Mad Money Recap
Cramer's 'Mad Money' Recap for July 23
Scott Rutt
07/23/08 - 07:49 PM EDT
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People better start caring about General Electric (GE Quote), Jim Cramer told viewers of his "Mad Money" TV show Wednesday. He argued that while the company's share fells along with the financial sector, it has not rebounded in recent days, leaving it a prime buying opportunity. Cramer cited an article is this weekend's BusinessWeek, which called into focus GE's exposure to the financial sector. Cramer, though, said GE is not just a financial. Unlike the financials, GE, with many other businesses, actually made money this quarter, beating Wall Street's expectations, he said. Furthermore, Cramer noted that the company has plans to sell of its under-performing consumer and industrial segment. The remaining segments, such as its infrastructure division, should all perform well in the coming year. Cramer said infrastructure companies like Fluor (FLR Quote), Jacobs Engineering (JEC Quote) and ABB (ABB Quote), are up 36%, 24% and 15% respectively year over year, while GE is down 28% over the same period. Cramer said he also liked GE's wind power business and sees its healthcare segments as an additional driver of growth for the company. He also noted the company's international exposure, which accounts for 50% of the company's sales, and 20% of its sales in emerging markets are further positives for the stock. Cramer also likes the company's 4.5% dividend yield. But perhaps GE's strongest case, said Cramer, is its recent plans to partner with Abu Dhabi's Mubadala sovereign wealth fund. "The deal can be looked at as almost a second stock buyback program," said Cramer, who noted that the fund's 10% stake in GE could be worth as much as $3.4 billion worth of stock.
Cramer: Still Shopping at Costco |
Happier Days
"Happier days could be here again," Cramer told viewers. He pondered what would happen if gas and grain prices fell and home price depreciation finally stopped.
Am I Diversified?
Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included Altria (MO Quote), Dow Chemical (DOW Quote), Alcoa (AA Quote), Excelon (EXC Quote) and McDonald's (MCD Quote). Cramer called this batch of stocks truly a great portfolio. He noted that he owns both Altria and McDonalds for his charitable trust Action Alerts PLUS. The second caller's top holdings included IBM (IBM Quote), Johnson & Johnson (JNJ Quote), Bristol Myers-Squibb (BMY Quote), Coca-Cola (KO Quote) and Colgate-Palmolive (CL Quote). Cramer noted that Bristol Meyers and Johnson & Johnson are too similar. He recommended trading Bristol in favor of an oil or financial company. The third caller had GrafTech (GTI Quote), Merck (MRK Quote), CVRD (RIO Quote), Halliburton (HAL Quote) and JP Morgan (JPM Quote) as their top five stocks. Cramer said he'd sell GrafTech in favor of an industrial company like General Electric.Mad Mail
In this segment, Cramer told a viewer that while he now believes the merger between Sirius Satellite (SIRI Quote) and XM Satellite (XMSR Quote) will get done, with the additional financing needed, he's not a fan of the common stock. He recommended Sirius as a speculative stock only. Cramer told a second viewer he's a buyer of XTO Energy (XTO Quote) given its recent retreat.