Cramer's 'Mad Money' Recap: Brazil's Paper on a Roll
Click here for an archive of Cramer's "Mad Money" recaps.
There's Pulp Fiction the movie and pulp fact, the smart stock play, Jim Cramer said on Thursday's "Mad Money" TV show.
In a celebration of rain forest depletion and making some cold hard cash, Cramer said that there's a coming paper rally. Pulp inventories are low and as inventories tighten up, paper prices will have to come up.Where's the demand that will propel the cycle? "This sort of demand, it always comes from China," said Cramer, adding that the country is blowing through 41 million tons of paper a year. But he said International Paper (IP), the big American name, is not the smart play. "Don't go American ... go Brazilian. In Brazil they have that whole darn rainforest to chop down," Cramer said. That's why Brazil's No. 2 paper company, Votorantim Celulose (VCP), is his stock pick in the sector. The biggest Brazilian paper company is up 8% this year, while Votorantim Celulose is down because it posted disappointing earnings. But Cramer said the past is the past, and that this is a broken stock, not a broken company. Moreover, Brazil's economy is growing at a rate that makes the macro environment good for business. It's impossible to ignore the fact that there's anti-U.S. sentiment brewing in South America, so Cramer recommends looking at companies in Brazil and Chile. He said to steer clear of Peru and Argentina.
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