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Stock-picking is like fishing, Jim Cramer told viewers of his "Mad Money" TV show Monday night. While "even some great fisherman have some get away," Cramer was determined not to let
Guess? "has the best high-end jeans," Cramer said, and its hyper-sexualized advertisements are "bringing teens to stores in droves." Guess? shares have hit a 52-week high, and the stock is up 109% since its October 2005 low. Cramer added that, while he may have missed the teen retailer the first time around, he believes it's destined for another move up.
Most analysts aren't bullish enough, leaving the company virtually ignored, Cramer said. Guess? is an "aspirational brand," in that it is a step up from
( AEOS) or
"When they want to feel rich, the kids go to Guess?," Cramer said. "The Guess? brand was popular 15 years ago, but it's still standing with fresh merchandise."
Cramer also noted that retailers that do well in back-to-school season generally are popular during the holiday sales season too. "I think Guess? has so much potential, it could double its store count in America," he added.
Guess? should deliver strong margins because its brand is selling, leaving no need for discounts. "Comp stores were up 11.3% and inventories were comparably low. Guess? had a great September, which should be good through the end of the year," Cramer noted.
Cramer warned that "there will be volatility," but noted that a "short growth spurt on an expensive stock could help the bottom line." Cramer expects the retailer to meet or beat its same-store sales going forward.
The first caller of the show asked about
, which is down 8% for the year due to several downgrades. Cramer said he doesn't "regard it as cheap," but added that he's "not enthusiastic about the price."
In response to a second caller, Cramer said he's not backing away from
, but said that
was still a strong performer.
"We need a new way to play the military industrial complex," Cramer said, noting that the Army now has "a blank check to buy whatever it wants," and it could be good news for investors.
Cramer pointed to the soon-to-be-public
Science Applications International Corp.
, which he believes could be the next big contractor and even one of the best of breed. The company, which will trade under the symbol SAI, generates about 89% of its revenue from the government, ensuring it will be "a sizzling IPO," Cramer said.
SAI will be the lead systems integrator for the Army's future combat system, Cramer said. It also has a big contract for information technology services for NASA, which puts it in the same category as the top-tier contractors like
Cramer said to use the growth rate to determine the multiple the stock should get. "I believe SAI should go to $20, even though the IPO has been delayed twice," Cramer said, adding that the delays "should not be a cause for concern."
In response to a call regarding
, Cramer said that the stock could go to $85 over the next six months. Meanwhile,
is "a problematic one. This has been a company I cannot get behind," Cramer added.
The Build in Auto Parts
There's a rotten sector, and for Cramer, it's the U.S. auto industry. However, there are some great value plays in the auto-parts industry.
( DPHIQ) and
( DCNAQ), both in bankruptcy, were trading furiously last week, which sometimes indicates genuine value. Both are on the Pink Sheets and are just too risky to own, Cramer warned.
Cramer added that "it's dangerous to buy a stock off the Pink Sheets. It's near suicidal to buy a company in bankruptcy. I would steer you as far away as possible from both companies." Some autos look attractive, but sometimes you have to resist the temptation, he added.
Someone out there believes there's value left, and people are flocking to the slowing auto industry, Cramer noted. In addition, energy prices and raw materials are decreasing, and private equity firms are swooping in to take over these companies. When private equities come in to take over companies, there's usually some upside in the stock price, he said.
Instead of trading on the Pink Sheets, there are other auto-parts companies that are more solvent, Cramer said.
is a "great value play with a 4.4% yield. It's looking like a lot of value there."
, which makes safety restraints, is "really starting to take off in Korea and China before the American business collapses."
may also be worth it, but Cramer isn't sold completely on the idea yet.
Mad Mail & Sudden Death
In the "Mad Mail" segment, when Cramer was asked how shareholders should interpret
( NHWK) filing with the
to sell 5 million shares, he replied "this is not good."
Another emailer asked if the short squeeze in
was over. "The shorts have lost here so big you're not going to get a squeeze beyond that," Cramer said.
A third emailer, who noted that on a past "Mad Money" TV broadcast, Cramer had blessed
( ATHR) as a takeover target, asked if it was time to ring the register. Cramer responded that the stock just had another spike, and "you should take something off the table."
In the "Sudden Death" round, Cramer was bullish on
. He was bearish on
Cramer was bullish on
Enbridge Energy Partners
Cramer was bearish on
MEMC Electronic Materials
For more of Cramer's insights during the most recent Lightning Round,
Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by
At the time of publication, Cramer had no positions in stocks mentioned.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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