Jim Cramer's 'Stop Trading!': Buy Freeport

The copper and gold miner will benefit from Chinese demand for commodities, he said.
By TheStreet.com Staff ,

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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