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You should get your hands on shares of
, because it's a spinoff that makes sense, Jim Cramer told his "Mad Money" TV viewers Wednesday.
( SLE) decision to spin off Hanes was a smart one because "a food company and a clothing company do not belong under the same roof," Cramer said.
Looking at historical evidence, Cramer noted that in 2001, Sara Lee had an 81% stake in
, but then dumped it because those business lines "didn't fall under the same roof either."
Since then, Coach has risen nearly 900%, said Cramer, and Hanes,
which got spun off last month, could see the same results now that it's "free from the shackles of Sara Lee." Of course, Cramer noted, there are some temporary drawbacks, but most are not that serious. For instance, Sara Lee forced Hanes to take down a lot of debt during the spinoff.
So will the move be a delight or a debacle? The bottom line, Cramer said, is that spinoffs "tend to make you money. I would be a buyer of Hanes below $23."
In response to a caller, Cramer said that
( UARM) benefits from having advertising related solely to sports. The advertisements play to the working man, Cramer said, "because they want to be like the guys in the NFL, too. I think UARM goes higher."
When answering a question about whether or not to believe the management at
Jos. A Bank Clothiers
that the current inventory problem is short term, Cramer asked, "Doesn't that worry you that management says everything is fine?"
"My take is that this is a classic stay-away story," Cramer added. "Why do we have to go to uncharted waters when so many other stores are bulletproof?"
Bread Recipe That Yields 74
Cramer wants you to make some dough with
, but first you have to determine what's true about the company.
Panera's shares have touched both $46 and $64, but Cramer believes both prices are wrong. The real Panera is the Panera of tomorrow.
Cramer said that on July 26, Panera made the "cardinal sin of widening their range of earnings estimates." They reduced the low end by 2 cents, and there was "such a sickening decline from $59 to $46, you would've thought it was a train wreck."
In addition, Panera said that same-store sales were light for one month but would rebound. According to Cramer, Panera "did precisely what it was supposed to do," the company "told the truth when it had a bad month of same-store sales. People got too negative, and you got a break when Panera dipped to $46." Cramer made the comparison to a similar situation that happened with
Panera "should never have been as low as $46," said Cramer, and now that comp sales have rebounded, the stock should hit $74, where Panera peaked before the market abandoned it. "That's where I think it's headed."
Cramer recommended putting half of a position in now and then waiting until after the company reports earnings before putting in the other half. "I think it should make or beat its numbers," said Cramer.
A caller asked Cramer which company he preferred out of
Pepsi Bottling Group
( PBG) and
. Cramer said that after the bell Wednesday, "Yum!
reported a good number, and it's two thumbs up for me."
Another caller asked if there are indicators to tell whether a company is telling the truth and will make it through reported shortfalls, similar to the cases of Starbucks and Panera. "If the growth forecast is still being reiterated, you have the chance to get in cheap," said Cramer.
Am I Diversified?
In the "Am I Diversified?" segment, in which Cramer examines portfolios for their diversification, the first caller offered a portfolio that consisted of:
- MasterCard (MA) - Get Mastercard Incorporated Class A Report
- Google (GOOG) - Get Alphabet Inc. Class C Report
- Omega Health Care (OHI) - Get Omega Healthcare Investors, Inc. Report
- Consolidated Edison (ED) - Get Consolidated Edison, Inc. Report and
- Alaska Communications Systems Group (ALSK) - Get Alaska Communications Systems Group, Inc. Report.
Cramer blessed the portfolio, saying that while normally both Consolidated Edison and Alaska Communications would be considered utility stocks, the latter should be considered a growth stock.
The segment's second caller had a portfolio made up of:
- AT&T (T) - Get AT&T Inc. Report
- Altria (MO) - Get Altria Group Inc Report
- Nucor (NUE) - Get Nucor Corporation Report
- Verizon (VZ) - Get Verizon Communications Inc. Report and
- Dow Chemical (DOW) - Get Dow, Inc. Report.
The combination of AT&T and Verizon prevents the portfolio from being diversified, Cramer said. "I like AT&T more than any other utilities," Cramer said, adding that he'd ring the register on Verizon and instead add
Johnson & Johnson
Knocking on Housing's Door
Cramer welcomed Bob Toll, chairman and CEO of
, back to "Mad Money" via a telephone interview. When asked if the housing market has bottomed, Toll replied that "there's no way for me to tell. There isn't an inflection point. We've been bumping along without getting worse."
"I don't understand the concept of ratcheting back," Toll said in response to a question about housing inventories piling up. "If you don't sell the goods, you don't make them."
When Cramer asked if options are coming back to haunt Toll Brothers, Toll said that options are "a useful tool and also necessary in our business. When you've bought ground in our business and you finally analyze it in today's market, not using options is foolish."
Cramer added that the housing business "has bottomed. You know you cannot wait until the all-clear bell has sounded. I am blessing
and, to a lesser extent, Toll Brothers, and
. I don't want you backing away from it."
To view Cramer's interview with Bob Toll, please click here.
In the "Sudden Death" portion of the program, Cramer was bullish on
. He was bearish on
Cramer was bullish on
Cramer was bearish on
Alliance Data Systems
Matsushita Electric Industrial
For more of Cramer's insights during the most recent Lightning Round,
Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by
At the time of publication, Cramer was long Altria, Johnson & Johnson, Sears Holdings, Schering-Plough and Yahoo!.
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