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NEW YORK (
) -- "Good news hardly seems to matter any more in this market," Jim Cramer told the viewers of his "Mad Money" TV show Friday, as he laid out next week's game plan.
Cramer said the banks rallied today on the news that financial reforms have finally been agreed to by Congress. He said this news brings clarity to the banks, which is far more important than the bill itself.
Bank Of America
, three stocks which Cramer owns for his charitable trust,
Action Alerts PLUS, remain good bets, he said, along with
and even the regional player
, which has no exposure to the new reforms.
Cramer said he also continues to watch
, which he feels is headed towards bankruptcy as legal claims overwhelm its cash flow. BP affects the mood of the market, he said, and is worth watching, especially if a hurricane makes things worse or hampers the relief wells.
Cramer also highlighted a few key conference calls next week, including
Barnes & Noble
, which will shed light on the corporate PC market and the red hot eBook reader market.
On Tuesday, Cramer fav
reports, and Cramer said he's still a fan of the company, its CEO, and its 2.6% yield. On Thursday, Cramer said he'll be watching agriculture giant
, which has fallen 42% since Cramer put it in the Sell Block on Aug 13.
Finally, Cramer said he'll be watching the June unemployment data on Friday. After a downtick in May, everyone wants to know if hiring is on the rebound, he said.
Doublechecking Dividend Yields
"Not all high yielding dividends are secure," Cramer told viewers, as he explained how sometimes a super high dividend is actually a red flag, and not a reason to pile into a stock.
Cramer compared the dividends of
, two mortgage REITs that borrow money to buy mortgage bonds known as "agency paper."
Cramer explained that while Annaly offers a 5.6% yield, Hatteras had a 15% yield, despite both companies being in the same business. That's why he was not surprised when Annaly recent raised its dividend, while Hatteras this week announced a dividend cut.
Cramer said Annaly is simply the better player, investing in longer-term, fixed- rate loans, while Hatteras chose the riskier, shorter-term paper. Annaly also actively manages its portfolio, locking in profits for shareholders. He said this is a classic case of a high-dividend warning that things are too good to be true.
Cramer also commented on some other dividend stocks viewers have asked about. He said the Indonesian telco
has earnings twice that of its dividend payout, and he's now a fan of that stock. He said that
has earnings only 1.5 times that its payout, and that makes him less comfortable.
Finally, Cramer said that natural gas importer
has a worrisome dividend, and with the U.S. importing less and less natural gas, the company's business is worrisome as well.
iPhone Derivative Play
For "Speculation Friday," Cramer cracked open
new iPhone 4 to see what derivative stocks might be worth purchasing.
Cramer said simply, "if it supplies Apple, it's working," as he referenced both
, which is up 39% since he recommended it on May 10, and
, which is up 10% in just two weeks. Apple is a stock, which he owns for his charitable trust,
Action Alerts PLUS.
But Cramer honed in on
, the company that supplies image sensors for the cameras in both Apple's iPhone and the new HTC Evo, as well as for notebooks, security equipment and other small camera applications.
Cramer said that Omnivision derives 55% of its sales from mobile handsets, 30% from notebooks and PCs, and the remaining 15% from everything else, making the company a big player as smart phones go from luxuries to necessities all over the globe.
Omnivision last reported a one-cent-a-share earnings beat, on revenue that was up 74% year over year. The company raised guidance and saw sequential growth as well, as it shipped 125 million sensors last quarter. Also in the positive column, the company's gross margins are on the rise, as more and more phones and devices opt for higher quality cameras from Omnivision rather than cheaper alternatives.
Cramer said with the iPhone using not one, but two of Omnivision's cameras, and the company having $6.11 per share in cash on its books. He said the company, while speculative, is clearly a winner.
Cramer told a viewer that he doesn't think a bankruptcy in BP would have an effect on
Permian Basin Royalty Trust
but questioned the need to take that risk and advised selling it to be safe.
Cramer told another viewer that while he's a fan of
new Xbox game system technologies, the division is just too small to make a dent in the company's earnings, which is why he remains a fan of Apple, which has been highly successful on its product launches.
Cramer was bullish on
PNC Financial Services
He was bearish on
Research In Motion
American Capital Agency
-- Written by Scott Rutt in Washington D.C.
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At the time of publication, Cramer was long JPMorgan, Bank of America, Goldman Sachs, Apple.
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