Mad Money Recap
Cramer's 'Mad Money' Recap: GameStop's Green Christmas
TheStreet.com Staff
11/14/07 - 07:57 PM EST
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Not only did Wal-Mart's (WMT Quote) quarter make the dismal market a bit brighter, but its conference call was full of great investment ideas, Jim Cramer told viewers of his "Mad Money" TV show Wednesday. One of the nuggets Cramer gleaned from the call was how well video game retailer GameStop(GME Quote) will do during the holidays. Wal-Mart said consumer electronics will continue to be strong for them this Christmas, notiing such items as global positioning systems, televisions, digital cameras, computers and video games. However, Cramer believes digital cameras are "a no-go" because they're made in China, which makes them too hard to buy right now. He also doesn't like Garmin (GRMN Quote) as a play on GPS because of its current bidding war with TomTom for Tele Atlas. Concerning computers, Cramer said he's been a backer of Hewlett-Packard (HPQ Quote), which he owns for his charitable trust, Action Alerts PLUS, but Wal-Mart is not a big customer of that computer manufacturer. Wal-Mart does sell Dell (DELL Quote), but between Dell and Hewlett-Packard, Cramer said he prefers the latter. That leaves us with TVs and video games, he said. For video games, Activision (ATVI Quote) may seem like a possible company to invest in, but TheStreet.com's Michael Comeau has reported that expectations at the company have gotten too high.
Tune in Corning
Wal-Mart said in its call that it is also moving a lot of TV sets. However, Cramer said there are too many companies in that space and competition is fierce. However, one company market players should consider is Corning (GLW Quote), which makes the glass needed in liquid crystal display televisions and which is the best in breed in its business, he said. The stock, which Cramer owns for Action Alerts PLUS, is trading below where it was when it gave conservative guidance in October, he said. However, recently Corning raised guidance, but it's still not trading as high as it should be. "With its raised outlook it should get a lot more love from the Street" and raised estimates from analysts, Cramer said. Also in Corning's conference call, the company mentioned "tight supply and demand," which means high pricing for Corning, he said. In addition, he said it has bendable fiber, which hasn't been priced into the stock, and which "big spender" Verizon (VZ Quote) should be gobbling up. "Some companies deserve to be cheap, but Corning is not one of them," said Cramer, adding it is heading much higher.Am I Diversified?
During the "Am I Diversified?" game, the first player called out the following five companies: Sirius Satellite Radio (SIRI Quote), Ford (F Quote), AT&T (T Quote), McDonald's (MCD Quote) and Human Genome Sciences (HGSI Quote). Cramer called HGSI too speculative and said he'd rather see the caller in a stock like Celgene (CELG Quote) instead. The next caller said he owned these five plays: Daimler (DAI Quote), Coca-Cola (KO Quote), Google (GOOG Quote), Celgene and CVRD (RIO Quote). "That is what we're looking for," Cramer said, blessing the portfolio as diversified. The final caller asked if he was diversified with these five stocks: Apple (AAPL Quote), Occidental Petroleum (OXY Quote), MetLife (MET Quote), Cisco (CSCO Quote) and Yum! Brands (YUM Quote) Cramer suggested the caller swap out of MetLife and into Prudential (PRU Quote). He also said Cisco and Apple are both in technology. He advised him to sell Cisco and pick up a defense contractor or healthcare company.Water Bill Refreshes Tetra Tech
Tetra Tech (TTEK Quote) CEO Dan Batrack joined Cramer on the show, where he said his company beat fourth-quarter expectations due to increased margins. "We had a great performance on earnings," Batrack said, noting margins for Tetra Tech's civil engineering business were up 50%. "We really focused on making sure we hit or exceed all of our forecasts." The recent water bill Congress passed will create much upside for the company, Batrack continued. Half of the $23 billion for around 1,000 earmarked water infrastructure projects are expected to come out within the next five years, he said. This is the heart of Tetra Tech's business and "we've never seen business stronger," he added.