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Trade talks at the World Trade Organization are at an impasse over agriculture and farm subsidies, said Jim Cramer, and that is good news for
Deere & Co.
he said Wednesday on his "Mad Money" TV show.
The U.S., Japan and Europe all have massive farm subsidies, he said, and Cramer believes that those aren't going away. Although farm subsidies "make no economic sense whatsoever," rather than complain about it, Cramer wants to profit from it.
That means buying Deere, which should sell more tractors as money flows to U.S. farmers, he said. Deere is "best of breed," said Cramer, when it comes profiting from farm subsidies.
Cramer said that Deere is selling at a "ridiculously low multiple to earnings" and that the stock is about where it was before it reported earnings last quarter.
The stock had sold off prior to its earnings report over concerns about a shortfall. But, the quarter turned out terrific, said Cramer.
The market hasn't yet priced in the impact of the farm subsidies, he said, and below $70, Deere is "still cheap." Deere also recently sold its HMO unit to
, a "smart move," said Cramer.
'Mon Back Monsanto
Cramer is bullish on
because of its new Vistive brand soybean oil, made from soybeans that, when processed, contains "no harmful fats" such as trans fats or saturated fats, he said.
Vistive oil should help reduce or eliminate the need for unhealthy hydrogenated oils in snack foods, said Cramer. With obesity and overweight Americans causing a "national health crisis," this should be huge for Monsanto's earnings, he said.
Monsanto estimates that 5 million acres of soybeans will have to be planted to keep up with demand. That's up from 1 million acres planted annually now.
Yet, "not a soul on Wall Street seems to have noticed," said Cramer. Cramer would do a 'mon back.* This should be a whole new source of growth for Monsanto and should lead to multiple expansion, he said.
In response to a question about other health-conscious stock plays, Cramer said he likes
, but it is "not blow away." He also likes
Whole Foods Market
Cheaper by the Dozen
is done raising rates, industrials...will be the best-performing group of stocks out there," said Cramer. That means the time to buy the industrials is now when the Fed tightening is almost done, he said.
Cramer is putting together his "Dirty Dozen" list of stocks, "twelve heavy industry, smoke-stack stocks that could make you money," he said. His first two are
Both companies hosted analyst meetings recently where they outlined "really favorable growth," said Cramer. But, "nobody even focused on it."
Bear Stearns also upgraded Crane Wednesday. But, "that's just the first upgrade," he said.
Cramer believes that there will be perhaps just one more rate increase. But, don't wait for the rate increases to end. You won't make the mad money, he said. "Do the 'mon back now," and get in ahead of Wall Street.
Mitch Caplan, CEO of
, joined Cramer by telephone.
"What a quarter," said Cramer. "You just clocked the numbers!"
Cramer asked what is driving E*Trade's performance. "Why is it so explosive?"
Caplan said individual investors are coming back to the market. But, E*Trade's cash deposit and lending businesses are also driving growth. The company is seeing "engagement with our customers across all these revenue points," he said.
Cramer asked Caplan about the future of professional trading.
Caplan said he believes that companies like Fidelity will eventually offer free trading to professionals in exchange for holding their assets. It is a low-margin business, he said, that is not core to E*Trade.
Cramer asked how the integration of BrownCo and Harrisdirect were going.
Caplan said E*Trade had only experienced a 1% attrition rate with Harrisdirect and "almost nothing" with BrownCo.
"That's fabulous," said Cramer.
Finally, Cramer asked if Caplan sees more consolidation for his industry.
Caplan said looking at financial services broadly, "I think there's a lot more to come."
Cramer summed up the interview saying "This guy took a company that I thought was going to go flat line and has turned it into a juggernaut. He is a great executive. E*Trade is two thumbs up. Way up."
Cramer was bullish on
Birch Mountain Resources
Sirius Satellite Radio
Ruth's Chris Steak House
Medco Health Solutions
Marvell Technology Group
Cramer was bearish on
*For all you home-gamers, a 'mon-back opportunity means Cramer would back up the figurative truck and load up on a stock.
At the time of publication, Cramer was long UnitedHealth Group, Cendant, Qualcomm and Halliburton.
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