Cramer's 'Mad Money' Recap: All Aboard AT&T (Final)
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NEW YORK (
) -- Jim Cramer started out his "Mad Money" TV show Tuesday by telling viewers it's "all aboard for
AT&T
(T) - Get Report
." He said the next stop is $30 a share.
To help make this call, Cramer said he turned to his "Off The Charts" technicians, asking them to find a stock with the perfect chart for this market rally. He said the unanimous answer was AT&T. Cramer agreed, saying the chart of AT&T is a masterpiece in the making.
Ever since October, the stock of AT&T has been "building a base," said Cramer, technician-speak for "treading water." The stock was repeatedly hitting resistance at its 40-week moving average, with bargain hunters swooping in on every pullback.
That pattern changed in July. He said AT&T rallied and broke through its 40-week average, turning the once resistance level into a support level the stock now will not fall below.
|
What's changed at AT&T? Cramer said investors have finally realized that the mobile Internet is a big enough phenomenon to move the needle, even at a big company like AT&T. He said with its 6% dividend yield, AT&T has become the safe way for those risk adverse to play the coming mobile Internet tsunami.
Cramer said unlike
Verizon
(VZ) - Get Report
, which only owns half of Verizon Wireless, AT&T owns 100% of its mobile operations, which now accounts for 43% of the company's revenue. Thanks to
Apple
's
(AAPL) - Get Report
iPhone, AT&T is seeing accelerating subscriber growth and revenue for every new subscriber it acquires.
Tack on growth from AT&T's popular U-verse TV service and its dividend yield, and Cramer said the company is just beginning its rise to $30 a share.
Weathering the Recession
In an interview, Cramer spoke with Pennsylvania Gov. Ed Rendell about the state of the U.S. economy and a host of other issues.
Rendell said he remains one of the few who are upbeat about the health of the U.S. economy. He said the country needs a boost in confidence to see that it has a bright future and could be one of the leaders in energy production, among other areas.
When asked about the debate raging in Washington between clean coal versus natural gas as the fuel of the future, Rendell said the country shouldn't have to choose between the fuels, both of which are plentiful in his state. He said while both fuels have their merits, he wishes that President Obama would endorse natural gas as a bridge fuel.
Turning to the economic stimulus, Rendell said that the stimulus plan has done a lot more than people give it credit for. He said the only fault in the plan was that it didn't include enough money for infrastructure, which would've directly helped the two hardest hit industries, construction and manufacturing.
Finally, when asked how Pennsylvania has been weathering the downturn, Rendell said that his state has consistently been below the national average in unemployment because of its diversified economy that not only relies on manufacturing and natural resources, technology, education, life sciences, and green energy.
IPO to Watch
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In his "Know Your IPO" segment, Cramer highlighted A123Systems, a company that makes lithium-ion batteries for hybrid cars. He said the company, which is set to trade under the ticker "AONE," has one of the best IPO pedigrees an investor could hope for.
Cramer said while he's not a fan of battery power, while still relies on dirty coal to provide electricity, A123Systems has a lot of Washington firepower behind it. The company just received a $249 million grant to build a battery factory in Michigan.
Couple that with other grants and loans from the Department of Energy and the State of Michigan, and Cramer said A123 has received $619 million in aid thus far. The company plans to provide batteries for 200,000 cars a year in the next two years.
Cramer said this company also has an impressive investor base, including companies like
General Electric
(GE) - Get Report
,
Qualcomm
(QCOM) - Get Report
, a stock which Cramer owns for his charitable trust,
Action Alerts PLUS,
American Electric
(AES) - Get Report
and
Motorola
( MOT). The company also have real customers, including
Black & Decker
( BDK) for consumer batteries, General Motors for autos, and American Electric for its large electric grid batteries.
Cramer said he'd only be a buyer of the stock on the IPO, and not in the aftermarket. Even at the offering price, Cramer said he'd still invest on a scale depending on the price.
For example, he would recommending buying at $13 a share for 500 shares, $15 a share for 300 shares, and $19 or higher for 100 shares.
Secondary Offering, Please
In his "Eureka Moment" segment, Cramer offered some advice for the management of
AIG
(AIG) - Get Report
. He said the company needs to go out Wednesday morning and do a secondary offering of 20 million shares to take advantage of what he called "a narrow window of opportunity."
Cramer said AIG's share price has been on the move recently, based purely on the gossip that something good might happen at the company. He said this has afforded the company a once-in-a-lifetime opportunity to raise much needed cash in an effort to save itself from having to sell off valuable divisions later on.
According to Cramer, AIG management needs to keep their mouths shut regarding the health of the company, which is not nearly as rosy as they make it appear to be. He said management should instead focus on fixing things themselves rather than relying on taxpayer dollars.
Lightning Round
Cramer was bullish on
Toronto-Dominion Bank
(TD) - Get Report
,
Allos Therapeutics
( ALTH),
Alcoa
(AA) - Get Report
,
Tellabs
( TLAB),
Alaska Communications Systems
(ALSK) - Get Report
and
Citigroup
(C) - Get Report
.
To watch replays of Cramer's video segments, visit the Mad Moneypage on CNBC
.
Want more Cramer? Check out Jim's rules and commandments forinvesting from his latest book by
clicking here.
For more of Cramer's insights during the Lightning Round, clickhere
.
At the time of publication, Cramer was long Qualcomm.
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