'RealMoney' Radio Recap: Cubic's Measure
The San Diego contractor makes systems for defense and public transportation. The company and others like it stand to profit in the continuing fallout of last month's London subway bombings, Cramer told his listeners Wednesday.
New York City announced Tuesday it will install 1,000 video cameras and 300 motion sensors in its subways to improve security. But lead contractor Lockheed Martin (LMT) is too big a company to see an impact from a $212 million contract, Cramer said.
Subcontractors such as Cubic, with $722 million in revenue last year, are small enough that they could see a benefit. Cramer advised using limit orders to purchase Cubic and said he wouldn't advise purchasing the stock at price much above $17. On Wednesday, the stock rose 5% to $18 and change.A caller asked whether Google (GOOG) is overvalued. Cramer said it is not based on a multiple of earnings. The faster a company is growing, the higher the multiple it deserves, Cramer said, adding that Google is worth $350 based on his "conservative" estimate of $7 per share in earnings in 2006 and an earnings multiple of 50.
Picks and PansCramer then rattled off a list of stocks and what he thinks about them right here.
Citigroup (C): OK, but Wachovia (WB) is better.
KLA-Tencor (KLAC): Good. Should do well in the coming tech rally.
Polo Ralph Lauren (RL): Excellent. High-end retailers and manufacturers continue to do well.
Advanced Micro Devices (AMD): OK. Should do well in the coming tech rally.
Visteon (VC): "Not a fan. Sell."
Amgen (AMGN), Comcast (CMCSA), Genentech (DNA), Intel (INTC), Johnson & Johnson (JNJ): "Like tremendously."
Lucent (LU): The balance sheet is getting better, which is why the stock is up. "I think it goes higher."
Red Hat (RHAT): Sell. "Haven't liked it since the CFO left."
Consolidated Edison (ED): "Darn good" company, but prefers KeySpan (KSE).
Exxon Mobil (XOM): "Not my favorite" oil company, but very well run.
Alleghany (Y): Very well run.
3M (MMM): "Not my favorite conglomerate" since the company lost its CEO to Boeing (BA). Would prefer Textron (TXT).
Going UpscaleFinally, Cramer said he would swap out of Applebee's (APPB) into Ruth's Chris Steak House (RUTH). Applebee's, which reported poor comparable sales last night, said it is suffering from high gasoline prices. Cramer doesn't buy it. He believes Applebee's is suffering because it doesn't have the right business model for this environment. "The menu is the problem," Cramer said. Ruth's Chris, on the other hand, is a high-end dining play. Cramer believes it has the right recipe for success, with plenty of opportunity for growth. Downscale restaurant and retail plays are hurting, but "the high end of the economy is still booming," Cramer said.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV