Mad Money Recap
Cramer's 'Mad Money' Recap: Hog Wild for Hormel
TheStreet.com Staff
03/12/08 - 07:45 PM EDT
Click here for an archive of Cramer's "Mad Money" recaps.
"It's time to fall in love with the pork," Jim Cramer told viewers of his "Mad Money" TV show Wednesday. With the help of "Bessie," the pot-belly pig, Cramer said pork manufacturers such as Hormel (HRL - Cramer's Take - Stockpickr) and Smithfield Food (SFD - Cramer's Take - Stockpickr) are the perfect stocks for our current economic situation. According to Cramer, there are two reasons to love the pork industry. First, a glut of hogs in the U.S. is making pork products increasingly less expensive. The pork industry is currently experiencing a 5.4% increase in hog production while Canada is importing more hogs and fewer hogs are exported to China.
A Sweet Dividend Play
Cramer took to the high seas to recommend Carnival (CCL - Cramer's Take - Stockpickr) cruise lines as another quality stock with a high-dividend. Due to the recent decline in the company's stock price, Carnival now yields 4.2%. "Carnival is simply a dividend play," he said. Cramer noted the company's strong fundamentals as another reason to own the stock. Carnival trades at just 11 times its earnings, but has a 14.5% long-term growth rate. "This stock is priced for disaster," said Cramer. While many analysts predict a slowing U.S. economy will be bad news for cruise lines, Cramer points out that over 40% on Carnival's business comes from overseas. He also predicted that a slowing U.S. economy will help Carnival because consumers will trade in longer, more expensive vacations for shorter, less expensive Caribbean cruises. According to Cramer, Carnival should rise to a 16 multiple and a stock price of $55, or a 40% premium over its current level.A Cheap Green Play
Cramer welcomed Randall Stuewe, chairman and CEO of Darling International (DAR - Cramer's Take - Stockpickr) to the show to introduce viewers to his business. Stuewe noted coverage for his company is still building. He detailed how Darling collects food waste and converts it into either animal feed or feed stock for bio-fuel. While he did not see his company as the answer to the country's energy needs, he said it could "make a dent" in the alternative fuel market and sees it complementing petroleum-based fuels.Am I Diversified?
Cramer played "Am I Diversified" with callers to see if their portfolios are safe for this volatile market. The first caller's portfolio included: CVS (CVS - Cramer's Take - Stockpickr), Procter & Gamble (PG - Cramer's Take - Stockpickr), Yamana Gold (AUY - Cramer's Take - Stockpickr), Sirius Satellite (SIRI - Cramer's Take - Stockpickr) and Chesapeake Energy (CHK - Cramer's Take - Stockpickr). Cramer said this portfolio was "totally diversified." The second caller had Under Armour (UA - Cramer's Take - Stockpickr), NetSuite (N - Cramer's Take - Stockpickr), EMC (EMC - Cramer's Take - Stockpickr), VMware (VMW - Cramer's Take - Stockpickr) and Lockheed Martin (LMT - Cramer's Take - Stockpickr) as his top holdings and was down 40%. Cramer said this portfolio was definitely not diversified. He called NetSuite, EMC and VMware three of a kind. He suggested adding Altria (MO - Cramer's Take - Stockpickr) or Verizon (VZ - Cramer's Take - Stockpickr) or possibly Schering-Plough (SGP - Cramer's Take - Stockpickr) to help diversify. The third caller's portfolio included Alcoa (AA - Cramer's Take - Stockpickr), Dow Chemical (DOW - Cramer's Take - Stockpickr), Halliburton (HAL - Cramer's Take - Stockpickr), Altria (MO - Cramer's Take - Stockpickr) and Exelon (EXC - Cramer's Take - Stockpickr). Cramer said this was a safe, good, spread-out portfolio with two great dividend stocks.