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 TrailContinuing 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.
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