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NEW YORK (
is a "buy, buy, buy," on the heels of its $17 billion equity offering to finally repay its government TARP loan, Jim Cramer told the viewers of his "Mad Money" TV show Monday.
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After months of countless equity offerings to both raise capital and pay back their bailout loans, Cramer said investors are right to be sick of the financial stocks. But now that the group has finally hit bottom, Cramer said that only Citigroup and
have offerings left to complete. Once completed, Cramer said owning Citigroup will be an investment in the return to global economic normalcy.
Why own Citi over Wells Fargo? Cramer said that Citi has less mortgage exposure, fewer foreclosures, a larger overseas presence, and the stock has already seen a huge decline ahead of the secondary offering. He said the government's ownership of the stock is non-issue given Citi's daily liquidity.
Cramer maintained his $12 price target on Citigroup by 2012. He said while the stock will not rise overnight, the company will have stronger earnings as the company and the global economy return to normal.
Wall of Fame
Cramer unveiled his new "Wall of Fame" list of the very best CEOs around when he added Bob Simpson, CEO of
, as the list's inaugural member.
Cramer said that Simpson has led XTO to astonishing profits over the years, with the stock up 148% over the last five years and a mind-boggling 3,319% over the last decade. He said of the many natural gas stocks that he likes, XTO has remained at the top of the heap.
Cramer said XTOs acquisition by
is a fitting end to Simpson's career, as the oil giant has finally acknowledged the importance of natural gas as a bridge fuel to the future. Cramer said it's clear that Exxon is betting on natural gas in a big way, and is likely to begin rolling out the fuel at its service stations.
Cramer once again touted the many benefits of natural gas, including its role in providing energy independence, being eco-friendly and burning 50% cleaner than other carbon fuels. Using more natural gas creates jobs, he said, something the country needs more than anything else.
Cramer said he still likes all of the natural gas stocks, and once again gave the nod to speculative name
Clean Energy Fuels
, which is up 44% since he last recommended it on Aug 11.
Changing the Equation
"Sometimes a stock can be too hated on Wall Street," Cramer told viewers, as he turned positive on a stock that he, too, has hated for quite some time. Cramer said that
, which is now trading just two points of its 52-week low, is just too cheap to dislike any longer.
Cramer said the thesis on Wall Street has been that Electronic Arts just can't be bought on the expectation of weaker-than-expected game sales. But Cramer noted that the company's $400 million of "Playfish," an advertising supported social gaming company, changes the equation for Electronic Arts, as it embraces the future of gaming.
Using the acquisition, Electronic Arts can free itself from depending on expensive game console sales, and focus on Playfish's 60 million casual gaming users. Combined with a workforce reduction of 1,500 employees and other cost-cutting measures, Cramer said Electronic Arts is just too cheap, given it has $6 a share in cash on its balance sheet and trades at just 9.8 times its earnings.
Cramer cautioned that there is no catalyst at Electronic Arts, and he would not rush out to buy the shares but he noted the cost cutting and advertising sales eventually will matter, and when it does, the stock will head higher. In the meantime, Cramer said "do not pay up for this stock."
Too High a Bar
In the "Executive Decision" segment, Cramer spoke with Tom Joyce, chairman and CEO of
, to find out why Cramer's Sept. 16 recommendation of the stock went wrong. Shares of Knight Capital are down 35% from that recommendation.
Joyce explained that after a few good quarters in a row, the analysts covering his company simply got ahead of themselves. He said the "whisper" number on Wall Street for what his company could earn were just too good to achieve. Joyce described his quarterly results as "pretty good," and said that he now feels the pendulum has swung too far to the negative side.
At issue was the amount of low volume trading, something Joyce called a double-edged sword. He said while low price stocks accounted for 24% of the company's trading, the low-price nature of that business eroded margins. Joyce said that Knight Capital is looking towards the future and making investments in that future, with five to six new initiatives in the works.
When asked about Congress' interest in the company regarding regulatory reforms, Joyce said its natural for them to look into improving computerized trading, as that platform hits its five-year anniversary. He said that tweaks to the system do need to be made, but noted that it's never been a better time to be a retail investor, with price spreads tighter and trading faster than its ever been before.
Cramer was bullish on
Bank of New York Mellon
New York Community Bancorp
He was bearish on
-- Written by Scott Rutt in Washington D.C.
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At the time of publication, Cramer had no positions in stocks mentioned.
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