Mad Money Recap
Cramer's 'Mad Money Recap': Next Week's Game Plan
TheStreet.com Staff
05/09/08 - 08:01 PM EDT
Click here for an archive of Cramer's "Mad Money" recaps.
"My game plan for next week is a traditional one," Jim Cramer told viewers of his "Mad Money" TV show Friday. He focused on a handful of companies that he feels will make investors money when they report their earnings next week. On Monday, McDermott (MDR Quote) reports its quarterly results, and Cramer expects its earnings will be light and take the stock lower, creating the perfect opportunity to buy competitor Foster Wheeler (FWLT Quote), a company which he owns for his charitable trust Action Alerts PLUS. On Tuesday, Cramer suggested buying Wal-Mart (WMT Quote), saying he thinks the stock is headed to $60 a share. On the flip side, Cramer said apparel company Liz Claiborne (LIZ Quote) also reports on Tuesday, and that would be the perfect opportunity to sell. He called Liz Claiborne the quintessential sell, saying the company is still years away from a turnaround. Cramer called agriculture giant John Deere (DE Quote), which reports its earnings on Wednesday, one of the premiere American manufacturers and a great brand name. Deere is thriving in the midst of global oil and food shortages and he expects the company to blow out their numbers. Finally, he expects technology giant Hewlett Packard (HPQ Quote), which reports its earnings on Thursday, will post a big quarter. But he said no one will care. "Hewlett is old technology," he said, "and while it's the best of a breed, you just can't invest in it right now." He told viewers to sell half of their positions before the company reports and the other half after they report.
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The Next Big Turnaround
For speculative Friday, Cramer changed his opinion and recommended auto parts maker Visteon (VC Quote) as a speculative stock investors should consider. Cramer said Wall Street used to call the company the "Victim's Club," for it's symbol "VC", but that symbol now stands for the "Victor's Club." According to Cramer, Visteon shares are on the move because of its aggressive cost-cutting measures. Visteon recently reported a stellar quarter, posting a $51 million profit when Wall Street was expecting a $40 million loss. Cramer said the numbers at Visteon are improving across the board, with gross margins up to 7.1% from just 4.2% last year. "That tells me the turnaround is working and makes me a buyer," he said.
Missing Out on a Double
Cramer told viewers how he missed the mark by not recommending Continental Resources (CLR Quote) earlier this year. He said he considered recommending the company in January, but never pulled the trigger. In January, Continental was at $26.15, a 52-week high, and while he thought the company was great, he waited for a pullback. Shortly thereafter, the stock did pull back to $22 a share, but Cramer opted to wait for an even lower price. Then the shares jumped to $28 a share, but still Cramer did nothing. He then missed the move completely as Continental spiked from $25.91 on March 24, 2008 to its current level of $53.22. "The lesson to be learned," he lamented, "is there's no perfect pitch in this game." He said Continental continues on a roll after reporting a great quarter recently, beating Wall Street estimates by four cents a share and predicting production growth of 48% for 2008. "If I had followed my own rules, I would've mentioned this one to you," Cramer said. "As long as oil and gas stays strong, this one keeps going higher."The Wall of Shame's New Member
Cramer updated his "Wall of Shame" list of the worst CEO's. He elevated Martin Sullivan, CEO of AIG (AIG Quote), to the top of the list for his horrible management of the company. "This company is moronic and I don't trust I thing they say," Cramer said. "This is a disgrace." "This stock would go up 10% to 20% if this man were fired," he said, adding he had pleaded to AIG's board of directors to do just that.