Jim Cramer's 'Stop Trading!': Buy Freeport
Buy Freeport-McMoRan (FCX) - Get Report, Jim Cramer said on CNBC's "Stop Trading!" segment Wednesday.
"American companies benefit" from demand for commodities in China, Cramer said. Executives at companies like
CSX
(CSX) - Get Report
,
Peabody
(BTU) - Get Report
and
Arch Coal
(ACI) - Get Report
have been telling Cramer that if customers don't use their products in the U.S., there is demand overseas, he said.
Cramer praised Freeport-McMoRan for its acquisition of Phelps Dodge last year. "That was the greatest acquisition that we've seen in years," he said. He also praised
Vale's
(RIO) - Get Report
acquisition activity.
He said short-sellers have fallen on their swords in this space. Freeport is not a U.S. housing play, and neither is
Caterpillar
(CAT) - Get Report
, he said.
The U.S. market is "just not that important," to commodities demand, Cramer said. He also observed that consolidation in the industry has led to substantial earnings improvement.
Cramer then moved on to discuss property and casualty insurers. "We all knew that
Ambac
( ABK) was not so hot," Cramer said. He pointed out the difference between "real insurance, where you insure real things," and "faux insurance, which is the CDO insurance." Cramer said he thinks
Safeco
(SAF) - Get Report
and
Chubb
(CB) - Get Report
are great plays in the sector.
The Street has missed out on the insurance game, Cramer said. "There were 12 holds and four sells on Safeco. Thank you, Wall Street," he quipped. On the other hand, "I'm not that high on
MBIA
(MBI) - Get Report
. I don't feel that good about
MGIC
(MTG) - Get Report
. ... I like
Met
(MET) - Get Report
. I like
Pru
(PRU) - Get Report
," he said. He was also bearish on
AIG
(AIG) - Get Report
and expressed concern over legal problems at
Allstate
(ALL) - Get Report
.
At the time of publication, Cramer was long Freeport-McMoRan.
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