has been "disappointing," Jim Cramer said on
TV's Wall Street Confidential video
Webcast Thursday morning.
While Cramer has previously been a "big supporter" of FedEx, he believes it's time to re-examine his thesis on the stock, he told Aaron Task, the host of Wall Street Confidential.
Cramer had said it was the "single best play on the Internet because it involves all of shopping." But this is not the case any more.
United Parcel Service
had a bad Christmas last year and FedEx didn't, Cramer believed FedEx was "immune." But "obviously no one's immune," he said.
He said he doesn't like FedEx's excuses, as they are usually a coverup for execution problems.
"We don't really know what went wrong here," Cramer said, "and I don't want to hear it's about fuel because fuel is down."
He advised people to sell FedEx and commented on how UPS might be making a comeback.
The bigger picture with FedEx, Task said, is that people are worried about nonconfirmation of the
transports, also known as Dow Theory. "Do you put any credence on Dow Theory?"
Cramer said he doesn't because he believes "that index doesn't serve its function any more."
He said he likes
as the best play for the rails, by far. While Cramer had liked
more before, he said Union Pacific has much more West Coast business.
should be "avoided at all costs" and said it's better to be in a rail stock than a trucking stock.
Task asked that with the downward revision of third-quarter GDP today, copper is below $3, and the housing market is weakened are signs that the economy is getting softer.
Cramer responded that this is not the case and people need to understand how inventory reductions occur. Taking
as an example, he said this company didn't believe there was a decline in housing until of the third quarter of 2005, so it continued building houses "aggressively" in the fourth quarter of '05 and the first quarter of '06
In the second quarter, Toll Brothers realized that it had too many homes, Cramer explained. Meanwhile copper was high and Toll Brothers was a "gigantic hoarder" of copper like all other homebuilders were, because they thought it was going to keep going higher, he said.
At the time, not only was inventory cost much higher because of raised short-term rates, but homebuilders were "sitting on piles of copper." Now, China is providing almost all the demand for copper, which is not enough to sustain it. Moreover, it's down to a level that won't entice new buyers because they're not building, Cramer said.
"You won't see a turn in copper until maybe the third quarter of 2007, when
homebuilders need to order more copper," he said.
For people looking to get into a copper play, Cramer suggested
, a non-U.S. based copper stock.
Switching the topic to pharmaceuticals, Cramer told Task that a lot of market players have been long
because stents are popular.
However, in the end, the only way to play this business is through an impure stent play like
Johnson & Johnson
, which he owns for his charitable trust,
Action Alerts PLUS, Cramer said.
People can't be reliant on stents because "it's not going to grow like it used to," he said. Cramer urged people to look at Johnson & Johnson as the "ultimate weak dollar play," not as a stents play.
, which he also owns for his charitable trust,
Action Alerts PLUS, is also a weak dollar play, he said.
Cramer recommended that people sell Boston Scientific as he believes "there's nothing to it," and hold Johnson & Johnson for the next six months as the "dollar weakness is going to keep bumping numbers."
The New York Times
article on how
has been said to play down the risks of its Zyprexa drug, Cramer said, "nobody is unaware that you gain weight when you take it."
, which he owns for his charitable trust,
Action Alerts PLUS, "is the "decider in this country of what drug works and which doesn't," he said.
Further, "the drug class is very powerful," Cramer said. The Indiana congressman in charge of the Medicare committee in Congress is "owned by Lilly" and he makes a special exception for Zyprexa, Cramer said.
"Unless you vote that guy out, Zyprexa is going to do well," Cramer said. "This is the way the American system works and we can change it or we can make money from it."
President Bush gave a speech about the war in Iraq and that troops are going to be there longer than expected, Task said. "Why does it seem like Wall Street doesn't care about what's going on in Iraq?"
Cramer said this is because the war doesn't affect the price-to-earnings ratio of any company other than
"We're in a casino," he said. "And the betting line is better on the defense stocks because the president doesn't have a clue."
At the time of publication, Cramer was long Altria, Johnson & Johnson and UnitedHealth.
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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