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With all of today's headlines circulating around
Bank Of America
, a stock which Cramer owns for his charitable trust,
Action Alerts PLUS, Jim Cramer told the viewers of his "Mad Money" TV show Thursday that only one matters.
And that's the one about today's upgrade of the stock by Morgan Stanley.
Cramer said everything surrounding CEO Ken Lewis and the acquisition of Merrill Lynch is water under the bridge, with no bearing on the stock's future performance.
The Morgan Stanley upgrade, however, means everything because it says the estimates for Bank Of America are too low, he said, adding Wall Street is starting to take notice as a result.
According to Cramer, BofA's business is improving rapidly, with interest rate margins between deposits and loans at record highs. In addition, he said the company's brokerage business is on fire, with strength from both retail and investment banking.
Given this strength, it will only be a matter of time before BofA will repay its TARP money and becoming an incredible earnings powerhouse, he said.
Sooner or later, he said, the bears will admit defeat and upgrade the company as Morgan Stanley did.
Cramer said given the strength in BofA's earnings, he sees shares surging to as high as $20 a share. "Focus on the numbers, not the hearings," he told viewers.
Reinventing the Business
Cramer spoke with Charles Bunch, CEO of
, a stock which Cramer owns for his charitable trust,
Action Alerts PLUS, and a company that's reinventing itself for a new global economy.
Bunch said the PPG has reduced the company's exposure to the automotive industry from over 33% of company sales in the 1990s, to less than 15% of overall sales today. It is also in the process of selling its automotive glass division so that it can focuse solely on its automotive coatings business going forward.
Brunch said PPG remains solidly profitable and is starting to see a recovery in China and elsewhere in the world. However, Brunch said he's most excited about PPG's optical business, which manufactures the "Transitions" brand of eyeglass lenses. He said it's now a $1 billion business for the company, and nearly 20% of all eyeglass lenses sold in the U.S. now include the Transitions coating.
Cramer said he's a buyer of PPG, given its incredible transformation, accidentally high dividend yield, and a beneficiary of falling natural gas prices. He said under $45 a share, PPG will make investors very happy.
In the Thursday "Sell Block" segment, Cramer compared the stocks of
to see which of these two T-shirt makers is worth hanging in your portfolio.
According to Cramer, while the products of the two companies may be indistinguishable, the companies themselves are far from it. Both companies are up almost 200% from their bottoms earlier this year, he said.
However, Gildan derives 75% of its sales from activeware, and unlike Hanes, Gildan sells its products as blanks, suitable for custom printing. With 25% of Gildan's sales comes from corporations, 20% from non-profits and another 20% from the education market, Cramer said Gildan has serious exposure to cutbacks in discretionary spending and a weak market overall for promotional products.
Unlike Hanes, Gildan also is vertically integrated, meaning it has high fixed costs. As sales decline, so does margins, which have already fallen from 17% to just 3% in its most recent quarter.
Cramer said it's time to sell Gildan. "The growth story is played out," he said.
Cramer agreed with a viewer and added Brenda Barnes, CEO of
( SLE) to his "Wall Of Shame" list of the worst CEOs.
According to Cramer, Barnes has tried and failed to turn that company around, and at a time when the stocks of competitors stocks are rising, the stock of Sara Lee continues to falter.
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At the time of publication, Cramer was long Bank of America, PPG Industries.
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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