Jim Cramer's Mad Money Review

Homebuilders are getting gloomier about the slumping housing market, as a 22-year-old index that tracks their sentiment set a new record low Tuesday.
The National Association of Home Builders said its housing market index, which tracks builders' perceptions of conditions and expectations for home sales over the next six months, fell two points to 18 in October, the lowest level since the index began in Jan. 1985. It was the eighth straight monthly decline.
The consensus forecast of economists surveyed by Thomson/IFR was for a reading of 19.
Index readings higher than 50 indicate positive sentiment. The seasonally adjusted index has been below 50 since May 2006.
The report came as Treasury Secretary Henry Paulson, in a speech at Georgetown University's law school, said the housing market correction is persisting for longer than expected and appears likely to "continue to adversely impact our economy, our capital markets and many homeowners for some time yet."
Declines in builder confidence were seen across the country, except for the Midwest, which increased by two points but remained the weakest region nationwide.
Source: Alan Zibel, AP Business Writer

Labels: BZH, CTX, DHI, Homebuilders, HOV, KBH, LEN, PHM, RYL, TOL

This year's decline in existing home sales will be steeper than previously anticipated, a trade group for real estate agents predicted Wednesday.
The eighth straight downwardly revised forecast from the National Association of Realtors calls for U.S. existing home sales to be 10.8 percent below last year as housing market woes persist. Sales of new homes, meanwhile, are expected to finish 2007 at the lowest level in a decade.
The trade group's outlook for 2007 homes sales has grown more pessimistic through the year as foreclosures soared, credit market troubles developed and sales fell. Back in February, the group forecast an annual decline in existing home sales of only 0.6 percent.
In its October report, the association predicts 5.78 million existing homes will be sold in 2007, down from 6.48 million last year. Last month, the association predicted an 8.6 percent drop from a year ago.
This year's sales would be the lowest since 2002, when sales hit 5.63 million.
Sale prices for existing homes are forecast to drop 1.3 percent to a median of $219,000 this year -- a slight improvement from last month's prediction of a 1.7 percent decline. The median price refers to the point where half sold for more and half for less.
Next year, the trade group expects existing home sales to climb to 6.12 million. That is 2.4 percent lower than last month's prediction.
Source: Alan Zibel, AP Business Writer

Labels: BAC, BZH, CFC, DHI, Home Sales, KBH, LEN, MDC, PHM, SPF, TOL, WB, WFC, WM

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

Thornburg Mortgage (NYSE: TMA - News), Washington Mutual (NYSE: WM - News), Lehman Brothers (NYSE: LEH - News), KB Home (NYSE: KBH - News), Beazer Homes USA (NYSE: BZH - News), Procter & Gamble (NYSE: PG - News), Coca-Cola (NYSE: KO - News), and Colgate (NYSE: CL - News)
Cramer predicts around 7 million "teaser" mortgages are likely to be defaulted and recommends "staying defensive," by avoiding real estate and bank stocks such as TMA, WM, LEH, KBH and BZH and investing in soft goods such as PG, KO and CL. While the Fed thinks mortgage woes will pass, Cramer still believes the Fed should cut rates.
Schering-Plough (NYSE: SGP - News)
Cramer thinks SGP is an excellent stock for the current environment and notes sales are up 13% since last year. He adds the company is not leveged to mortgaes and he believes in Fred Hassan, who was one of Cramer's transformational CEOs. He would wait until buying SGP, and while the current economic climate is not good, "we have no control on what the Fed will do," Cramer said.
Vodafone (NYSE: VOD - News),Verizon Wireless (NYSE: VZ - News)
VOD is a good international play and the world's best wireless carrier. Cramer thinks VOD will raise more revenues than the competition, owns a "serious chunk" of VZ, is successful in emerging economies and has a strong dividend.
CEO Interview: Jack Cumming, Hologic (NasdaqGS: HOLX - News) with Cytyc (NasdaqGS: CYTC - News)
Jack Cumming talked about the upcoming merger with CYTC, which will mean $400 million to $50o million in EBITDA and nine top women's health products. Cumming added the company can afford the acquisition and there is no financial risk.

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Labels: BZH, CL, CYTC, HOLX, Jim Cramer, KBH, KO, LEH, Mad Money, PG, SGP, TMA, VOD, VZ, WM

Safer than Houses: Intel (NasdaqGS: INTC - News), Texas Instruments (NYSE: TXN - News), Cisco Systems (NasdaqGS: CSCO - News), and Microsoft (NasdaqGS: MSFT - News), Advanced MicroDevices (NYSE: AMD - News)
Often people run from tech during a selloff, but Cramer notes tech is now the safe sector with significant upside potential, since these companies have enough cash to make huge buybacks. Cramer proclaims he is once again an "Intel-aholic" as he was in the 90s, because the stock is cheap, has loads of cash and an accelerating growth rate. Compared with AMD, Cramer says Intel is "the much stonger part of the duopoly" and has a lower price tag.
The Rant Heard Round the World
While some think Cramer's rant against the Fed last Friday was overdone, Cramer believes he was "the most responsible guy out there. He added, " The AAA-rated mortgage bonds are trading horribly or not at all. These are good pieces of paper, yet they've been marked down," Cramer said. He says has no idea why Ben Bernanke is still worried about inflation, and observed that the Europeans are concerned about the ripple effect of the US mortgage crisis. "My rant was the rant heard around the world," Cramer said, "The only one who hasn't heard it is Chairman Bernanke himself."
Mad Money Madness Index: MGIC (NYSE: MTG - News), MBIA (NYSE: MBI - News), KB Home (NYSE: KBH - News), Blackstone (NYSE: BX - News), Centex (NYSE: CTX - News), Beazer Homes (NYSE: BZH - News), Washington Mutual (NYSE: WM - News)
Cramer says those who have not sold the stock in his Mad Money Madness Index are being hoggish; "Greed is not good ... The market makes you pay for it."
CEO Interview: Dr. Eli Harari, Sandisk (NasdaqGS: SNDK - News)
Cramer thinks SNDK will rise next week if there is a day that is not "horrible," and he likes the company because flash memory is "hot," will replace disk drives and is the favorite of companies like Apple. He said Dr. Eli Harari's bullish remarks at a recent Flash Memory Summit reminds him of Cisco CEO John Chamber's fully justified optimism. Dr. Harari commented flash is everywhere, is contributing to market acceleration and is much cheaper than it used to be. "There's no question that flash memory today is the fastest-growing market within the semiconductor market," Dr. Harari said. "And I do not see it ending anytime soon."
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Labels: AMD, BX, BZH, CSCO, CTX, INTC, Jim Cramer, KBH, Mad Money, MBI, MSFT, MTG, SNDK, TXN, WM

Cramer's Index: MGIC Investment (NYSE: MTG - News), Countrywide Financial (NYSE: CFC - News), Bear Stearns (NYSE: BSC - News), KB Home (NYSE: KBH - News), Centex (NYSE: CTX - News), MBIA (NYSE: MBI - News), Blackstone (NYSE: BX - News), Thornburg Mortgage (NYSE: TMA - News), Beazer Homes (NYSE: BZH - News), Washington Mutual (NYSE: WM - News), Goldman Sachs (NYSE: GS - News), Citigroup (NYSE: C - News)
While Cramer says he doesn't want to be a "buzz kill," he admits it is not possible to be really bullish as long as the housing crisis persists. Cramer formed his own "index" of the above-mentioned stocks, and said when the 12 companies stablilize and the Fed cuts interest rates, it will be time to let the bulls run once again. He made a personal appeal to Fed chairman Ben Bernanke; "Cut the rates. Take the pressure off. Many, many people could be about to lose their homes, because you're not listening..."
New Age Under Armour: Lululemon Athletica (LULU)
Cramer has discovered a new Under Armour, which like its predecessor, has experienced a massive initial bounce and is expected to keep growing. Yoga apparel company, LULU came public at $18 and jumped to $31 "in one of the worst tapes I've ever seen," said Cramer. However, he doesn't think this stock is a "one trick pony" but will keep going up as UA did, because LULU has been doubling stores year over year. Since the stock is speculative and has risen, Cramer recommends waiting at least 3 days or until the price drops before buying.
Beer is Near: Boston Beer (NYSE: SAM - News)
While in the current climate, investors are dubious of even some soft goods stocks, "People drink beer no matter what." Cramer likes SAM's 13% long-term growth rate and its smart move of acquiring a brewery from Diageo for $55 million rather than building a new one, which would have cost $200 million. Although he's a self-proclaimed "Bud man" Cramer gives SAM a triple buy, even near its 52-week high.
CFO Interview: Stephen Chazen, Occidental Petroleum (NYSE: OXY - News)
Chazen discussed production increases in Argentina and Peru; "California continues to be good for us." he added. Chazen dismissed worries about political risks, noting there are always political risks, and he remarked on the stability of OXY's chemical business. "All oil stocks are trading down in unison," Cramer said, and added now is the time to buy oil.
Published by SeekingAlpha

Labels: BSC, BX, BZH, C, CFC, CTX, GS, Jim Cramer, KBH, LULU, Mad Money, MBI, MTG, OXY, SAM, TMA, WM

Home is Where the Debt Is: Centex (NYSE: CTX - News), Lennar (NYSE: LEN - News), Beazer (NYSE: BZH - News), KB Home (NYSE: KBH - News), Countrywide Financial (NYSE: CFC - News), Annaly Capital Management (NYSE: NLY - News)
It isn't just about sub-prime anymore; "All mortgages that were written between 2005 and 2007 I think are corrupted," said Cramer. He came to this conclusion after reading conference calls of CTX, LEN BZH and KBH. However, he zeroed in on two conference calls which are required reading: CFC's and NLY's. In CFC's "long and tedious" call is the implication there is no such thing as sub-prime because all mortgages are bad due to piggybacking equity loans and rising rates. CEO Angelo Mozilo said he doesn't predict a recovery until 2009. NLY's CEO, Michael Farrell, made "some incredible allusions to Moscow and Napoleon." While the situation is bad, Cramer says it is not as dire as it was in 1990 and 1991 when "almost every major money center bank was insolvent, and most of the big regionals either went under or were so impaired that they had to do shotgun marriages." After reading these calls, Cramer arrives at the grim conclusion that anyone involved with mortgages "could be wiped out in this environment."

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Labels: BZH, CFC, CTX, Jim Cramer, KBH, LEN, NLY, Wall Street Confidential

Bullish Calls:
ConocoPhillips (NYSE: COP - News): 'I would start with an oil. I recommended it last week. COP to go from $80 to $120 ... we buy that, particularly on any pullback.'Bolt Technology (AMEX: BTJ - News): 'This is a company that has a lot of machine parts that go into equipment that goes into oil rigs. This company has not kept pace ... I don't get it. Let me tell you something... I would buy it... 'LodgeNet Entertainment (NasdaqGM: LNET - News): 'This is a company that has a lot of machine parts that go into equipment that goes into oil rigs ... I don't get it. Let me tell you something... I would buy it... 'Millipore (NYSE: MIL - News): 'I like the filtration business ... It's a mini bull market, and MIL is in it.'Altria (NYSE: MO - News): 'This is one of the greatest, greatest value creators in history. They will split the company. I am telling you, in no uncertain terms, if it was not options expiration week, and the stock's being pinned at $70... this stock would be at $72-73, where it will be in the next few weeks. What I am saying is, pull the trigger... buy some MO.'Honeywell (NYSE: HON - News): 'HON is probably the most out-performed of any of the DOW stocks that I picked at the beginning of the year... I'm telling you to pull the trigger. Buy, buy, buy! Beautiful quarter! He ain't done.'
Bearish calls:
Knight Capital (NasdaqGS: NITE - News): 'I think NITE's a good outfit ... this brokerage industry - it is just not a place to go right now. I am giving it a 'don't buy, don't buy' to NITE. 'Toll Brothers (NYSE: TOL - News): 'The stock cannot be owned.'Lennar (NYSE: LEN - News)K.B Home (NYSE: KBH - News)
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Labels: BTJ, COP, HON, Jim Cramer, KBH, LEN, Lightning Round, LNET, Mad Money, MIL, MO, NITE, TOL

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.
Goldman Sachs August 250 Calls (NYSE:GS - News). GS' PowerRating is 6.
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.
Mastercard Inc. July 150 Puts (NYSE:MA - News). MA'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.
NYMEX Holdings Aug 145 Calls (NYSE:NMX - News). NMX's PowerRating is currently unavailable due to the stock not meeting certain parameters.
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.
iShares MSCI Emerging Markets Index Aug 120 Puts (AMEX:EEM - News). EEM'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.
Affymetrix (NasdaqGS:AFFX - News). AFFX'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.
None today
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.
KB Home (NYSE:KBH - News). KBH's PowerRating is 5.
Starbucks Corp. (NasdaqGS:SBUX - News). SBUX's PowerRating is 4.
PowerRatings are courtesy of TradingMarkets.com

Labels: AFFX, EEM, GS, KBH, MA, NMX, SBUX, Stock Options

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

On Speculation: Landec Corp (NasdaqGS: LNDC)Cramer announced that he was going to discuss speculative stocks on Fridays to give investors a weekend to cool off before pulling the trigger on potentially risky companies. Friday's speculative play was LNDC, a $12 stock that, according to Cramer, is in the hottest part of one of the hottest sectors, which is seed technology. LNDC's technology, "intellicoat," prevents seeds from germinating and absorbing water too early, and allows farmers to plant up to four weeks ahead of time. Cramer says, "if corn is the next oil, LNDC is the equivalent of a pressure pumper that gets more oil out of the well." He advised investors to use limit orders and not to buy an entire position at one time.The Week Ahead: Prudential (NYSE: PRU - News), Metlife (NYSE: MET - News), Aon Corp (NYSE: AOC - News)Cramer commented that he doesn't like the market here, that the financials are "acting terrible," the real estate market is a "total collapsed bubble," and that gold, "ever the enemy of paper" is going up and that gold investors should take profits. In this "glass is half-empty" environment, Cramer warns of selloffs in even the best companies, and suggests buying only half of the intended amount and making a move at the end of the week after the "selling squall." He likes Prudential, which reported a "beautiful quarter," AOC, and MET, which is best-of-breed and is the "big sleeper" of next week with 10% accelerated growth. Cramer would buy it before and after its earnings report and recommends patience if it doesn't rise immediately.Chipotle Mexican Grill (NYSE: CMG - News) and Denny's (NasdaqCM: DENN)Concerning CMG and DENN, Cramer says he doesn't mind fact that these companies have debt because their financials are still good, they can refinance at low rates thanks to the strong bond market, and can raise earnings per share by decreasing interest payments. He calls Denny's a "bad going to good" story, but would wait, and calls CMG a "good going to better" story which will have a "fantastic quarter." However, Cramer would hold off until CMG gets hit and would buy it low.Life Time Fitness (NYSE: LTM - News), Baidu.com (NasdaqGM: BIDU), Psychiatric Solutions (NasdaqGS: PSYS)LTM has "come in a tad" from where Cramer recommended it as a generational play, but he would still buy it as a long-term stock. He comments that BIDU has just a fraction of Google's value and better growth potential, but is in a precarious position because of China's Communist government. Since BIDU tends to trade wildly after it reports, he would use a downturn as an opportunity to buy it cheaply. Cramer notes that PSYS' management has been bullish ahead of the quarter, and would buy some stocks ahead of time, since PSYS has been acquiring companies, and Cramer expects a "big number bump" next week.Masco Corp. (NYSE: MAS - News), KBH Home (NYSE: KBH - News), Daktronics (NasdaqGS: DAKT), Reliance Steel (NYSE: RS - News)Cramer would ring the register on MAS before it reports, since it has had a big run. He predicts that KBH will see a huge selloff, and would sell it before it reports and buy the stock back lower. Cramer likes DAKT which is "remaking the billboard industry in its own digital image" and is building huge billboards at sports stadiums. He would use the 8% dip as an opportunity to get in before it reports. Cramer would take profits in RS because it has risen 8 points since he recommended it.Published By SeekingAlpha

Labels: AOC, BIDU, CMG, DAKT, DENN, Jim Cramer, KBH, LNDC, LTM, Mad Money, MAS, MET, PRU, PSYS, RS

Advanced Micro Devices (NYSE: AMD - News), Intel (NasdaqGS: INTC), Hewlett-Packard (NYSE: HPQ - News), Symanetc (NasdaqGS: SYMC): Cramer would look beyond Intel for a good tech play and doesn't think it can trounce AMD in a price war. He suggests buying buyers of semiconductors such as HPQ rather than semiconductors themselves, and Cramer is baffled by the fact that HPQ is down. He adds that SYMC is a "no-starter" and reminds him of 90s software companies which never recovered, and urges investors to move on.
Centex (NYSE: CTX - News) and KB Home (NYSE: KBH - News): The land-options write offs taken by CTX and KBH indicate that "their eyes were too big," says Cramer and the fact that they took drastic measures late demonstrates that they were anticipating an upturn in housing. Cramer believes that this is the retrenchment the market is waiting for, and while he liked both stocks in September, he only likes KBH now, but would not be opposed to selling it.
General Electric (NYSE: GE - News): Cramer thinks GE's purchase of an aerospace company is an indication that it wants to move aggressively into that sector, but he is more interested in the acquisition of oil equipment outfit, Vetco Grey. "I would love to buy the stock not only on its P/E basis, which is high, but on its bet on oil," Cramer said.
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Labels: AMD, CTX, GE, HPQ, Jim Cramer, KBH

Wall Street retreated Wednesday, pausing from its record-breaking run as a higher-than-expected producer price index reignited interest rate worries in the market.
In midmorning trading, the Dow Jones industrial average fell 16.42, or 0.13 percent, to 12,566.17, pulling back after three straight days of record closes. Broader stock indicators also slipped. The Standard & Poor's 500 index was down 1.40, or 0.10 percent, at 1,430.50, and the Nasdaq composite index fell 8.45, or 0.34 percent, to 2,489.33.
The Labor Department said the PPI, an indicator of inflation, rose by 0.9 percent in December -- slower than in November, but faster than the market expected. The report raised concerns that the Federal Reserve might have reason to resume its rate-hiking campaign to curb inflation.
Inflation worries have been calmed lately by plummeting energy prices, which should save Americans some money on their fuel costs. Crude oil prices are down 16 percent on the year. But Wednesday's Labor Department report showed that even the core producer price index, which strips out food and energy, rose a bit quicker than expected.
Also Wednesday, investors weighed another batch of earnings reports that showed strength in some sectors and weakness in others.
The market has been moving erratically lately, due to uncertainty about whether the economy's moderation will take a toll on corporate earnings this year, and whether U.S. consumers' spending power will be helped by a possible rate cut and falling energy prices.
Bond prices edged lower after the PPI data, as most Treasury market watchers don't anticipate any moves by the Fed until much later in the year. The yield on the benchmark 10-year Treasury note rose to 4.76 percent from 4.75 percent late Tuesday.
Crude oil on the New York Mercantile Exchange fell 14 cents to $51.07 a barrel, testing prices not seen since May 2005.
The dollar edged lower against other major currencies, while gold prices rose.
Homebuilders -- a sector that has been struggling in the tepid housing market of the past couple years -- got a boost after Lennar Corp.'s chief executive said the company would fare better in 2007 than it did in 2006.
Lennar slipped 43 cents to $49.72 due to a fourth-quarter loss, but KB Home rose 70 cents to $49.92, Toll Brothers Inc. rose 24 cents to $31.57, and Centex Corp. rose 69 cents to $52.30.
The technology sector looked less impressive, though, after chip maker Intel Corp.'s late Tuesday report that fourth-quarter profit plunged and forecast that 2007 profit margins would be weaker than analysts had expected.
Intel, the world's largest chip maker, dropped $1, or 4.4 percent, to $21.30.
Meanwhile, JPMorgan fell 24 cents to $48.15, despite reporting fourth-quarter profit that beat analysts' expectations. Mellon Financial also reported strong earnings and revenue, which boosted the stock 7 cents to $43.49.
Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where volume came to 133.1 million shares.
The Russell 2000 index of smaller companies was down 2.13, or 0.27 percent, at 789.35.
Overseas, Japan's Nikkei stock average rose 0.34 percent. In afternoon trading, Britain's FTSE 100 was down 31.70 percent, Germany's DAX index was down 28.84 percent, and France's CAC-40 was down 33.70 percent.
Published by Madlen Read, AP Business Writer

Labels: CTX, INTC, KBH, LEN, TOL