Cramer's 'Mad Money' Recap: America for Sale (Final)
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NEW YORK (
) -- "Everything is for sale in this country," Jim Cramer told the viewers of his
TV show Wednesday as he commented on the news that a German company is in advanced talks to gain a 60% stake in
NYSE Euronext
(NYX)
, one of the preeminent symbols of American capitalism.
Cramer said the news of the proposed merger, along with countless other foreign deals, tells him one thing and that's American stocks are too darn cheap. He said with the euro and other currencies on the rise as the dollar falls and U.S. budget deficits threatening Treasury bonds, taking over U.S. companies is the best investment foreign companies can make.
Deals like
Chesapeake Energy
's
(CHK) - Get Report
partnership with the chinese
CNOOC
(CEO) - Get Report
and the Dutch takeover of
Alberto-Culver
(ACV) - Get Report
will be commonplace now, said Cramer, adding that changes how other companies will have to be valued.
Cramer said companies down on their luck, companies like
Clorox
(CLX) - Get Report
and
Kimberly-Clark
(KMB) - Get Report
may no longer be on the sell list, as they're now attractive foreign takeover targets. A few years ago, deals like this never would've happened, said Cramer, but in today's climate, anything is possible. Foreign acquisitions, he said, will only get more visible from here.
Getting Traction
Cramer spoke with Bill Hankowsky, chairman, president and CEO of
Liberty Property Trust
(LRY)
, a real estate investment trust with a juicy 5.6% dividend yield.
Hankowsky said after a few rough years, Liberty is finally getting some traction and positive momentum. He said companies are finally starting to feel the worst is behind them, and now have the capacity and conviction to start making real estate decisions. Liberty is starting to see five-, seven- and 10- year lease commitments, instead of just one-year extensions.
When asked about the company's emphasis on industrial properties and shift away from suburban offices, Hankowsky said that Liberty has the flexibility to shift as the economy dictates. He said companies need the right buildings in the right places, and in the case of suburban offices, there may be too much space available while logistics and modern industrial facilities are taking center stage.
Finally, when asked about the company's dividend, Hankowsky said he's a believer in the REIT model, and while he was forced to cut the dividend when earnings were shrinking, the dividend will grow again with earnings. He said Liberty is has the capacity to fill vacant space, increase rents and buy new buildings, all of which will grow earnings.
Cramer said Liberty was a solid business that got through the tough time and is now poised for growth.
Boosting Oil Output
In a second "Executive Decision" segment, Cramer once again spoke with David Demshur, chairman, president and CEO of
Core Labs
(CLB) - Get Report
, a company Cramer characterized as a technology company in the oil space.
Demshur said 2010 was an outstanding year for Core Labs, and the company helped its customers find more oil and gas, and produce more oil and gas than ever before. He said while most oil fields produce 40% of their capacity naturally, Core Labs' technology can increase that output by 2% to 4%, with that extra percentage being the cheapest to produce.
When asked about where the opportunities are, Demshur said the oil shale fields in the U.S. are major projects that could house billions of barrels of crude and gas. Demshur also noted that the recent trend of foreign investment into U.S oil companies will accelerate drilling here at home, as increased capital is needed to fully develop our new oil possibilities.
In Iraq, Demshur said that Core Labs is working on 11 projects, six of them major, and is helping that country increase production from their current 2.5 million barrels a day. He said while Iraq's high of 3.6 million barrels a day may be out of reach, he's hopeful the country could again see 3 million barrels a day or more.
Demshur also reiterated Core Labs' shareholder friendly nature by saying the company will continue to reward shareholders through dividends, special dividends and stock buyback programs.
Cramer said that shares of Core Labs usually dip after they report earnings, and that dip would be a perfect time to buy in.
Moving to New Technologies
In a third interview, Cramer spoke with Murray Martin, chairman, president and CEO of
Pitney Bowes
(PBI) - Get Report
, a company that's diversifying itself away from slow growing mail operations and into new technologies, all while paying a 5.8% dividend yield.
Martin said Pitney Bowes is seeing continued strong cash flow from both its core mailing operations and its new Web-based products. He said physical mail volumes at the U.S. Postal Service rose last quarter for the first time since 2007, which led to positive margin growth for Pitney, which now derives 50% of its revenues from its enterprise operations.
When asked to drill down on the growth in the U.S. economy, Martin said Pitney is seeing most of the growth in mid- to larger-size businesses, with small businesses still flat to negative so far.
Finally, when asked about Pitney's new Web product, Volly.com, Martin explained that Volly is working to transition the physical mailbox into a digital one. He said billers of all sizes are anxious to get on the platform, and he expects consumers to be excited as well as the product continues to roll out.
Cramer said he's a believer in Pitney Bowes and thinks the stock is worth a second look.
Lightning Round
Cramer was bullish on
Whole Foods
( WFMI),
United Parcel Service
(UPS) - Get Report
,
NextEra Energy
(NEE) - Get Report
and
Fedex
(FDX) - Get Report
.
He was bearish on
Amarin
(AMRN) - Get Report
.
Wall Street's Heroes
In his "No Huddle Offense" segment, Cramer took a moment to celebrate the men he called heroes, the CEOs of companies who, even in the worst of economies, have been delivering results.
Cramer said
Disney
's
(DIS) - Get Report
Bob Iger,
McDonald's
(MCD) - Get Report
Jim Skinner,
Coca-Cola
's
(KO) - Get Report
Muhtar Kent and
3M
's
(MMM) - Get Report
George Buckley all deserve a shout-out for their remarkable performance in challenging times.
"We thank them for all they've done for our portfolios," said Cramer.
Closing Comments
Cramer reiterated his sell recommendation of
Cisco
(CSCO) - Get Report
on the heels of what he called "another disappointing quarter."
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was not long any stock mentioned.
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