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After a decade of dormancy, Japan is back in business, Jim Cramer said Tuesday on his "Mad Money" TV show, a compilation of previously aired episodes. For those looking for growth, Cramer offered his seven samurai stocks, a list of names he put together several months ago, but still believes are poised for growth.
These stocks are the best of breed in Japan, but people still need to do their homework, Cramer advised. Some of these names are exporters and are sensitive to the yen's exchange rates.
Even if these stocks are not all worth buying right now, he said, they will be worth buying at some point.
The first of Cramer's seven samurai is
, which he owns for his
Action Alerts PLUS charitable trust and which he first offered as a samurai pick on his
Oct. 11 "Mad Money" show.
Cramer said there was one main reason for buying this company: history. Japan is positioned much like the U.S. was back in 1991: It's coming out of a terrible real estate depression in which the values plummeted and few major banks survived.
During this period, Cramer said he was shorting all the banks for a year in 1990, making money hand over fist as one after another blew up.
But when real estate bottomed in the U.S. during that period, it was time to buy banks, and one in particular:
, he said.
Mitsubishi looks a lot like Citibank did in 1991. This stock was in the single-digits until it broke out in August, and since then it has traveled all the way to $13. Mitsubishi is the best way to play it, he said.
Cramer warned his viewers to be careful as Japanese interest rates could hurt this stock, but said that over the long term, Mitsubishi is a compelling story.
The next name on Cramer's seven samurai list is
, a stock he first introduced on his
Oct. 12 show.
Although Cramer said he is a bear when it comes to American beer, he believes Kirin Brewery has a hot new product that will send the stock higher.
Kirin has developed a soybean-based beer that isn't subject to Japan's "malt tax," and the beer has turned out to be very popular, he said.
The beer was introduced to the market in April 2005 and, by August, sales had tripled, Cramer said. That success led Kirin to raise its malt-free beer guidance by 50%. Kirin also has soft drinks and a little gem of a biotech subsidiary, he said.
Even though another Japanese beer company,
, also has a soybean-based beer, Cramer said it cannot seem to keep up with Kirin.
Japan's parliament may be changing the malt-tax laws to include soybean-based beer, so Cramer urged his viewers to do their homework before investing in the stock.
The next pair of samurai Cramer mentioned is the auto business:
In their case, if the Yen softens up, people could make a lot of money, Cramer said. Cramer mentioned this pair on his
Oct. 27 show.
Back in October, Cramer said Honda reported an excellent quarter. Although both auto companies are doing very well, Cramer said he prefers Toyota, since it has a leg up on hybrids.
, said Cramer, Toyota and Honda are both profitable companies and are benefiting from the long-term trend of higher gasoline prices.
While Toyota and Honda are selling fuel-efficient cars, General Motors and Ford are competing to sell big pickup trucks. Toyota and Honda aren't just in a different league, "they're in an entire different ballgame," he said.
, an agricultural- and construction-equipment manufacturer, is Cramer's fifth samurai and one he introduced
back in December.
Kubota is a play on the weakness of the yen, since Japanese goods get cheaper in the U.S. as the value of the yen falls, Cramer said.
Cramer doesn't believe analysts have yet fully accounted for the weak yen in their earnings estimates, which means the analysts will either have to raise their estimates and upgrade the stock, or Kubota is likely to report an upside earnings surprise.
After completing a "huge restructuring," said Cramer, Kubota is now focused on its core businesses. Kubota dominates the agricultural-machinery market in Japan.
On the downside, Kubota may experience a tough market in the medium-sized tractor segment where there is a lot of competition, said Cramer. But it should be able to balance out any weakness with lower prices.
Another risk would be if the yen recovers, said Cramer, making Kubota's tractors more expensive in the U.S. But he doesn't see that happening, at least not anytime soon, he said.
Right now, Cramer advised his viewers to wait until the yen starts weakening again to buy this stock, otherwise, he said, American competitors like
would crush them.
Matsushita Electric Industrial
Another member of Cramer's seven samurai top picks in Japan is
Matsushita Electric Industrial
, a stock he introduced as a samurai pick
Japan is turning around. Big-screen plasma TVs are hot, and Matsushita is making itself into a flat-screen powerhouse, he said. In fact, Cramer said he'd rather own Matsushita at $22 than
He said that Matsushita intends to control 40% of the plasma market by 2010, and that means 10 million units.
The company is well-positioned to be the No. 1 player because it's upping its production capability faster than the competition, he said, pointing out that it's opening plants sooner than expected and plans to spend $1.57 billion on a plasma TV plant in western Japan.
That would give Matsushita the biggest plasma-TV production capacity in the world, Cramer said.
Although Matsushita could be dead money as long as tech is in the doldrums, it's still a great long-term story, he said.
Australia & New Zealand Banking Group
Cramer also revisited
Australia & New Zealand Banking Group
( ANZ), a play not off of Japan's economy but rather off of Vietnam's. He first introduced ANZ in a
applies with the government of Vietnam to build a semiconductor plant in Ho Chi Minh City, it's officially time to start investing in Vietnam, Cramer had said at the time.
The country's economy grew at 8% in 2005, but no one knows how to play the country because it's bottled up tight. That is until now. Cramer's done some homework and says the country is going capitalist.
"You don't get Intel begging to open up in communist countries," he said.
But it's in transition, and investing directly is too risky. The smart play is the banking system, since, Cramer said, everything in the country is financed by, and thus owned, by four banks.
So, he suggested buying Australia & New Zealand Banking Group, an Australian bank that owns 10% of a key Vietnamese bank. It is his sixth samurai play, he said.
ANZ is worth owning, Vietnam aside, he said.
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At the time of publication, Cramer was long Mitsubishi UFJ Financial Group.
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