Cramer's 'Mad Money' Recap: Seeing Red in Security

Stock quotes in this article: FLIR , GWR , SRZ , MCHX , HDI , AMCC  

Greenberg, Cramer Takes

Senior MarketWatch columnist Herb Greenberg joined Cramer to spar over the merits of Sunrise Senior Living(SRZ Quote), a long-term care facility company.

Greenberg says the same-store sales of Sunrise's base business are growing at 3.3% a year after you take out price increases, and that the rest of the company has morphed itself into a management services company.

He argued that this makes the accounting opaque and the company hard to understand.

But Cramer said Sunrise is a "great demographic play" and that he sees the stock going higher.

Greenberg also took issue with Marchex(MCHX Quote), saying that the organic growth of the core business is doing nothing.

He said that the company is a "manana story," meaning that it keeps promising results tomorrow.

Finally, Greenberg took a look at Harley-Davidson(HDI Quote). He said he told Cramer on a "Mad Money" episode several months ago that the company had warehouses that dealers could use to hold bike inventory. Now, Greenberg said, the company has said it is changing course, but did not give a reason why.

Both Cramer and Greenberg said that this could be a reason to be wary of Harley.

A Possible Chip Shot

"For less than the price of a sandwich," Cramer said, he had a stock poised to make some money, and that's Applied Micro Circuits(AMCC Quote).

Like every over tech company he's been bullish on, Applied Micro Circuits is part of the optical networking complex. And like many of those companies, this stock has been a real dog, he said.

In 2000, the stock was trading in the $100 range, but then it sank to $3 and change after the tech bubble burst; and he said it was "the proverbial worst house in a really bad neighborhood."

The company makes optical chip components, which makes it the very bottom of the optical networking food chain, so it got creamed when there was too much supply and very little demand.

But components for optical networks are in short supply and that makes everything Applied Micro Circuits has more valuable and could make the stock worth owning, he said, adding that the earnings estimates on this company may finally be too low.

Plus, the company makes a new chip that is great for the fiber optic rollout, and has gotten good press in tech trade publications, Cramer said. The new chip "PON" is a likely winner in the networking space, and could take us to the next step beyond DSL.

Moreover, the company's biggest customer, Nortel(NT Quote), is going to get a substantial contract from one of the Baby Bells, Cramer said.

While that might not be a big deal for a company the size of Nortel, it's huge for company like Applied Micro Circuits.

Lightning Round

Cramer was bullish on: Nokia(NOK Quote), Dynegy(DYN Quote), El Paso(EP Quote), VeriFone(PAY Quote), Sara Lee(SLE Quote), BHP Billiton(BHP Quote), Forward Air(FWRD Quote), UPS(UPS Quote), First Marblehead(FMD Quote), Acadia Pharmaceuticals(ACAD Quote), Alcan(AL Quote), UBS(UBS Quote), Legg Mason(LM Quote), Shaw Group(SGR Quote) and Yahoo!(YHOO Quote).

Cramer was bearish on: Taser(TASR Quote), Intel(INTC Quote), Axcan Pharma(AXCA Quote), Sovereign Bancorp(SOV Quote) and H&E Equipment Services(HEES Quote).

For more of Cramer's insights during the most recent Lightning Round, click here.


Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.

  • Loading Comments...
  •  
1 2 3
Next >

SHARE:

  • email
  • print
  • comment
  • digg
  • delicious
  • linkedin
At the time of publication, Cramer was long BHP Billiton and Yahoo!.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on Mad Money are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.





Connect with TheStreet

Back to Yahoo

Dow Jones S&P 500 NASDAQ 10-Year Note
10,023.42 1,069.30 2,112.44 35.03
Oil *
76.05
UP
17.46
UP
2.67
UP
7.12
DOWN
0.30
10 Yr
3.50%
SPDR Gold
107.43
+0.17%
+0.25%
+0.34%
-0.85%
Data delayed 20 minutes

Brokerage Partners

TheStreet Premium Services

All Services