Cramer's 'Mad Money' Recap: Capitalizing on Bad News
TheStreet.com Staff
01/11/08 - 07:44 PM EST
Click here for an archive of Cramer's "Mad Money" recaps.
"Expectations may have finally fallen far enough to create some genuine moneymaking opportunities," Jim Cramer told viewers of his "Mad Money" TV show Friday.
If the news continues to get worse, it only increases the chances that the
Federal Reserve will lower rates, and that's great news for stocks, he says.
Here's Cramer's game plan for next week. He recommends buying
Apple(AAPL) ahead of the MacWorld Expo, which starts Monday in San Francisco. To be sure, Apple shares have been clobbered in recent days, and there likely won't be any product announcements as sexy as the iPhone was last year, he says.
However, with these low expectations and Steve Jobs being a great speaker, Apple stock should do well, he says.
On Tuesday,
Citigroup (C) and
Intel (INTC) report their earnings.
Cramer expects Citigroup, which he owns for his charitable trust,
Action Alerts PLUS, to bottom after its earnings are announced. Intel, he says, has expectations that are so low that even no news should take that company's stock higher.
On Wednesday,
Wells Fargo (WFC) and
JPMorgan Chase (JPM) report. Cramer likes Wells Fargo on the possibility it could be a buyer of
Washington Mutual (WM). He said he would buy JPMorgan on Tuesday afternoon, but only if Citigroup shares spike after its conference call with analysts.
Thursday may be problematic, Cramer points out, when
Merrill Lynch (MER) and
Washington Mutual (WM) report.
Both, he expects, will report terrible numbers and sees no opportunities in either stock. He does, however, see opportunity in
Parker Hannifin (PH) which also reports on Thursday. He rates this company a buy, saying it "is firing on all cylinders," and has a buyback program.
Finally on Friday, Cramer likes
Schlumberger (SLB) and would be a buyer, but only if oil prices rise next week. If oil goes down, "take a pass," says Cramer.
Stick With Gold
"Gold," Cramer says, "is one area that has delivered and should keep delivering."
His absolute favorite gold stock remains
Yamana Gold (AUY).
Cramer welcomed Peter Marrone, chairman and CEO of Yamana Gold, to the show for an update. Marrone reiterated that his company produces gold at $250 to $270 per ounce, well below the industry average.
Marrone said his company is continuing to expand its operations and feels there is a "perfect storm" that will cause gold prices to rise significantly higher.
Cramer also likes
Barrick Gold (ABX) but feels Yamana can provide insurance for your portfolio and would be a buyer.
An Industrial Stock on the Rise
One sector that will benefit from continued interest rate cuts will be the beat-up industrial companies, Cramer says.
The company he likes most in this group is
Terex (TX).
Terex, the No. 3 equipment maker in the world, recently hit a 52-week low. Cramer said that's just wrong because two-thirds of the company's sales come from outside the U.S.
The company missed earnings by 2 cents a share when it last reported, but it did reaffirm its guidance. "That doesn't justify a $30 price drop," Cramer said. Terex has a $700 million buyback and strong buying from several of the company's executives.
"When the Fed cuts, the industrials will benefit," and Cramer thinks Terex is the way to play this forgotten sector.
Mad Mail
In this segment, Cramer told a viewer that he is bullish on
DuPont (DD) as it becomes less levered to housing.
Lightning Round
Cramer was bullish on
Research In Motion (RIMM),
Costco (COST),
Tenet Healthcare (THC),
Yamana Gold (AUY),
Newmont Mining (NEM),
Barrick Gold (ABX),
Mosaic (MOS),
Bunge (BG),
Agrium (AGU),
Deere (DE),
Monsanto (MON)
and
Covance (CVD)
Cramer was bearish on
Lowe's (LOW),
Harley-Davidson (HOG),
Oceanfreight (OCNF),
Steak n Shake (SNS)
and
FARO Technologies (FARO)
Want more Cramer? Check out Jim's rules and commandments for investing by
clicking here.
For more of Cramer's insights during the Lightning Round, click here.
