Mad Money Recap
Cramer's 'Mad Money' Recap: What Yahoo! Should Do
TheStreet.com Staff
10/18/06 - 08:09 PM EDT
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Now that Yahoo! (YHOO) is beginning to stabilize, the Internet giant must "jump-start its growth," Jim Cramer told viewers of his "Mad Money" TV show Wednesday. Cramer, who owns the stock for his charitable trust, Action Alerts PLUS, believes Yahoo! can't grow organically and needs to purchase other companies. Over the next week, Cramer said he's going to give his viewers a list of little Internet companies Yahoo! could buy. The first of these is Bankrate (RATE), a financial Internet stock that helps people find the "best loans" and makes money from advertising, he said. Bankrate could easily be swallowed up and would enable Yahoo! to "expand its long arm across the Net," Cramer said. He advised buying Bankrate, as he believes the stock will go up as housing returns gradually over the next months.
Peruvian Play
Southern Copper (PCU) is "a great way to play one of the last capitalist countries [Peru] standing in Latin America," Cramer told his viewers. One of the best reasons to buy this stock is the yield. In fact, if market players bought Southern Copper and it did nothing for a year, they would be up 8% because of its "glorious" dividend, he said. "Even if copper is cheaper, it's in demand," said Cramer, who added that Southern Copper has a "monster upside surprise" coming. The company just opened a big mine and settled a major labor dispute favorable to Southern Copper's management, he said. Plus, this year the company is not hedging. Removing the cost of hedging should cause an "earnings explosion," Cramer said. He advised people to buy Southern Copper on a pullback.Mail It In
In Cramer's "Mad Mail" segment, when a viewer asked him what keeps a stock like Smith & Wesson (SWHC) going, Cramer said it did well because its expectations were low, and it got backed by the government on litigation risk. It turns out a lot of Smith & Wesson's money went to lawyers, so when that ended, it had more money, he said.Unhealthy
Cramer told another viewer he has been hurt by UnitedHealth Group (UNH), which he owns for his charitable trust, Action Alerts PLUS. He said he backed William McGuire, the company's CEO, and McGuire ended up letting him down. He warned one viewer to stay away from after-hours trading and told another that he prefers FedEx (FDX) to UPS (UPS).Diversificated
In the "Am I Diversified?" segment of the show, Cramer's first caller owned the following five stocks: Sears (SHLD), Apple (AAPL), Time Warner (TWX), AT&T (T) and Cephalon (CEPH). Cramer said he was "enamored" of the portfolio and that the caller was completely diversified. The next caller named the following five stocks: Wal-Mart (WMT), Sirius Satellite Radio (SIRI), Under Armour (UARM), Ford (F) and Chiquita (CQB). As the portfolio contained two speculative stocks, Chiquita and Sirius Satellite, Cramer said he could not bless it. Cramer's last caller had these five stocks: Altria (MO), Ford, Valero Energy (VLO), Yahoo! and Schering-Plough (SGP). He told the caller his portfolio was well played and well done and blessed it diversified.Lightning Round
Cramer was bullish on Genentech (DNA), Caterpillar (CAT), CSX (CSX), Sinclair Broadcasting (SBGI), CBS (CBS), Disney (DIS), Wendy's (WEN), Monsanto (MON), Varian Medical (VAR), Cognizant Technology (CTSH), Reliance Steel (RS), Borders Group (BGP), Kaydon (KDN), E*Trade (ET), J.C. Penney (JCP), Staples (SPLS), Nucor (NUE), LM Ericsson Telephone (ERIC), Nokia (NOK) and Hershey (HSY).
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