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Brazil's banks should offer solace to investors who are turned off by America's weak consumers, Jim Cramer told viewers of his "Mad Money" TV show on Tuesday.
Calling Brazil's growing economy "investor nirvana," Cramer pointed out that Latin America provides an important market to American companies that are suffering at home.
can both attribute today's earnings success to Latin American exposure, Cramer said.
Brazil is particularly good for investors because its consumers are growing richer. The
also has a role in a Brazil play. Lower interest rates are great for Brazil's banks, because "credit cards and mortgages are a recent discovery" for the country," Cramer said. Lower interest rates in America mean the Brazilian market will open up as well.
Additionally, global money managers want to buy banks, but takeover targets are scarce. Brazil offers two possible candidates:
Banco Bradesco is the best way to play the Brazilian utopia, Cramer said. BBD has five advantages over ITU.
First, BBD is the larger of the two banks. Second, it has fewer bad loans as a percentage of total loans. Third, BBD is the market leader in asset management insurance and pension plans. Fourth, BBD has 20% of its ATMs and branches in the wealthier northern half of Brazil compared to ITU's 6%.
And finally, BBD trades at 14 times earnings, whereas ITU trades at 16 times earnings. If BBD's price-over-earnings ratio were to rise to match ITU, the share price would rise from $32 to $40.
Banco Bradesco handily beats Banco Itau as a play on Brazil's emerging market, Cramer said.
Corning a Value Play
An upcoming FCC ruling on cable companies' relationships with building developers and owners should benefit
, Cramer said. Additionally, the company has innovated bendable optical fiber, a development that should significantly reduce the cost of installing cable networks in apartments and apartment buildings, Cramer said.
Furthermore, Corning has issued a conservative forecast in a recent earnings report. Cramer believes that means the company is playing the underpromise, overdeliver game. Compared with other companies in its sector, the company is tremendously undervalued, Cramer said. Investors looking to make a play on LCD companies and fiber optics should take a look at this company.
Cramer said investor Kirk Kerkorian's recent interest in
could help lift the stocks of other refiners, such as
. Of the three, he prefers Marathon.
Cramer was bullish on
Annaly Capital Management
Perry Ellis International
Research In Motion
Cramer was bearish on
J2 Global Communications
E-House (China) Holdings
Procter & Gamble
During the Sudden Death round, Cramer was bullish on
Research In Motion
He was bearish on
( PALM) and
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