Mad Money Recap
Cramer's 'Mad Money' Recap: July 24
Scott Rutt
07/24/08 - 07:31 PM EDT
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"On days like today, you need to look for the positives," Jim Cramer told viewers of his "Mad Money" TV show Thursday. He said that today's market decline was primarily due to profit taking in the financial sector, but reminded viewers that there's always something positive you can find on down days. Despite a 283-point drop in the Dow, $300 billion is going to the Federal Housing Administration to help bail out struggling homeowners and more importantly gas prices continue to fall and fall hard, he said. That's why he's looking for stocks that will benefit from falling fuel prices. According to Cramer, that stock is Walt Disney (DIS Quote). Despite being beaten up by the market and analysts over fears of rising airfares, Disney stock has positives if one delves deep into its business, he said. While Cramer agreed that airfares are rising, he noted a recent study which stated that auto traffic to Disney World has been steadily increasing, not decreasing. "The analysts are only counting airplanes," he said. In addition, room rates around Disney World have been falling, with 75% of rooms now being classified as moderate to value in price. Furthermore, Cramer said the weak U.S. dollar makes travelling to Disney World cheaper for the rest of the world. Cramer also likes Disney's other businesses such as ESPN, a premium cable property that he said is doing exceptionally well. He called analysts "way behind the curve" in their estimates for the stock.
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Tupperware's New Image
Cramer recommended Tupperware (TUP Quote) as another company poised to take advantage of falling gas prices. Since he first recommended the stock on Oct. 8, 2006, then shares of the company are up 96%.
Martha's Magic
In the Thursday "Sell Block" segment, Cramer did the unthinkable, and released Martha Stewart Living Omnimedia (MSO Quote) from prison and recommended buying the stock. Cramer, who had been negative on the company for years, said he now feels MSO is poised for a turnaround. Cramer acknowledged all of the company's negatives, including softening magazine revenues, CEO Susan Lyon's recent departure from the company, partner K-mart cancelling its contract with the company, and the fact that Martha herself is too involved in the company. But, he said, "all of these facts can positives as well." Cramer sees Martha Stewart Living as a turnaround play from just a publisher to a merchandising powerhouse. He said that he welcomed Susan Lyons' resignation, saying that it's time for someone new at the helm. Cramer welcomed Charles Koppelman as the company's new CEO. Cramer offered praise to Martha herself, saying that Martha has always done an amazing job for the company. He said that Martha's involvement in the company should not be seen as a negative. Cramer also noted several other positives at MSO, including new merchandising deals with Wal-Mart (WMT Quote), Costco (COST Quote) and a continued partnership with KB Home (KBH Quote). He also said the company's expansion overseas is strong. "There is no better sign of a bottom than universal negativity," said Cramer. While he did not recommending buying the stock before the company reports next week, he did advocate buying in under $8 a share.