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 week, he blogged on:
- Sansa's lack of punch;
- hot natural gas;
- Lundin's rich growth;
- Citi's prince; and
- how Jones Soda still has fizz.
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Sansa Lacks Knockout Punch
Originally published on 4/9/2007 at 6:49 a.m.
next to fall on its music sword with this new device, the Sansa Connect. The downloading of music wirelessly, something that
does too, will make a splash as still one more tech company tries to overthrow
. It will have similar results to all the other challengers. Why?
The morning paper gives you the best reason why. Check out this one for irony. On the front page of
The Wall Street Journal's
B section, the headline is simple: "A New Wireless Player Hopes to Challenge iPod."
That's all well and good. Yahoo!'s got a big installed base.
, its partner, has some clout.
But then turn to the back page. You will see something that tells you about the success, or lack thereof, of this new venture: A heart made up of iPods and two lines: "100 million iPods sold. Thanks to music lovers everywhere."
It's called "installed base." It tells you all you need to know about where Yahoo! stands. Which is nowhere.
No matter what people say or do, no matter how well funded the challenger, that installed base is what propels Apple away from all competitors. Plus, the ease of use of iTunes makes the wireless option a moot point. People don't, in a vacuum, download songs. They don't walk down the street and download songs. They like to listen to the snippet on iTunes, browse other songs and then buy something. I am confident that if wireless were a really big deal Apple would just put in a wireless chip and call everyone even. The iPhone probably will make all of this stuff happen if Apple chooses.
No one ever writes about the installed base in any of the myriad articles about the competitors of Apple. It's almost as if they are just rewriting the press releases of the entry.
It's hard to understand why they do that, some underdog predilection I guess.
Still, it's part of an overall sloppiness that they don't. I can recall the endless positive pieces about the Zune but you could tell quickly from online services that it was not a factor. I bet in a couple of weeks the same will be said about this new entry.
One hundred million iPods is an invested class. It won't switch easily, if at all. This is not a situation like a new phone line where you already have an installed base of both cable and hardline. That's different and can be successful in overturning the incumbent. In fact, it proves the point there is Yahoo! incumbency. Just some Web site not doing as well as it used to with some flash drive company not gaining much traction. It won't matter. Apple has won the space already.
We are seeing the same kinds of stories about
and how it's not doing well with YouTube because of the lawsuits. The lawsuits will cause a headache but the technology wins. Intellectual capital has lost its capital. Go ask the newspapers and the music companies.
At the time of publication, Cramer was long Yahoo!.
Natural Gas Flame Is Rekindled
Originally published on 4/10/2007 at 10:05 a.m.
When will the drilling for natural gas pick up again? Natural gas has been persistently high for some time. The creep up in the group makes it clear that things are getting better.
Take a look at the gains in
ramping, only in part because of takeover chatter. Truly impressive.
are up nicely from their preannouncements.
I think there's something big afoot here. I believe that natural gas, which has been the weakest component of energy, is on the definitive mend.
I would stop selling Nabors and, if you haven't bought any, a step-up of Halliburton buying. The latter is still 50% levered to natural gas, although that's going down. It's killed the company.
I bet we have seen the bottom in the lack of interest and lack of drilling for natural gas.
Time to buy.
Doing some cool video with James Altucher this a.m. You might want to check it out later. These have been very compelling videos, according to the feedback I'm getting.
At the time of publication, Cramer was long Halliburton.
Tap Lundin's Rich Growth Vein Early
Originally published on 4/11/2007 at 10:08 a.m.
Another chance to buy
acquisition of Tenke, on top of the last one this company just made for
, shows me that Lundin is trying to be the next
, with far-flung enterprises and lots of niche metals that China will need and everyone else is struggling to find.
Lundin is the
of basic minerals, the midrange growth play that can acquire or be acquired. After decades of consolidation in the minerals business, there aren't a lot of players left. Those that are left are being bought by
or Rio Tinto or now, Lundin.
But of those, the one that lacks in-depth U.S. analyst coverage is Lundin. It's followed only, on a major-house basis, by
I know Lundin's acquisition pace seems too fast, but that's exactly the course that Yamana followed when it was at $7. It has since doubled. Lundin is going to be the big story for minerals next year when these deals all get sorted out.
Better to get in now. Every day I come in and hear about how BHP and CVRD and
Soon it will be how Lundin is doing. This will remain a very big stock, and the more liquidity, the better.
I can't believe how slowly that
has trickled into the marketplace. Eddie Lampert's creating more than a billion dollars in worth from his brands and is going to put them back into the shares. This is going to be a small-cap company by share count when he is done! Still not too late to buy the best-performing retailer. ... Once again, people are asking me if the
layoffs are enough to change my mind about how the company's doing. I am saying, "They laid off 17,000 people. Now they just need one more layoff, right at the top!"
At the time of publication, Cramer was long Sears Holdings.
Dreading a Prince of a Year From Citi
Originally published on 4/12/2007 at 12:58 p.m.
Chicanery in the executive office. Most poorly performing major bank stock. A strategy of overpaying overseas and firing people domestically. A reputation for being
best ally, because he's so bad. A caretaker put in to appease Eliot Spitzer, who is now in Albany with bigger fish to fry.
These are the traits that should have led to the firing of Chuck Prince from
by now. There's some dispute about whether the potential firing would come from Prince Alwaleed, who has 4% of the shares.
That's the wrong call. If Chuck Prince is to go -- and his departure is integral to any rally that can ever occur, as we have seen from the lackluster response to the so-called big restructuring/head-count reduction -- the board will have to take action.
That means we have to look at the board members. Do they have what it takes to make the right move? Not clear. Some people certainly would be intolerant of such poor performance, but others might be willing to take no action by virtue of their own intransigence or lack of sophistication about the way Wall Street works.
First, the good news. I can't imagine board member Kenneth Derr, a man who built
into a tremendous oil powerhouse, being endlessly patient. Bob Rubin, who may have had a hand in Prince's appointment, could have a problem reversing his own thinking, yet I think that he's too rigorous to let this poor performance go on endlessly.
And then there's George David, a man simply intolerant of anything less than 110% and who was acutely aware of the value he created at
. He could be the real catalyst for change.
But then there's the bad, starting with the notoriously underperforming, actually embarrassing exec Michael Armstrong. Dreadful. This man drove
into the ground. I think he would tolerate any amount of underperformance. He might not even care.
Or how about Alain Belda, the head of one of the worst stocks in the
Dow Jones Industrial Average
. Belda's just been terrible, the company's been terrible, and no one cares. What does that sound like to you?
Andrew Liveris from
fired a couple of guys for trying to bring out some value. I don't like insubordination, but Leveris has consistently stood in front of any attempts to bring out the largely unlocked value of Dow. Not a man who is going to throw over another exec who has stood in the way of creating value.
Anne Mulcahy has done a competent job at
. The stock has just started to move after a lot of stagnation. I think she has her hands full herself with that job.
I am a fan of Dick Parsons from
, but I don't know if he wants to lead the big charge against Prince. He's weathered the big charge against him by Carl Icahn; I can't imagine he wants to put anyone through that kind of hell. I put him in the "we're fine, don't sweat the program" camp.
A few wild cards: Klaus Kleinfeld, head of
; Dudley Mecum, managing director of Capricorn Holdings; and Roberto Hernandez Ramirez, Banco Nacional de Mexico (Banamex). Don't know where they come out. Don't know if they have clout in the boardroom.
The rest? I look at them as professional board members/do-gooders. People like John Deutch, a professor and former CIA director; Ann Jordan, someone with an excellent social services background; Judith Rodin, the former head of Penn and president of the Rockefeller Foundation -- these aren't exactly positions that lead to the kind of bare-knuckle behavior it might take to unseat an incumbent. And don't forget Franklin A. Thomas, who has a fabulous record of community and charity work but who may not be ready for board intrigue.
I am stopping short of saying "sinecure" for these last four board members. But given their lack of banking or Wall Street experience, I can't imagine them voting for anyone but the incumbent who has no doubt captured them.
Which, of course, leads me to the worst board member of all for corporate change, the Chairman and Chief Executive Officer Charles Prince himself.
This board will have to look to Bob Rubin for insight into the actual day-to-day of the company. He holds the key. If he is talking to his friends on the Street at other firms, including his alma mater at Goldman Sachs, then he would know the truth: Prince is the best friend of all other firms, and the chief reason someone like Lloyd Blankfein keeps triumphing: Prince isn't a banker. Doesn't know how to do it. He's a placeholder lawyer who's no longer needed.
The bottom line? This board's not likely to take action until it sees the results of this restructuring. If it fails, then Rubin can start the campaign. But Rubin's a fair man. It will be at least the end of the year before a judgment can be rendered.
Three more quarters of Prince, coming right up.
Coal up again! Someone must be getting ready to acquire
, that's my thinking. ... Rails, coal derivatives, not quitting.
remains my fave. ...
wins court suit, goes higher. ...
changes deck chairs as iceberg threatens engine room. ... Dow rally says where there was smoke, there was fire all along. ... Biotech rally happening, with
leading, but not
. I guess people just wanted DNA out of the way to start buying. ... I like that
upgrade very much by Bernstein. ...
getting big benefit of the doubt.
deserves the same. I would buy
is up. ... I look for
to creep up to the strike by next week. I would buy the April 55 calls for 33 cents. ...
another coal/nuke play that won't quit, but I like
, too. ... I think Goldman's done marking time and is ready to roll. ...
still hasn't announced that bond deal. When it does, I think $200 is attainable. ... Speaking of penitence, enough with the selling of
remains my best go-to tech name. ...
is back in the groove.
At the time of publication, Cramer was long Goldman Sachs, Union Pacific, Sears Holdings and NYSE Euronext.
Jones Soda Still Has Fizz
Originally published on 4/13/2007 at 9:35 a.m.
won't quit. Why should it? One of the big knocks against the company is that carbonation, as a category, is awful and no company in the category can buck it.
But this week we have analysts talking about how carbonated beverages could be getting some life.
If that's the case, you could have Jones going up off the category growth or from the possibility that the larger soda companies want to bulk up and add more product lines (don't forget private equity and Cott are talking about buying
beverages. This group is hot.).
All of this works because Jones has just gone with the business model -- sell the syrup nationally in unusual venues rather than bottle for
only -- and the margins could explode.
This is a stock that will remain in the news positively until it becomes a billion-dollar company too big to acquire.
That's not for another $350 million. On a $650 million basis, that's not bad.
Jones has, like
, gone beyond fad, but so few want to jump off here. Don't make the mistake that so often is made with many stocks that are in breakout status: The big move is still happening.
At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
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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