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(Story updated to add Cramer's Lighting Round picks, his analysis of a stock that two analysts disagreed on, and his closing remarks on the poor timing of Apple's dividend.)
NEW YORK (
) -- Investors need to put this market into context.
Taken by itself, investors might be puzzled about the rise in U.S. stocks, said Jim Cramer on his
TV show Monday.
But he reminded viewers that money knows no borders, and every country has pension plans and wealthy individuals looking for places to invest their money. All of that money he said, has to go somewhere. But where?
China's stock market is still struggling, noted Cramer, as that country attempts to stave off a housing collapse. Meanwhile Russia remains the wild west of investing. India has terrible inflation, while Brazil is seeing a dramatic slowdown in growth. Investing in Europe remains dicey, said Cramer. And that only leaves America.
"America is the worst place to invest," said Cramer, "except for all those other countries." Even within the American markets, investors still have options, he said. Investors could choose bonds, but returns there remain stagnant. Investors could choose real estate, but the turn there may take years. Filtering out all other options, there only remains U.S. stocks, said Cramer.
Investors have a right to be skeptical of stocks too, admitted Cramer, after the financial meltdown, flash crash, Ponsi schemes, insider trading scandals and bankruptcies.
But at some point, stocks get so cheap that they're just too attractive to pass up. So with companies like
, a stock which Cramer owns for his charitable trust,
Action Alerts PLUS, rewarding shareholders with a newly-announced dividend, what's not to love?
And its not just Apple that's wooing investors.
announced a $3 per share special dividend and
Cliff's Natural Resources
increased its dividend by 123% last week. Even the struggling
, another Action Alerts PLUS name, boosted its dividend as well.
Cramer said when investors put the global economy into context, it's easy to see why so many investors are putting their money into great U.S. companies.
Read to Run
With such a terrific move happening in the banks stocks, Cramer said it's time to recommend even a worst-of-breed stock, like
, a stock that he said is a coiled spring, waiting to snap back into action.
Cramer explained that while SunTrust failed the
's stress tests last week, the only one of the banks tested to fail, the company also raised its earnings guidance that same day.
According to Cramer, the stress tests, which assumed a 13% unemployment rate, a 50% drop in the stock market and a 20% dip in housing prices, don't really matter, at the stock has already rallied 8.6% since the failing grade was announced.
What's most important at SunTrust, said Cramer, is that the company has the most earnings power of any regional bank.
After becoming a beloved regional bank throughout the Southeast, Cramer said SunTrust lost its way, expanding too rapidly into the about-to-be-hard-hit Florida market. The result was a stock that crashed and burned in spectacular fashion, he noted. But with the Florida economy on the mend, and SunTrust taking $300 million in costs off its books, Cramer said this is one bank that's ready to run.2008, he said the stock could achieve half of that level, which correlates to an
SunTrust currently trades at a tremendous discount to its peers, said Cramer, and while the stock isn't likely to repeat the $81 a share high it saw in 81% rise from current levels.
Tech's All About Innovation
"Technology is not about computers, it's about innovation," Cramer reminded viewers, as he recommended the latest of his non-tech technology companies,
. Cramer said Colgate is an innovation engine that's taking market share all over the world.
So what makes Colgate so special in a world where competition from cheaper, private label alternatives are all the rage? Cramer said it's Colgate's unique ability to rapidly take ideas from consumers and bring them to market as well as specifically targeting those ideas only to the regions of the world where they will have the most impact.
Even in an industry as mundane as toothpaste, Colgate remains a global leader, with 44.3% market share, thanks to dozens of new, whitening formulas. Colgate has also innovated in everything from healthier pet foods to dishwashing detergent that not only cleans dishes but also helps your sponges smell fresher.
Cramer said Colgate also remains a powerhouse internationally as well, with the company deriving 35% of its operating income from Latin America. Colgate dominates the toothpaste market in Mexico, for example, with an 80% marketshare. Part of Colgate's success rests in the fact that he company doesn't just target the big retailers, noted Cramer, but also smaller, mom-and-pop retailers.
While higher commodity costs are a concern for Colgate, Cramer said these fears are largely baked into its share price already. The company trades at just 16 times earnings, but he said it deserves a premium multiple, especially after the company recently boosted its dividend to 2.6%.
Sorting Out Analyst Disagreements
When analysts disagree, investors win, Cramer once again told viewers, as he dove into the recent analyst action surrounding
On March 9, an analyst at
raised its rating on Statoil from neutral to buy, while another analyst at
downgraded the company to sell.
Cramer said that after a "premature" downgrade last year, Deutsche Bank now feels that Statoil has a lot to look forward to in 2012, with production ramping up 6% to 7% this year and even more in 2013. The firm also liked that Statoil has less exposure to refining and marketing of oil, making is essentially a pure play on its exploration and production expertise.
The Goldman Sachs analyst, on the other hand, cited valuation for his sell recommendation, saying essentially that shares of Statoil have run too far, too fast. The analyst said he prefers others in the oil patch which now offer higher dividends.
So who's right? Cramer said in the analyst world, a firm simply cannot like every stock in a given sector, it must choose its favorites and its least favorite companies. That's precisely what happened at Goldman, he explained. That said, Cramer told viewers that he hates valuation calls and prefers recommendations made on catalysts and earnings, something Statoil is delivering on.
Cramer said Statoil has a proven track record of delivering on its production goals, and just because Goldman Sachs may have other favorites in the group, that's no reason not to own this terrific oil driller in a market where both firms expect the price of oil to continue to rise.
Cramer was bullish on
Kodiak Oil & Gas
Cramer was bearish on
In his closing remarks, Cramer admitted he was a little disappointed at Apple's dividend and stock buyback announcement earlier today. He said it wasn't because of the amount of the dividend, as there's always time to raise it in the future. Nor was it because of the buyback, a tactic he's not a fan of anyway.
Cramer said he was disappointed that Apple chose this weekend, the weekend of its latest iPad launch, to make the announcement. He said the dividend announcement stole the thunder from the iPad and Apple would have been better served to have waited for a down day in the markets to give its shares a shot in the arm.
"Apple buried the lead," said Cramer, as he's now more certain than ever that the company will beat his target of $50 per share of earnings.
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long Apple, JPMorgan Chase.
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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