Mad Money Recap
Cramer's 'Mad Money' Recap: Broker Bargain Bin
TheStreet.com Staff
03/09/07 - 07:44 PM EST
Click here for an archive of Cramer's "Mad Money" recaps.
A week from now, it will be time to buy Bear Stearns (BSC), Lehman Brothers (LEH) and Goldman Sachs (GS), Jim Cramer told viewers of his "Mad Money" TV show Friday. Goldman Sachs (a stock Cramer owns for his Action Alerts PLUS charitable trust), Lehman and Bear report earnings on Tuesday, Wednesday and Thursday, respectively. Cramer believes that one week from now the analysts that follow these "big three" brokerage firms will have given all the downgrades they're going to give. He predicts that on Friday, when the three are "painfully low," market players will be able to get "incredible bargains" in these stocks. Cramer believes the bears will have to push the brokers down even if they report good numbers "in order to frighten people into selling." "Stocks react to whoever shoots first, not how good the numbers are," Cramer explained. "And right now the bears have to shoot first." When a quarter comes out, it becomes "imperative" for the bears to lie and spread rumors to send the stock down, he said. For those who believe that Cramer's being "too cynical," he reminded viewers that he's been in this game for decades and that "when the bears are out to destroy a stock, they will do it." "The bears will paint the tape in bright red, which is sell," Cramer said. Then on Friday, people will be able to buy "some of the best companies around."
A Hoops Play
Akamai Technologies (AKAM) is the one stock that is the "perfect play on March Madness," Cramer told viewers. It was the March Madness play last year, and it will be the one this year as well, no matter which team wins or loses, he said. There are millions of people who watch March Madness, the NCAA college basketball championship, and Akamai makes that widespread viewership possible, Cramer said. The company creates global delivery services for Internet content and streaming media, allowing people to watch the games online. Because it is the "leading company for optimizing online video," Akamai will benefit from March Madness, Cramer said. Akamai is the last stock "we can savage from the vicious selloff" that took place last week, said Cramer. "This one is way off its high, and it doesn't deserve to be," he said. "Personally, I'm offended that it's down here." This week, Cramer searched through the rubble of the recent selloff for stocks that don't deserve to be down and should be seen as buy opportunities. On Tuesday's show he offered General Cable (BGC), on Wednesday it was First Solar(FSLR), and on Thursday it was Chemed (CHE).
At this time of year, Cramer believes, Akamai should be selling at a high price, but it is instead trading at a discount. The company, which reported earnings about a month ago, gave guidance that "was way up from the forecast," he said.
Not only is Akamai a "pick from the rubble" play, it is also a March Madness stock and a play on the bandwidth scarcity, Cramer said, and people should put some money into it.
Two IPO Don'ts
There is a distinct line between good and bad initial public offerings, Cramer told his viewers. Taking a cautionary stance, he said there are two upcoming IPOs he would not buy, or even go near, unless the bankers who priced them cut the prices. The two names people should avoid are Aruba Networks, which will trade under the symbol ARUN, and Glu Mobile, which is slated to trade under GLUU, Cramer said. Cramer said he wouldn't buy either one even at the lower end of their price ranges. Aruba is not a bad business, but its two biggest competitors are the "heavy hitters" Motorola (MOT) and Cisco (CSCO), he said. And another problem is that Aruba sells its products through vendors, its biggest one being Alcatel-Lucent (ALU), a bear in Cramer's book. Glu Mobile, which makes mobile games for cell phones and PDAs, has a current pricing range of $10 to $12 a share, which Cramer considers "best-of-breed" prices. If it were below $8 a share, he said, he might consider recommending it, but definitely not up here.Mad Mail and Sudden Death
In the show's "Mad Mail" segment, Cramer said he considers Dynegy's (DYN) CEO Bruce Williamson "one of the best in the country." Cramer believes the stock is going higher and should reach $10. Dynegy closed at $8.58 Friday. In response to another viewer who wrote in, Cramer said if he had to buy an airline it would be UAL (UAUA). He said he would own an airline as a speculative stock but not as an investment. During the show's "Sudden Death" round, Cramer was bearish on Micron Technology (MU) and Pfizer (PFE).Lightning Round
Cramer was bullish on RPM International (RPM), Six Flags (SIX), General Maritime (GMR), Halliburton (HAL), Staples (SPLS), Hewlett-Packard (HPQ), Under Armour (UA), Charter Communications (CHTR) and Graco (GGG).Want more Cramer? Check out Jim's rules and commandments for investing from his popular book by clicking here.
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