Jim Cramer's Mad Money Review

Bullish calls:
Best Buy (BBY): I think Best Buy does the job. OceanFreight (OCNF): We like dry bulk shipping! Eagle Bulk Shipping (EGLE): That group rocks!
Bearish calls:
Circuit City (CC): Existential crisis here. I'm having trouble trying to figure out why Circuit City stays in business, to be honest.
Build-A-Bear (BBW): I don't even want to get near that stock. That one is a House of Pain. Wyeth (WYE): .It has been just a terrific performer this year. ...I want you to take some off the table. It's just not that good a company. Synaptics (SYNA): It has been a good winner. It is all the way up. But I just have to give you a Don't Buy. Unisys (UIS): I can't get behind the stock whatsoever. That's old technology. That ain't workin. Martha Stewart (MSO): Disappointing. By the way, I can't get behind anything print. New York Times (NYT): Very worrisome.
Published by SeekingAlpha

Labels: BBW, BBY, CC, EGLE, Jim Cramer, Lightning Round, MSO, NYT, ONCF, SYNA, UIS, WYE

In periods of slower economic growth, earnings at small-cap companies tend to suffer the most. But some smaller names have proven track records of surviving in good times and bad.
For mutual-fund managers specializing in small-cap stocks, such "Steady Eddies" are attracting renewed interest.
"The story in 2007 for small-cap managers is going to be consistency of growth rather than high-flying performance," said Jason Votruba, co-manager at UMB Scout Small Cap Fund (NASDAQ:UMBHX - News). "The prospect of an economic slowdown is bringing small-cap Steady Eddies back en vogue."
Such a move is taking place even though small-caps are expected to underperform blue chips in the coming year, says Vivienne Hsu, co-manager at Schwab Small-Cap Equity Investor Fund (NASDAQ:SWSIX - News).
"Interest rates and inflation remain at historically low levels," she said. "As long as that continues, a select number of smaller companies should be able to keep expanding and provide good investment opportunities."
An example she gives is Emcor Group (NYSE:EME - News). Although it's prone to cyclical downturns, Hsu says the firm has a broad reach with operations around the world. It also serves a diverse mechanical and electrical construction services marketplace.
"Every building needs to make sure its electrical and mechanical systems are operating correctly," Hsu said. "So they've got a very broad base of customers. That makes their earnings stability look good to us right now."
Another segment that should produce stable small-cap stocks is tech, says UMB Scout's Votruba.
"Leading smaller companies that survived the tech wreck years now have proven technologies and solid financials," he said. "They've shown a knack for creating innovative products and building cash in different markets."
One of his favorites is Synaptics (NASDAQ:SYNA - News) It makes touch pads for notebook computers. The firm also has come out with touch screens for mobile phones. "There's speculation that these might be adopted for the popular Apple iPhone," Votruba said.
Even if that doesn't happen, a host of other mobile-phone makers have been picking up Synaptics' touch screen systems for their new products.
The stock fell out of favor with many investors in February 2005 when it warned of disappointing earnings. That came after Apple Computer (NASDAQ:AAPL - News) stopped using Synaptics products with its popular iPod device. "But it's likely that Apple is going to come back to them at some point," Votruba said.
The loss of Apple's iPod business resulted in the firm losing about 11% of its top-line growth in the last half of 2005, Votruba says. Still, he notes that Synaptics remained profitable. "They've continued to expand into different niche markets while keeping costs under control," Votruba said.
Health and clean upHealth care is another segment with several attractive small-cap stocks, says Rob Roquitte, co-manager at Allegiant Multi-Factor Small Cap Value Fund (NASDAQ:AMRIX - News). One of those is Chattem (NASDAQ:CHTT - News). "Most people probably don't recognize their name," he said. "But their over-the-counter products are well-known and well-established brands."
The firm targets products under the radar of larger health-care companies, Roquitte added. "Individually, they wouldn't make strong enough profits to significantly impact a bigger company's bottom-line," he said. "But taken together, Chattem has built-up a nice stable of niche products."
Top brands include Aspercreme, Gold Bond, Selsun Blue and Dexatrim.
"These are the types of products that consumers won't turn away from in large numbers unless a significant correction takes place," Roquitte said.
Another company he believes is well-positioned in 2007 is Waste Connections (NYSE:WCN - News) It runs a geographically diverse operation that picks up trash and recycled goods across 23 states.
"This is a company with a history of very consistent revenue growth in the 10-15% annual range," Roquitte said. "It's not an astronomical grower. But Waste Connections creates strong free-cash flow and has good earnings visibility since they work under contract most of the time."
Published by MarketWatch

Labels: AAPL, AMRIX, CHTT, EME, SWSIX, SYNA, UMBHX, WCN