Jim Cramer fills his blog on
every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This shortened week, he blogged on
the oil service sector
oil's new level
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Dealing Ahead of the Democrats
Originally published on 2/20/2007 at 7:55 a.m.
Here we go again. The firms couldn't even wait until Tuesday.
put its huge market cap to work -- what a stock this has been -- to buy
( FRK), making Vulcan truly a national powerhouse for aggregates.
And we got the long-doubted-but-simply-had-to-occur-to-stay-alive
Once again, I am struck by how much money is being made in this period.
Florida Rock was another one of these stocks that no one cared about until Tuesday: 17% grower -- road infrastructure has been a great business -- at 14 times earnings. It's just too attractive for Vulcan to pass up.
Plus, you have to admit that it was a no-brainer in the end for XM and Sirius to get together, although by the time they did, they had lost so much money that the combo may not go as high as it would have a year ago when Sirius first took the lead over XM.
I think these deals are being motivated by the coming of the Democrats. I believe that in the next year, we will see a wave of anticompetitive deals like these -- and both of these are viciously anticompetitive and anticonsumer (taxes go up because the raised price of aggregate) -- all because the Democrats would never let them happen.
You cannot let the bears, with their subprime harangues, drive you out of this market. It is just too good. There are too many ways to win.
Yes, I am an unqualified bull. But think about it like this: You are already well on your way to a record year for 2007.
I think it could happen.
( SHPGY) could wait! Until
At the time of publication, Cramer had no positions in any of the stocks mentioned.
Oil Service Gets Poised to Ramp
Originally published on 2/21/2007 at 2:21 p.m.
Iran's running out of oil, or at least the oil that's easy to find. So's Iraq. India has oil that it wants to explore, but needs the rigs. So does Vietnam. Off the coast of Africa there's a lot of oil, but it won't be available to drill for a couple of years. That's not soon enough to meet the demands of a China or an India or, course, the totally profligate U.S.
And we believe that the oil cycle is over? We believe that the rigs won't be used and the day rates won't go higher? Does anyone see a giant rig build out there? Is it possible that the jack-up rigs will be in too much supply?
I don't care. This group has the potential to be a multi-year group. I don't see any sign of rates going anywhere but up, except in Canada, where the problem is structural -- the government wrecked that business, and the Gulf, where there just isn't enough oil or the incentives to go for it.
No matter. The Street hates the group. It believes in farming, not drilling. It likes the new "oil service" companies --
-- not the old ones.
Let me make an analogy for you.
is a terrible company that keeps missing numbers. And it keeps going to 52-week highs.
is a fabulous company that keeps beating numbers.
Transocean can't get out of its own way. Agco, what a ramp.
Oh, and need I even mention
This group is on show-me status. It is a cyclical group that is poised to follow the likes of a
People just don't know it yet.
So take advantage of the fact that the easy oil's been found, the demand is high and the rates are generating so much cash it's incredible.
A great place to be.
At the time of publication, Cramer was long Transocean and Halliburton.
Expect Deal Rumors From Europe Next
Originally published on 2/22/2007 at 9:03 a.m.
Another big day in Europe, driven by some remarkable earnings.
( BF) are all on the move.
Think about it; that means you have two financial service companies, a food company, a defense company and a chemical company, all with big capitalizations, all on the prowl.
Could one of our investment banks or insurers be stolen by Allianz or Axa? I don't see why not.
How about the food companies, like
, that's struggling with a lack of respect? How about
( KFT)? They all seem natural for a hookup with Nestle.
lacks a partner; how about BAE? And there are so many chemical companies in the need of consolidation, I have to believe that BASF might want one; don't forget that the
unit is for sale.
All of these earnings reports are happening in
. It is no trick that these European reports tend to be better than the ones U.S. companies deliver. They benefit from better yield curves, a better tone of business, a better business climate and better sales to central Europe and other places we still don't have our teeth into the way we should.
Look for rumors involving all of these companies because they, too, fear the antitrust, pro-consumer agenda of the Democrats. No wonder those markets are, once again, beating the performance of our own markets.
When you see this kind of outperformance in Europe, you should think
, because that's who is going to capture the lion's share of what is looking like a pro-corporate revolution on the Continent. ... When you're assessing the promise in these stocks, remember to use all the tools at your disposal, including
TheStreet.com Ratings Screener. Because
bad buys won't become takeovers.
General Electric owns CNBC, for which Cramer is a featured commentator. At the time of publication, Cramer was long NYSE Group.
Oil's New Level
Originally published on 2/23/2007 at 8:02 a.m.
There's a lot of yawning about oil hitting the highest price of the year. That's wrong.
There was a tremendous amount of press when oil took out $60 and headed to the low $50s. Now it looks like that occurred strictly because of unseasonably warm weather,
because of a cessation of demand.
I am an out-and-out oil bull for the long term, and I blame that view on doing too much work! That's right -- because of the two stocks I have in
Action Alerts Plus.com that are oil-related and because I would like to boost that number, I listen to the calls, and they are all about an inability to find any new oil of consequence coupled with a voracious worldwide demand that hasn't been quelled by the so-called alternatives.
To me, this $60 level is becoming the norm. If that is the case, you will see a lot more drilling and a lot higher dayrates as it dawns on a lot of companies and nations that even if they have to pay $500,000 dayrates for big rigs, it might very well be worth it.
I also think that those companies that were hoping to make their EPS bottom lines on energy savings are gravely mistaken. It is a testament that the airlines are actually well-run that they aren't tanking right now, but I would want to ring any profits I had -- I agree with Doug Kass on
, by the way -- just to be sure that I wasn't surprised by a quick spurt to $63-$64, well within the realm of possibilities. In the meantime, many of the integrateds have once again come down to prices that are just too attractive to avoid.
Oil's done going down big. This is the new level. Get used to it. Adjust portfolios to fit it. Go buy some
At the time of publication, Cramer was long Halliburton.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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