This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Cramer's 'Mad Money' Recap: Debunking the Double-Dip Talk (Final)

Berkshire Faceoff

In the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the chart of Berkshire Hathaway (BRK.B), a company that can sometimes be difficult to value given its many diverse moving parts.

According to Collins, any technical metric that relies on volume is now worthless when it comes to Berkshire, as the company was recently added to both the Russell 1000 and S&P500 indices.

Instead, Collins said the stock had resisted its 13-day moving average until June when it broke out to the upside. Since then, Berkshire's stock has been displaying a bullish ascending trianlge pattern.

Turning to the weekly chart, Collins noted a stair-step pattern where the stock trades sideways before breakout out to the upside. He said based on the technicals of this pattern, he'd wait for a pullback to $75 before pulling the trigger.

But Cramer disagreed, saying he'd be a buyer, based on the fundamentals. Cramer said Berkshire is the cheapest it's ever been compared to the assets it holds.

In addition, Cramer said Warren Buffet has a solid management team in place at all of his businesses.

Finally, Cramer said he likes Berkshire because the company has the right portfolio of companies for a recovery, including exposure to railroads, housing, insurance and banking through its stake in Wells Fargo (WFC).

Comeback Trail

Continuing with his "Biggest Loser" series of broken stocks that represent great value, Cramer highlighted both Nvidia (NVDA), down 40% on the year, and Jabil Circuit (JBL), down 15% on the year.

Cramer said both of these companies remind him of ADC Telecom (ADCT), a company that was part of his mobile Internet tsunami index on Aug. 11, and is now up 81% after receiving a takeover bid.

Cramer said things seemed very bullish on June 16 when he interviewed Nvidia's CEO. The company has $3 a share in cash and trades at a paltry eight times its 2011 earnings estimates. Nvidia has a host of new products on the market, and is getting more efficient at production, thereby increasing its margins.

Cramer also gave the nod to Jabil Circuit, a company which delivered a 7-cent a share earnings beat when it last reported. "Jabil is a strong sales story," said Cramer, with the company expecting revenues from its consumer business to increase by 25% next quarter.

Shares of Jabil have been trading lower on slowdown fears in Europe, said Cramer, but with management confirming that its seeing no ill effects from Europe, those fears are overblown, especially since the company now trades at just seven times earnings.

In both cases, Cramer said these are broken stocks, not broken companies, and they should rebound in the second half of the year.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AGNC $21.50 0.00%
AMT $95.19 0.00%
CRM $67.84 0.00%
EBIX $28.94 0.00%
EXC $33.37 0.00%

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs