RealMoney Radio Recap: Nuts for Nymex

Cramer says that the stock debuted at a price more than double of what was expected. Also, bubbles.
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The floor of the

NYSE

was in a "frenzy" this morning as the

Nymex

(NMX)

debuted at a price more than double of what it was expected to open at, Jim Cramer said on his

"RealMoney" radio show Friday.

At first, the Nymex was expected to open in the $50s, then expectations made their way up to the $100s, he said. And it opened at $138.

"If you're not in the game, you're never going to make these types of gains," Cramer said. "If you're in and winning or in a mutual fund, you know the reward can be great."

The Nymex is not "nuts" for opening up so high, he said. In fact, it could be a similar case to when the

New York Stock Exchange

(NYX)

opened very high and then made its way down and stayed down as it made its Euronext bid.

But Cramer doesn't believe that the Nymex will make an acquisition, so people should be free from that risk.

Moreover, anyone who tries to claim that the Nymex is like stocks from the dot-com period is misinformed, he said. The underwriters in the Nymex case knew that demand for the stock was a lot greater and want people to make money off of it.

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Cramer said if he wanted to buy 500 shares of Nymex, he would buy 125 shares now, and in a week he'd buy 125 more, regardless of whether it's trading up or down, compared with today.

Then if the stock was above, Cramer said he'd stop buying and be happy with his 250 shares. However, if the Nymex continued to decline, he would keep buying more shares every 10 points the stock went down.

"I believe that the Nymex is priced a little too expensive and, more importantly, the NYSE is priced too cheaply," Cramer said. "The NYSE is worth $250, but now it is at $95."

The Nymex may be 15 or 20 points too high, but not too much more, he said.

Home Depot

(HD) - Get Report

gave a "gigantic dividend boost" recently as a sign that business in the future will be better than its business in the past. But Cramer still does not believe this stock is worth owning.

As department stores get their act together and reinvent themselves, these businesses are "alive and well," he said.

Meanwhile, Home Depot has done the opposite. It has made its stores "less appetizing" by cutting back on "knowledgeable help" and bringing in part-timers and by making acquisitions that build up the homebuilding contractor business, Cramer said.

Although Home Depot might have bottomed, there is no reason to own this stock, he said. Six months from now it might move up, but Cramer said he'd rather see people in

Lowe's

(LOW) - Get Report

.

Bubbles Overblown

Although housing stocks have been "booming," the media's been reporting that people should not be buying these stocks, Cramer said.

But Cramer wonders if these reporters, who have kept people out of this "fabulous" rally, have even taken a look at these stocks. There may be lots of for-sale signs and "anecdotal evidence" that people have not been able to sell their houses, but this doesn't mean that the homebuilding stocks are bad, he said.

The media might also be bearish on this group because it believes that these stocks are overvalued compared with their fundamentals, Cramer continued.

On Thursday,

Sears

(SHLD)

, which he owns for his charitable trust,

Action Alerts PLUS, was considered as such, as was

Starbucks

(SBUX) - Get Report

. But this is not true, Cramer said.

In fact the homebuilders have bottomed because they were undervalued, he said. Although these stocks are not as undervalued anymore, Cramer said it's time to buy them.

With all the activity surrounding major companies and private-equity funds, people might believe there is something cooking in this area, he said. However, "the bubble in private equity isn't really a bubble yet."

Although there have been many deals, "a plethora of deals isn't a bubble," Cramer explained. "A plethora of deals at high interest rates is, and the rates at which these deals are occurring are so low that they most likely can work -- as the

Hertz

(HTZ) - Get Report

deal shows."

Moreover, "the fact that Hertz was able to pay a dividend to the firm that bought it and come public says it is way too early to fret," he added.

Cramer told listeners to first look at the performances of stocks with "OK fundamentals and underlevered balance sheets," and to worry about whether investors are in the wrong stocks when rates go high.

"Until then, if you miss out, you're leaving too much money on the table," he said.

Cramer's Callers

FedEx

(FDX) - Get Report

is an "up stock," Cramer told a caller.

He said he believes the stock, which is at $117, could go to $140.

Responding to another caller,

Toyota Motor

(TM) - Get Report

is "the winner in the world-class car division," Cramer said. "I would make a big bet on it, even at $122."

On the other hand, he told his next caller he is worried about

Bristol-Myers Squibb

(BMY) - Get Report

.

As a lot of Bristol-Myers' earnings came from its Plavix drug, Cramer believes that the stock might get hurt because there's a generic for Plavix available now.

Because Cramer believes the stock might go down, he suggested ringing the register on Bristol-Myers, adding that he doesn't trust the company's management and considers it "too dicey."

Cramer advised a listener not to buy more

Panera Bread

(PNRA)

until it accelerates its same-store sales, which is what the company "thrives on."

Sirius Satellite Radio

(SIRI) - Get Report

has a "great product," and "people who buy this service love it," he said.

In addition, Sirius has been beating its numbers, Cramer went on to say. But

XM Satellite Radio

(XMSR)

has also had a pretty good quarter, he added.

Cramer told the caller he believes Sirius is going to $6 over the next year. It was recently trading at $4.07.

At the time of publication, Cramer was long Sears Holdings.

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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