Cramer's 'Mad Money' Recap: Bling's the Thing
TheStreet.com Staff
12/08/05 - 07:30 PM EST
Click here for an archive of Cramer's "Mad Money" recaps.
Americans gotta have their bling, and if you can't afford a diamond, you'll buy something from
Charles & Colvard (CTHR Quote), Jim Cramer said Thursday on "Mad Money."
Charles & Colvard's synthetic moissanite jewels cost one-tenth the price of a diamond but are "more brilliant and more lustrous than diamonds," he said. Moissanite jewelry is carried at more than 700
J.C. Penney (JCP Quote) stores, said Cramer, and it is being tested at
Zale (ZLC Quote) stores and
Helzberg, owned by
Berkshire Hathaway (BRK.A Quote).
Cramer doesn't believe moissanite will penetrate the high-end diamond market, which is in an "unbelievable bull market." He would recommend
Anglo American (AAUK Quote), which owns 40% of
De Beers, as the best play on real diamonds. But Cramer said high-end and low-end jewelry market can work at the same time as we become a class society, and because "at least in the medium term, America is not going to have a strong economy."
Charles & Colvard has posted triple-digit growth since the third quarter of 2004. For 2005, earnings are expected to be up 274%, Cramer said.
"This is the right kind of company with the right kind of product and the right kind of stock," he said.
In response to a question about the high short position in Charles & Colvard, Cramer said the stock "feels a little
Hansen (HANS Quote)-like" in that shorts "don't believe it can get better."
In response to a question about
Tiffany (TIF Quote), Cramer said he believes Tiffany might be ready to bounce back, and he is "upgrading Tiffany right here, right now."
Water, Water, Isn't Everywhere
A natural resource even more scarce and precious than diamonds is water, said Cramer. That may seem counterintuitive, since 70% of the earth's surface is covered by water. But it costs money to make fresh water potable, and desalinization has yet to become economical on a large scale.
Water consumption in the 20th century has grown at twice the rate of population growth, Cramer said, and over the next 20 years, even the most conservative estimates expect hundreds of billions of dollars will be spent on water infrastructure. Cramer owns
Aqua America (WTR Quote), which operates public water utilities in a number of cities, but Aqua America "doesn't expose you to the massive nature of our water shortage," he said.
A "brilliant way to play the water shortage" is through an ETF,
PowerShares Water Resources (PHO Quote) Cramer said. PHO, which just launched this week, is composed of 64% small-cap stocks, but also contains large companies such as
Suez (SZE Quote) and
Veolia Environnement (VE Quote).
Don't pay up for PHO, though, said Cramer. An ETF is simply a basket of stocks trading as one stock. (Check out this
Street.com article for more information on this ETF.)
In response to a question about an international water play, Cramer said Suez would be the way to play it.
Cramer also said that
Walter Industries' (WLT Quote) plan to spin off its water business is a great idea.
Pick of the Week
Cramer's "Pick of the Week" is
Salesforce.com (CRM Quote). The company makes customer relationship management software that competes with
Microsoft (MSFT Quote),
SAP (SAP Quote) and
Oracle (ORCL Quote). Salesforce.com's advantage is it can deliver its software entirely over the Web, Cramer said.
CRM software was a $3.5 billion market in 2004, and Salesforce.com has just 3.2% market share. But the market for Web-based, on-demand CRM software is growing faster than the traditional market, which means Salesforce.com can't help but to pick up market share, Cramer said.
The stock isn't cheap, he noted, but it's worth a premium for its growth and for the fact the company has never missed earnings. An added bonus is the fact the stock doesn't get the coverage it deserves on Wall Street, he said. So, "get in now before it becomes the darling of every growth fund in town."
Nucor CEO Chats
Daniel DiMicco, CEO of steelmaker
Nucor (NUE Quote), joined Cramer by telephone. Cramer asked DiMicco if steel imports were threatening Nucor's pricing.
"There's always risk out there in any business," said DiMicco.
"You just boosted the dividend. That to me says you've got confidence," said Cramer.
DiMicco said he is "very, very confident in the future of this company. We've weathered storms before and come through them extremely strong."
Cramer asked about Nucor's interest in Canadian steel producer
Dofasco. "I don't want you doing that...you're not going to do any of this takeover game, are you?" asked Cramer. "You're not going to do an overpay, right?"
"We have a very disciplined acquisition strategy," said DiMicco. "We will not overpay." DiMicco said his company has a great track record of acquisitions, and "that won't change."
Cramer summed up the interview saying a recent downgrade of Nucor by J.P. Morgan was arbitrary and wrong, and he believes the stock is headed higher.
Closing Thoughts
Commenting on news after the close, Cramer said
Intel's (INTC Quote) quarterly update was unimpressive.
Cramer also isn't enamored with
Electronic Arts' (ERTS Quote) acquisition of
Jamdat Mobile (JMDT Quote). "Why'd you have to go and do that?" he asked.
Finally, Cramer is now blessing
Chesapeake Energy (CHK Quote) "because they did their gigantic equity offering that I so feared."
Lightning Round
Bullish
Cramer was bullish on
Toyota Motor (TM Quote),
El Paso (EP Quote),
Chesapeake Energy (CHK Quote),
Ingersoll-Rand (IR Quote),
Caterpillar (CAT Quote),
Deckers Outdoor (DECK Quote),
Texas Instruments (TXN Quote),
OraSure Technologies (OSUR Quote),
Bank of America (BAC Quote),
First Marblehead (FMD Quote),
Schering-Plough (SGP Quote),
Genentech (DNA Quote),
American Science & Engineering (ASEI Quote),
Thermo Electron (TMO Quote),
L-3 Communications (LLL Quote),
Radiant Systems (RADS Quote),
Hewlett-Packard (HPQ Quote),
Plum Creek Timber (PCL Quote),
Weyerhaeuser (WY Quote),
Oshkosh Truck (OSK Quote),
Salesforce.com (CRM Quote),
Sify (SIFY Quote) and
China Mobile (CHL Quote).
Bearish
Cramer was bearish on
General Motors (GM Quote),
Olympic Steel (ZEUS Quote),
Pfizer (PFE Quote),
Bristol Myers Squibb (BMY Quote),
Merck (MRK Quote),
H&R Block (HRB Quote),
Flamel Technologies (FLML Quote),
NCR (NCR Quote),
United Natural Foods (UNFI Quote),
Abraxas Petroleum (ABP Quote),
International Paper (IP Quote),
Rambus (RMBS Quote),
Ford (F Quote),
Oracle (ORCL Quote),
EMC (EMC Quote),
Cisco Systems (CSCO Quote),
RPC (RES Quote),
Sun Microsystems (SUNW Quote),
Dell (DELL Quote),
William Lyon Homes (WLS Quote) and
China Techfaith Wireless (CNTF Quote).
For more of Cramer's commentary during the Lightning Round, click here.
