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NEW YORK (
) --"Do not be shocked by the lousy housing numbers," Jim Cramer told the viewers of his "Mad Money" TV show Wednesday, as he declared the numbers a victory for the bulls.
He said no one should have been shocked by the disappointing home sales. The real story, he said, is how so many economists got their estimates so wrong.
Cramer said that he's been preaching for weeks that with the recovery losing steam thanks to Europe, and the expiration of the federal tax credit on new homes, housing would see a disappointing quarter. He said it makes total sense that prospective home buyers would buy last quarter, to qualify for the credit, and not this quarter, when there was no credit.
Yet so many economists were predicting unrealistically high home sales, said Cramer, and thus were "surprised" by today's news.
Cramer said what surprised him was that home prices were still rising, despite the large overhang of unsold inventory, and that the actual level of inventory is only 213,000 homes, a level not seen since the 1970s. For both of these reasons, Cramer said he's still bullish on housing, and the prospect of a housing shortage in 2012 when growth will outstrip supply.
With the markets having hammered housing related stocks, Cramer said that companies like
( FO) and even home builder
are much more attractive than they've been. "You want to be in them," he said, before everyone else is.
In the "Know Your IPO" segment, Cramer looked at the best, and worst, IPO of 2009 to offer up some suggestions for the upcoming reintroduction of General Motors later this year. He said how the IPO is structured will make all the difference for this much anticipated IPO.
Cramer said the best IPO for 2009 was
, the country's largest term life insurance provider. Primerica shares opened up 27% when it came public, and is up 48% today.
Cramer said Primerica performed well because the deal was priced correctly. He said instead of pricing shares equal to that of Primerica's peers, the deal was priced lower, giving the stock room to run.
, on the other hand, was the worst performing IPO. Mitel was priced at $14 a share, below its expected range of $18 to $20 a share, and opened down 14% on its opening day. Shares of Mitel are now down 37% from its IPO.
Cramer said this disaster could have been avoided had the Mitel deal been priced correctly. He said even at $14 a share, Mitel was still priced on par with its peers, despite having no track record as a public company. He said this deal was clearly designed not to make investors money.
So for GM, Cramer said pricing the deal correctly will be crucial because it is using the proceeds from the deal to rapidly pay down its debt. He said the IPO's success also teeters on how the company manages its legacy owners stake, mainly the United Auto Workers union.
In order to be successful, Cramer said GM must focus on the strength of its management team, and layout a clear strategy for paying down its debts and managing its large stakeholders. If it can do that, and price the deal attractively, the IPO of GM will be a success, said Cramer.
Canadian Telco Play
"Telcos are a great place to look for high yields, but in this market you also need growth," Cramer told viewers. That's why he sidestepped recommending either
, two companies struggling with legacy wireline businesses, in favor of
, one of Canada's big three telcos.
Cramer said Telus has a 5% dividend yield, with genuine growth to boot. With wireless penetration in Canada at only 68%, but expected to reach 90% by 2015, there's lots of room to expand, he said.
Telus is the second largest telco provider in Canada, with a 28% share in wireless. The company added 51,000 net new subscribers in its most recent quarter, with smart phone customers up 15% from a year ago. Cramer said while the average revenue per subscriber dipped slightly, the decline was not as bad as 2009, and revenue from data was up 17%.
Cramer said unlike AT&T or Verizon, Telus is spending less on its infrastructure, with its 3G wireless network already complete. The company is also already able to offer the consumer a triple play package of phone, Internet and TV service to much of its wireline subscriber base.
Telus was also able to raise its dividend by 5% last quarter and hinted at more hikes to come, all of which makes it a winner in Cramer's quest for high-yielding stocks with great growth.
Am I Diversified?
Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included:
Cramer said Marvell and Apple are both tech companies and he'd keep Apple and sell Marvell. He also recommended selling BP, which he feels will be going bankrupt.
The second caller's top holdings included
Bank of America
Cramer said this portfolio was diversified as natural gas and coal companies are not the same.
The third caller had
Kinder Morgan Energy Partners
as their top five stocks.
Cramer said Kinder Morgan and Linn Energy are two of a kind and one has to go in order to be diversified.
Cramer was bullish on
He was bearish on
Cramer told viewers not to be surprised if
, a stock, which he owns for his charitable trust,
Action Alerts PLUS, trades lower on the iPhone 4 introduction tomorrow. He said the stock has a history of this behavior, but it doesn't reflex on the company's performance.
-- Written by Scott Rutt in Washington D.C.
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At the time of publication, Cramer was long Apple, Intel, Bank of America.
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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