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NEW YORK (
) -- Forget about price earnings multiples, some stocks just can do no wrong, Jim Cramer told viewers of his
TV show Tuesday.
For a select few "anointed" companies, all that matters is the market's momentum, he said.
One of those chosen few seems to be
Chipotle Mexican Grill
, a stock that despite a parade of downgrades and the headwinds of falling housing, weak employment and sky high gas prices, continues to power ever higher.
What's driving stocks like Chipotle, and others like
? Cramer said it's pure market mechanics.
Fund managers love growth, said Cramer, and will pay just about anything for it. And as their funds become successful and attract more capital, they return to the names that have worked well in the past, sending them ever higher.
Cramer said investors need to respect these trends, and sometimes hold their noses as they dive into what seems like unrealistic earnings multiples.
Cramer said as long as Chipotle doesn't screw up, and continues to deliver higher and higher earnings, its stock will be rewarded. He said money funds are happy to overpay for momentum, which is why the big picture economic problems seem to have no effect on these anointed few.
Ultra-Low Cost Producer
In the "Executive Decision" segment, Cramer spoke with John Pinkerton, chairman and CEO of
, an ultra-low cost producer of natural gas whose shares have risen 33% since Cramer last featured the company on Nov 18.
Pinkerton said that Range Resources, a stock which is at its 52-week high, is in a commodity business and that means the lowest-cost guys ultimately win. Range is able to produce natural gas at an incredibly low $1 per 1,000 cubic feet of gas produced. Range Resources was also early to the Marcellus shale region in southwestern Pennsylvania, snapping up acreage for a low $800 per acre on average.
When asked the inevitable question of why Washington doesn't embrace U.S. produced natural gas, Pinkerton explained that it's hard to come up with a 50-year energy plan when officials are elected every four years. He said the U.S. hasn't had an energy policy for 60 years.
"We need a portfolio of red, white and blue BTUs," Pinkerton continued, noting that the U.S. burns more corn for ethanol than Mexico, the world's fifth largest corn producer, produces in an entire year.
Pinkerton also dismissed the critics who claim that fracturing rocks to get at natural gas deposits is harmful to the environment. He said there has been no study linking the technique to environmental damage.
Cramer continued his recommendation of Range Resources.
In the "Off The Charts" segment, Cramer went head to head with his colleagues over the chart of
to determine if there is indeed a light at the end of the tunnel for the banking sector.
According to the technicals, JPMorgan's weekly chart shows entrenched resistance at the $48.10 level, but backing out to the monthly chart, a clear reverse head-and-shoulders pattern emerges, signaling that the stock could be poised to a big move higher. How big? The charts indicate it could be a full 36 points higher over the coming months.
Cramer said he agrees with the analysis, but for different reasons. He said there's a lot of good news coming down the pike for the banks. Just like big tobacco in the 1990s, Cramer said it will take a definitive agreement with Washington regulators to get the banks out of the mud, and that agreement could be happening soon.
Combine that with the inevitable dividend raises and rising earnings as a result of an improving economy and Cramer said the bottom may indeed be near for the banking group.
Intriguing Gold Play
In a second "Executive Decision" segment, Cramer spoke with Rick Van Neiuwenhuyse, CEO of
, an Action Alerts PLUS stock that's down 5% since Cramer last spoke with Van Neiuwenhuyse in January.
Van Neiuwenhuyse explained that gold comes in all sorts of different grades and qualities, but NovaGold's two projects appear to have at least 40 million ounces of gold in reserve, and there's still a lot of exploration upside to be done. He said both projects are in North America, making them immune to the geopolitical risks seen elsewhere in the world.
When asked about the size and cost of these large projects, Van Neiuwenhuyse admitted that gold mining is a capital intensive business, but noted that on a cost-per-ounce basis, NovaGold's projects are right in line with the industry, adding that "gold deposits are pretty rare."
Also working in NovaGold's favor are other metals, such as copper and silver, both of which also appear in NovaGold's growing portfolio of assets. Van Neiuwenhuyse said NovaGold expects another feasibility study to be released in the second quarter, followed by another in October.
Cramer urged investors to do their homework on NovaGold. He called the company the most intriguing gold story in the world right now, and one that could see big long-term rewards.
Cramer was bullish on
Public Service Enterprise
Federal Realty Investment Trust
He was bearish on
General Growth Properties
Nike vs. Phillips-Van Heusen
In his "No Huddle Offense" segment, Cramer reflected on the contrast between
, which delivered abysmal results, and
, an apparel maker that blew away the numbers.
Cramer said its clear that Van Heusen had the smarts and the brands to overcome rising commodity costs. He said the company raised prices where it could and make smart changes to manufacturing where it couldn't, all in an effort to combat inflation.
Meanwhile Nike seems oblivious to the challenges, and largely did nothing to preserve its margins.
Cramer said all apparel makers will now have to be assessed through the Van Heusen prism to see if the companies have what it takes to deliver great results, even in challenging times.
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long NovaGold Resources.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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