Cramer was looking for pin action in the oil patch after a slew of recent deals were announced. He said that Kinder Morgan Energy Partners (KMP) bid for El Paso (EP), Brigham Exploration (BEXP) acquisition by Statoil (STO) and Energy Transfer Partners (ETP) sale of its propane assets are all game changers.
Cramer said after delivering an 84% return since first recommending it in April, 2007, Kinder Morgan just got even better. He said the deal will create our country's largest pipeline company and give Kinder $350 million a year in cost savings. The deal also positions Kinder for the future and raises the company's growth rate from 5% to 7% a year. Cramer recommended MarkWest Energy (MWE) as a similar play.
Cramer said that if Statoil is willing to pay up for Brigham, then foreign oil companies will continue to recognize the value of American oil and shale companies. He said that Continental Resources (CLR) and EOG Resources (EOG) remain his favorites in this group.Finally, Cramer gave another ringing endorsement of Energy Transfer Partners, saying that the sale of its lagging propane assets will only help this best of breed company get even better.
On the ReboundAfter years of being range bound, Cramer said that retail giant Wal-Mart (WMT) is back and bigger than ever. At a company analyst day, Wal-Mart noted that after years of losing share to dollar stores, department stores and drugstores, the company finally has seen three consecutive months of positive same store sales and is on track to post its first quarterly same store sale growth in nine quarters. How has the company done it? Wal-Mart has seen a boost in consumer spending since gas prices started falling, but mainly its strength lies in providing a better assortment of products, as the company has reintroduced some 10,000 items it previously cut from its stores. Wal-Mart also touted a 90% on shelf-availability ratio, another positive for the company. Cramer said that Wal-Mart is also cutting costs and improving its already efficient operations. The company plans to spend $13 billion to $14 billion this year on capital expenditures. Wal-Mart is also ramping up new store openings and embracing its Internet strategy as well. Trading at just 10 times earnings with a 2.6% dividend yield, Cramer said that Wal-Mart is finally ready for its moment in the sun.
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