Cramer's TheStreet.com TV
TheStreet.com TV Recap: Dow Lowdown
TheStreet.com Staff
02/13/07 - 02:16 PM EST
The desire of mineral companies to buy "undermanaged" companies is so great that they can't resist the recent Alcoa (AA Quote) acquisition frenzy, Jim Cramer said on the TheStreet.com TV's Wall Street Confidential video Tuesday.
"Everybody recognizes that Alcoa has been a country club and it's time for it to change," he told host Gregg Greenberg.
Cramer said it's more likely the Rio Tinto (RTP Quote) will buy Alcoa; the other rumored suitor is BHP Billiton (BHP Quote). Cramer believes Rio Tinto is in the lead because after deciding to return a "huge amount of money" to shareholders via buybacks, BHP Billiton doesn't have the "wherewithal to do the Alcoa deal."
Speaking of returning money to shareholders, Cramer said he doesn't like 3M's (MMM Quote) recent buyback, even though the stock is up about $2 today.
He called 3M's quarter "really bad," and said he doesn't understand why it won't put its money behind its business. He said he would take advantage of the short-term pop here to sell.
Greenberg mentioned General Motors (GM Quote) as another Dow stock hitting all-time highs.
Cramer said that although he believes it was a good trading call to get out of GM when businessman Jerry York left the company's board, it has now decided to be a small car company.
"Historically this company has been so fixated on being the largest car company that it forgot that that costs a lot of money," he said. "And if it gets away from that particular mantra, it can be a better investment. It'll lose its bragging rights, but it will make more money for its shareholders."
At the time of publication, Cramer had no positions in stocks mentioned.