This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cramer's 'Mad Money' Recap: Promising Signs (Final)

Stocks in this article: MU AKS SWN DUK IVAN FLR

Real Dogs

"Most losers stay losers," Cramer told viewers, as he examined the dogs of the S&P 500 for 2010. Just because a stock has come down, said Cramer, doesn't make it cheap. While may big losers eventually snap back, bad companies are not worth owning at any price.

When Cramer last looked at the dogs of the S&P back in July, the results were incredibly positive. Cramer identified Nvidia (NVDA), Jabil Circuit (JBL) and Verizon (VZ), three stocks that are up 55%, 44% and 42% respectively.

But this year's dog are a different story, said Cramer. They include Dean Foods (DF), H&R Block (HRB), Apollo Group (APOL), Diamond Offshore (DO), Supervalu (SVU), Western Digital (WDC) and Pulte Homes (PHM).

With each of these stocks declining between 24% and 55% over the past year, Cramer said investors may be tempted to buy into these stocks.

But secular trends are working against each and every one, said Cramer, from Dean Foods, which is fighting overcapacity, to Diamond Offshore, which has the wrong type of drilling rigs, to Supervalu, which is struggling with its Albertson's acquisition.

Cramer said in the oil patch, stocks like Schlumberger (SLB), or Action Alerts PLUS name Weatherford (WFT), would be better plays. Investors looking for housing exposure need to consider Bank of America, said Cramer.

Of all of the dogs he examined, Cramer said he wouldn't be a buyer of any of them.

A Second Look

Some dogs can be winners, said Cramer, as he uncovered three stocks that are worth a second look.

Coming in third was memory chip maker Micron (MU), a stock that was down 24% last year.

Cramer said this company is rapidly moving from old school DRAM memory into the hot new flash memory that goes into tablets and other mobile devices. He said at eight times earnings, Micron is a speculative way to play the continued growth of Apple (AAPL), an Action Alerts PLUS bellwether.

Coming in second, steel maker AK Steel (AKS), who saw its shares slide 23% in 2010. Cramer said AK Steel is a cyclical play, and with aluminum and steel being late in the recovery cycle, AK may be in the sweet spot for 2011. He also liked AK for the possibility of a takeover.

And the winner of Cramer's dogs of the S&P 500 contest is Southwestern Energy (SWN), a provider of natural gas that was down 22% in 2010.

Cramer said Southwestern got crushed by falling natural gas prices, but with prices now stabilizing, Southwestern should recover. While the stock was down for 2010, the company has delivered a 2,600% gain over the past decade. "Don't count this one out," said Cramer.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs