSE: ADP - News)
Cramer would buy TSS, a debit and credit card information card processor, which is a subsidiary of Synovus Financial. Although in similar situations, Cramer usually prefers a parent company, he feels that TSS could get taken over by a private equity firm. In addition, TSS has solid fundamentals, double-digit growth and is debt-free. While ADP may also be a takeover target, Cramer feels TSS is a better option because it is cheaper.
CEO Interview: John Sztykiel, Spartan Motors (NasdaqGS: SPAR)
John Sztykiel discussed the "tremendous amount of profitable growth ahead for the company," and explained the company is focused on three growth opportunities; mine-resistant ambush-protected vehicles, recreational autos and emergency vehicles. While Cramer comments SPAR has paused for a bit, he likes its story and says it is in "bull-market" mode.

Labels: AA, ADP, AIG, AXP, BA, Jim Cramer, Mad Money, MO, T, TSS

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 Underpriced 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.
United Parcel Service July 75 Calls (NYSE:UPS - News). UPS' PowerRating is 4.
Most Underpriced 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.
Sotheby's June 50 Puts (NYSE:BID - News). BID's PowerRating is 5.
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.
Apple Inc. July 115 Calls (NasdaqGS:AAPL - News). AAPL's PowerRating is 3.
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.
Dendreon May 17.5 Puts (NasdaqGM:DNDN - News). DNDN's PowerRating is 4.
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.
Alcoa (NYSE:AA - News). AA's PowerRating is 5.
Cisco Systems (NasdaqGS:CSCO - News). CSCO'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 suggests an extraordinarily negative earnings report, or other news which may negatively affect the stock.
BHP Billiton Ltd. (NYSE:BHP - News). BHP's PowerRating is 4.
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.
None today
PowerRatings are courtesy of TradingMarkets.com

Labels: AA, AAPL, BHP, bid, CSCO, DNDN, Hot Stock Options, UPS

Alcoa (NYSE: AA - News), Alcan (NYSE: AL - News), BHP Billiton (NYSE: BHP - News), CVRD Rio (NYSE: RIO - News)
Cramer thinks AA bid for AL because it wanted to prevent rivals BHP and RIO from making an initial move. He comments AA has been desperately trying to raise its stock price by every means possible, including selling divisions, but it is still at $35 in spite of a great quarter. He added, "I think Alcan would put itself up for sale and have a real bidding auction rather than do a deal with Alcoa." If a deal does go through, Cramer says it is "worth watching" because it could spark an antitrust controversy.
Published by SeekingAlpha

Labels: AA, AL, BHP, Hot Stocks, Jim Cramer, RIO, Wall Street Confidential

Alcoa (NYSE: AA - News), Alcan (NYSE: AL - News), Cleveland Cliffs (NYSE: CLF - News): Cramer would play AA's bid for AL by purchasing some CLF, even though it is at its 52-week high. He noted CLF is a $3 billion company with a "tremendous" repository of iron, and he predicted iron will soon be in short supply. Cramer reiterated his comment that AA will not be public by next year; "This sector is so fluid, that I would not bet against anybody. Everybody's for sale."
Apple Inc. (NasdaqGS: AAPL), Boeing (NYSE: BA - News) and Deere & Co. (NYSE: DE - News): Cramer predicts these three will be breakout stocks, since Apple will release its iPhone next month, the aerospace cycle is "amazing," and agriculture is healthy; "we're off to the moon with DE," commented Cramer. He observed that while the stocks seem expensive on 2007, they are cheap on next year's earnings, and resolved to trade in his Zanderphone (referring to Motorola's CEO Ed Zander) for an iPhone.
Cameco (NYSE: CCJ - News) and Mosaic (NYSE: MOS - News): Cramer likes CCJ and MOS as a plays for producing uranium from phosphates but would wait until the stocks pull back because they have both have increased substantially. He prefers MOS since it has agriculture to fall back on.
Published by SeekingAlpha

Labels: AA, AAPL, AL, BA, CCJ, CLF, DE, Jim Cramer, Mad Money, MOS

Stocks were narrowly mixed Tuesday as investors refrained from major moves ahead of first-quarter earnings reports that begin with Alcoa Inc.'s results after the closing bell.
The aluminum producer is expected to post a profit of 75 cents per share. Wall Street looks to results from the component of the Dow Jones industrial average to not only gauge the pace of earnings for the quarter but as a proxy for the health of the overall economy.
Stocks also showed little overall movement Monday as investors awaited news of how companies fared during the first quarter, and also their expectations for the coming quarters. In the fourth quarter, Standard & Poor's 500 companies snapped an 18-quarter streak of double-digit profit gains, and Wall Street expects profit growth to remain in the single digits for the first three months of the year. In midday trading, the Dow fell 13.17, or 0.10 percent, to 12,555.97.
Broader stock indicators were slightly higher. The S&P 500 edged up 0.44, or 0.03 percent, to 1,445.05, and the Nasdaq composite index rose 2.75, or 0.11 percent, to 2,471.93.
Bonds continued to recover, with the yield on the benchmark 10-year Treasury note falling to 4.71 percent from 4.75 percent late Monday. Gold prices rose, while the dollar was mixed against other major currencies after the United States filed two complaints against China at the World Trade Organization over copyright policy. The currency is at a two-year low against the euro.
Oil prices rose after selling off Monday following doubts about Iran's comments about its uranium-enrichment achievements. A barrel of light, sweet crude for delivery on the New York Mercantile Exchange rose 36 cents to $61.87. Investors were also awaiting minutes from the Fed's most recent meeting at which it left short-term interest rates unchanged for the sixth straight time. In corporate news, Dow Chemical Co. fell $1.23, or 2.6 percent, to $45.40 after the chemical and plastics maker said it has had no discussions about a leveraged buyout. Citigroup Inc. rose 52 cents to $52.10 ahead of a major restructuring announcement, where some 26,000 workers will be reassigned or their jobs eliminated, according to a report in The New York Times. D.R. Horton Inc., the nation's largest homebuilder by deliveries, said its second-quarter sales orders fell 37 percent, led by even steeper declines in California and the Southwest. Shares fell 33 cents to $21.71.
Adolor Corp. fell $5, or 57.3 percent, to $3.72 after the biopharmaceutical company stopped clinical studies and withdrew an application for a constipation-relief drug, leading to a series of downgrades.
Shares of drug maker Mylan Laboratories Inc. jumped 65 cents, or 3.1 percent, to $21.85 after the company raised its profit forecast, citing continued strength in its generics business and new product sales.
Declining issues outnumbered advancers by about 9 to 5 on the New York Stock Exchange, where volume came to 551.4 million shares.
The Russell 2000 index of smaller companies rose 2.61, or 0.32 percent, to 814.25.
Overseas, Japan's Nikkei stock average closed down 0.45 percent. In afternoon trading, Britain's FTSE 100 rose 0.32 percent, Germany's DAX index rose 0.94 percent, and France's CAC-40 rose 0.43 percent.
Source: AP

Labels: AA, ADLR, C, DHI, DOW, MYL

Thornburg Mortgage (NYSE: TMA - News): Cramer comments some of the so-called "dirty dozen" which have been targeted by the shorts "didn't fall off the turnip truck." He points to TMA's CEO, Garrett Thornburg, who says the company is demanding more detailed documentation on the so-called Alt-A loans, which often don't receive enough scrutiny and which the bears say are often vulnerable to defaults and delinquencies. "Holy Cow!" Cramer exclaimed, "This guy is actually a legitimate lender!" He also found hope in strong insider buying.
Dow Chemical (NYSE: DOW - News), Alcoa (NYSE: AA - News), CVRD (NYSE: RIO - News), BHP Billington (NYSE: BHP - News): Cramer noted DOW rose 6% on rumors of an acquisition, and he would buy it at $43. Cramer predicts AA "won't be independent at this time next year, says BHP "really ramping" and rising nickel is good news for RIO; "That stock is just going nuts!"

Labels: AA, BHP, DOW, Jim Cramer, Jim Cramer's Stop Trading, RIO, TMA

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."
Published by SeekingAlpha

Labels: AA, BHP, CL, DOW, GIS, Jim Cramer, K, KFT, KMB, KR, Mad Money, MO, RIO, SLE, SVU, SWY, VZ

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."

Published By SeekingAlpha

Labels: AA, BHP, CL, DOW, GIS, Jim Cramer, K, KFT, KMB, KR, Mad Money, MO, RIO, SLE, SVU, SWY, VZ

KB Home (NYSE: KBH - News): Cramer says that KBH's strong performance is proof that negativity on housing is excessive, since the company reported a rise in revenues and a 4% gain in the price of a typical house over last year. In spite of the 4% rise in the stock, people are "so busy burying" KBH, which Cramer considers an attractive takeover target.
Alcoa (NYSE: AA - News), Rio Tinto (NYSE: RTP - News), 3M (NYSE: MMM - News): Since "undermanaged companies" in metals have historically received takeout deals, Cramer expects a bid for AA from RTP, especially since shares of AA rose 6%. Concerning MMM, Cramer says management should "fix the company" before undertaking its ambitious $7 billion buyback.

Labels: AA, Jim Cramer, Jim Cramer's Stop Trading, KBH, MMM, RTP

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.
LCAVision Mar 50 Calls (NasdaqGS:LCAV - News). LCAV's PowerRating is 3.
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.
Cephalon Mar 75 Puts (NasdaqGS:CEPH - News). CEPH's PowerRating is 5.
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.
Rio Tinto Mar 210 Calls (NYSE:RTP - News). RTP'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.
Garmin Mar 50 Puts (NasdaqGS:GRMN - News). GRMN's PowerRating is 5.
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.
Alcoa (NYSE:AA - News). AA'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 suggests an extraordinarily negative earnings report, or other news which may negatively affect the stock. Washington Mutual (NYSE:WM - News). WM'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.
Peabody Energy (NYSE:BTU - News). BTU's PowerRating is 4.
PowerRatings are courtesy of TradingMarkets.com

Labels: AA, BTU, CEPH, GRMN, LCAV, RTP, WMT

Which stocks to buy?
George F. Foley, a portfolio manager for the Glenmede Large Cap Value and Core Value funds, is leaning heavily toward materials companies, particularly well-known names such as Alcoa (AA), Alcan (AL), and Phelps Dodge (PD) that he thinks can benefit from gains in efficiency. Merrill Lynch & Co. chief investment strategist Richard Bernstein favors high-quality tech companies, discount retailers, global defense companies, and multiline insurers. He also likes industrials and telecom shares as the demand for raw materials and expertise increases in a burgeoning global infrastructure.
Tech seems to be a common theme for 2007. John B. Cunningham, chief investment officer at J. & W. Seligman & Co. in New York, likes hardware specialists such as computer, hard drive, and memory makers as consumer demand for electronics and capital spending by big corporations continue at a healthy clip. "The fundamentals are still very solid," he says. "We think tech can outperform the broader market." He also recommends telecom equipment makers as regional phone operators expand their systems to compete with cable operators.
Don't forget financials, says Edward Yardeni, chief investment strategist of Oak Associates Ltd. He says the stocks of investment banks and asset managers are good ways to bet on merger mania and retiring baby boomers. And although energy has been one of the best-performing sectors in the S&P for the last three years, plenty of opportunities remain, he says. There's still momentum in the drilling, equipment, and services companies. "Look around," says Yardeni. "We have a capital-spending boom going on."
Internationally focused investors should expect global economic growth to slow but not to crash, and opportunities to persist. Developed markets seem especially cheap, trading at an average of 12.4 times expected 2007 earnings, compared with a 10-year average of 18.7, according to MFS. "There's still massive liquidity looking for a home, and valuations are still attractive in a number of markets," agrees Simon Davis, co-chief investment officer based in London for Putnam Investments.
Davis says that while many China-based companies have been bid too high, it's smart to look at suppliers to an economy that continues to grow 10% a year. He favors mining and natural resources outfits in Australia, including Zinifex, BHP Billiton (BHP), and Rio Tinto (RTP), which is dual headquartered in Melbourne and London.
The likely losers?
Bessemer's Stern cautions investors to stay away from housing-related stocks such as homebuilders, construction companies, and savings and loans. Although it may be tempting to think that there are bargains among them, he says "the profits they've posted in the last couple of years exaggerate their long-term earnings potential."
Profit margins at small regional banks will keep being squeezed by higher short-term interest rates. And the pressure on companies to use their free cash to buy back shares and issue dividends rather than pay down debt doesn't bode well for high-grade corporate bonds.
The biggest risk to investors: inattention. Yardeni, who predicted the strong stock market of 2006, says the S&P could reach 1600 by midyear, a 13% gain, which will get investors worried about higher interest rates. And the ensuing sell-off, he says, will offer opportunity once again.
By Mara Der Hovanesian
By BusinessWeek Online

Labels: AA, AL, BHP, PD, RTP