Mad Money Recap
Cramer's 'Mad Money' Recap: Up the Dow Staircase
TheStreet.com Staff
05/21/07 - 07:32 PM EDT
Click here for an archive of Cramer's "Mad Money" recaps.
The Dow Jones Industrial Average is going to 14,548 this year, Jim Cramer told viewers of his "Mad Money" TV show Monday. "The sin of not being bullish enough" is not something he's been guilty of often, he said. Cramer believes that we are finally "out of the doldrums" and that the market will be able to take on new highs without much resistance. "We are about to go up another 1,000 points in the Dow from right here to year-end," Cramer said. Every year, Cramer comes up with a prediction for the Dow Jones by doing what he calls a "bottom-up analysis" of the index. What this means, he explained, is that he goes through each of the 30 stocks in the Dow and for each of them he determines what price the stock is headed to by the end of the year. This week, Cramer said he's dedicating a five-part series to the Dow and to why he believes it's headed to 14,548. Cramer said that each day he will talk about six stocks in the Dow and where he believes they are going.
Dow Fever
Cramer began his weeklong series giving his take on the first six names in the Dow. Starting with Alcoa (AA Quote - Cramer on AA - Stock Picks), he said that this is a stock that has been on a "rampage." It is up 30% already, and Cramer said he sees it going to either $42, in the event it gets taken over, or $45 on its own earnings. American Express (AXP Quote - Cramer on AXP - Stock Picks), the second Dow stock Cramer named, is up only 5% this year, he said. The company's "remarkable CEO keeps building," but the stock can't keep up, he said. In fact, it's below MasterCard (MA Quote - Cramer on MA - Stock Picks) in terms of valuation. Cramer said he expects American Express to reach $72 by the end of 2007 as it plays catch-up to MasterCard. AIG (AIG Quote - Cramer on AIG - Stock Picks), a stock he owns for his charitable trust, Action Alerts PLUS, is "another name that's not getting the respect it deserves," Cramer said. This is a company that has a "gigantic" business in China and that recently raised its cash dividend by 21.2%. According to Cramer, AIG could see another 10 points this year. Moving on, he said AT&T (T Quote - Cramer on T - Stock Picks) is up 13% already, and he predicted that it should "inch its way" to $45 by year-end. Boeing (BA Quote - Cramer on BA - Stock Picks), Cramer continued, should go beyond his original forecast of $100 and reach $105. The aerospace bull market is one of the most "tremendous" bull markets because airlines refinance their balance sheets, buy more planes and create pin action for Boeing, he said.Credit TSS
The next company that could be bought and whose stock players should consider owning is Total System Services (TSS Quote - Cramer on TSS - Stock Picks), a debit and credit card information processor, Cramer told viewers. All of the financial information processing companies are being taken over left and right, he said. He said it's amazing how many companies out there are still independent. TSS is the subsidiary of Synovus Financial (SNV Quote - Cramer on SNV - Stock Picks), and though Cramer doesn't usually recommend a subsidiary over a parent company, he believes that TSS could see a lot of upside if it gets sold to a private-equity firm. Moreover, TSS has great fundamentals coupled with "solid" double-digit growth, no debt to speak of and margin expansion, Cramer said. One thing making this difficult is that he can't determine whether TSS or Automatic Data Processing (ADP Quote - Cramer on ADP - Stock Picks), another transaction processing company, will get taken over first. "If it were up to me, I would own them both," Cramer said. However, he did say that TSS has the "added advantage" of being cheap and not to pay more than $34 for TSS or it would "cut off the upside." During his "Sudden Death" round, Cramer was bearish on Synopsys (SNPS Quote - Cramer on SNPS - Stock Picks).Spartan Growth
John Sztykiel, Spartan Motors' (SPAR Quote - Cramer on SPAR - Stock Picks) president and CEO, joined Cramer on his show and said he sees a "tremendous amount of profitable growth ahead for the company." "We appreciate where we've been and where we've gone," Sztykiel said. As people look at the company's business model, they'll see Spartan is a company focused on "three great growth opportunities": mind-resistant ambush-protected vehicles, the RV business and emergency vehicles. Cramer called Spartan "a great story." He said the stock has paused here for a moment but that it is in "bull-market mode." To view Cramer's interview with John Sztykiel, please click here.Lightning Round
Cramer was bullish on Trinity Industries (TRN Quote - Cramer on TRN - Stock Picks), Darling International (DAR Quote - Cramer on DAR - Stock Picks), Exxon Mobil (XOM Quote - Cramer on XOM - Stock Picks), Chevron (CVX Quote - Cramer on CVX - Stock Picks), Cameco (CCJ Quote - Cramer on CCJ - Stock Picks), Hewlett-Packard (HPQ Quote - Cramer on HPQ - Stock Picks), News Corp. (NWS Quote - Cramer on NWS - Stock Picks), Qualcomm (QCOM Quote - Cramer on QCOM - Stock Picks), Texas Instruments (TXN Quote - Cramer on TXN - Stock Picks), Nokia (NOK Quote - Cramer on NOK - Stock Picks), Atwood Oceanics (ATW Quote - Cramer on ATW - Stock Picks) and Halliburton (HAL Quote - Cramer on HAL - Stock Picks). Cramer was bearish on Blockbuster (BBI Quote - Cramer on BBI - Stock Picks), FreightCar America (RAIL Quote - Cramer on RAIL - Stock Picks), Vaalco Energy (EGY Quote - Cramer on EGY - Stock Picks), Evergreen Solar (ESLR Quote - Cramer on ESLR - Stock Picks) and Brightpoint (CELL Quote - Cramer on CELL - Stock Picks). For more of Cramer's insights during the Lightning Round, click here.Want more Cramer? Check out Jim's rules and commandments for investing from his popular book by clicking here.