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 - Cramer on CTHR - Stock Picks), 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 - Cramer on JCP - Stock Picks) stores, said Cramer, and it is being tested at
Zale (ZLC Quote - Cramer on ZLC - Stock Picks) stores and
Helzberg, owned by
Berkshire Hathaway (BRK.A Quote - Cramer on BRK.A - Stock Picks).
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 - Cramer on AAUK - Stock Picks), 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 - Cramer on HANS - Stock Picks)-like" in that shorts "don't believe it can get better."
In response to a question about
Tiffany (TIF Quote - Cramer on TIF - Stock Picks), 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 - Cramer on WTR - Stock Picks), 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 on PHO - Stock Picks) 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 - Cramer on SZE - Stock Picks) and
Veolia Environnement (VE Quote - Cramer on VE - Stock Picks).
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 - Cramer on WLT - Stock Picks) 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 - Cramer on CRM - Stock Picks). The company makes customer relationship management software that competes with
Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks),
SAP (SAP Quote - Cramer on SAP - Stock Picks) and
Oracle (ORCL Quote - Cramer on ORCL - Stock Picks). 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 - Cramer on NUE - Stock Picks), 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 - Cramer on INTC - Stock Picks) quarterly update was unimpressive.
Cramer also isn't enamored with
Electronic Arts' (ERTS Quote - Cramer on ERTS - Stock Picks) acquisition of
Jamdat Mobile (JMDT Quote - Cramer on JMDT - Stock Picks). "Why'd you have to go and do that?" he asked.
Finally, Cramer is now blessing
Chesapeake Energy (CHK Quote - Cramer on CHK - Stock Picks) "because they did their gigantic equity offering that I so feared."
Lightning Round
Bullish
Cramer was bullish on
Toyota Motor (TM Quote - Cramer on TM - Stock Picks),
El Paso (EP Quote - Cramer on EP - Stock Picks),
Chesapeake Energy (CHK Quote - Cramer on CHK - Stock Picks),
Ingersoll-Rand (IR Quote - Cramer on IR - Stock Picks),
Caterpillar (CAT Quote - Cramer on CAT - Stock Picks),
Deckers Outdoor (DECK Quote - Cramer on DECK - Stock Picks),
Texas Instruments (TXN Quote - Cramer on TXN - Stock Picks),
OraSure Technologies (OSUR Quote - Cramer on OSUR - Stock Picks),
Bank of America (BAC Quote - Cramer on BAC - Stock Picks),
First Marblehead (FMD Quote - Cramer on FMD - Stock Picks),
Schering-Plough (SGP Quote - Cramer on SGP - Stock Picks),
Genentech (DNA Quote - Cramer on DNA - Stock Picks),
American Science & Engineering (ASEI Quote - Cramer on ASEI - Stock Picks),
Thermo Electron (TMO Quote - Cramer on TMO - Stock Picks),
L-3 Communications (LLL Quote - Cramer on LLL - Stock Picks),
Radiant Systems (RADS Quote - Cramer on RADS - Stock Picks),
Hewlett-Packard (HPQ Quote - Cramer on HPQ - Stock Picks),
Plum Creek Timber (PCL Quote - Cramer on PCL - Stock Picks),
Weyerhaeuser (WY Quote - Cramer on WY - Stock Picks),
Oshkosh Truck (OSK Quote - Cramer on OSK - Stock Picks),
Salesforce.com (CRM Quote - Cramer on CRM - Stock Picks),
Sify (SIFY Quote - Cramer on SIFY - Stock Picks) and
China Mobile (CHL Quote - Cramer on CHL - Stock Picks).
Bearish
Cramer was bearish on
General Motors (GM Quote - Cramer on GM - Stock Picks),
Olympic Steel (ZEUS Quote - Cramer on ZEUS - Stock Picks),
Pfizer (PFE Quote - Cramer on PFE - Stock Picks),
Bristol Myers Squibb (BMY Quote - Cramer on BMY - Stock Picks),
Merck (MRK Quote - Cramer on MRK - Stock Picks),
H&R Block (HRB Quote - Cramer on HRB - Stock Picks),
Flamel Technologies (FLML Quote - Cramer on FLML - Stock Picks),
NCR (NCR Quote - Cramer on NCR - Stock Picks),
United Natural Foods (UNFI Quote - Cramer on UNFI - Stock Picks),
Abraxas Petroleum (ABP Quote - Cramer on ABP - Stock Picks),
International Paper (IP Quote - Cramer on IP - Stock Picks),
Rambus (RMBS Quote - Cramer on RMBS - Stock Picks),
Ford (F Quote - Cramer on F - Stock Picks),
Oracle (ORCL Quote - Cramer on ORCL - Stock Picks),
EMC (EMC Quote - Cramer on EMC - Stock Picks),
Cisco Systems (CSCO Quote - Cramer on CSCO - Stock Picks),
RPC (RES Quote - Cramer on RES - Stock Picks),
Sun Microsystems (SUNW Quote - Cramer on SUNW - Stock Picks),
Dell (DELL Quote - Cramer on DELL - Stock Picks),
William Lyon Homes (WLS Quote - Cramer on WLS - Stock Picks) and
China Techfaith Wireless (CNTF Quote - Cramer on CNTF - Stock Picks).
For more of Cramer's commentary during the Lightning Round, click here.
