"Given all of
problems and the way they're going about fixing them ... I believe the stock will be at $40 next year," Jim Cramer told
"RealMoney" radio show listeners Wednesday.
Cramer said that GM should be able to reinvent itself from a large company that loses money into a small one that makes a ton of cash.
Cramer emphasized that he has been a long-time hater of the stock, despite the fact that it is one of the largest sponsors of his television show "Mad Money," which airs on
But now he believes that management is addressing the company's problems and taking action, so Cramer likes it here near $23.
However, he said, GM is a stock to buy for a trade, meaning that it could be held for about three months.
is still his favorite auto company, and Cramer added that it just reported a great quarter.
He recommended Toyota at $70, and now it's above $120. Toyota is the better investment, Cramer said, adding that it could still go up substantially over the next six months.
We like to apply the Goldilocks rule in business, Cramer said, referring to the notion that it's good when things are not too hot and not too cold. We especially like this when it comes to employee compensation, he said.
reported what looked like a great quarter, but Cramer said that when he drilled down, he was worried about the amount of options being issued to employees.
Sales were up 5% for routers and 13% for switches, but Cisco's compensation expenses were way too high, Cramer said, adding that these options prevented the company from rallying.
An argument could me made that all of the tech stocks have a problem with aggressive, excessive compensation to employees, Cramer said.
He said that there is one thing that
all have in common. They have problems with compensation and they all don't go up.
Cramer owns Microsoft for his
ActionAlerts PLUS charitable trust portfolio.
He said that compensation is a good reason to rethink one's tech exposure, adding that better "neighborhoods" to be in are minerals, oil, aerospace and infrastructure. They don't issue a lot of options and they're doing better, said Cramer.
Pools of Wealth
"A perfect storm scenario has been created to push gold prices higher," Cramer said.
Demand for gold is through the roof thanks to the fact that people in Iran, China and India are hoarding 24K gold, he said. "Individuals here don't trust their own currency," Cramer said, so they're hoarding 24K gold.
This is going on at the same time that we're running out of gold in the ground, he said.
And, finally, there is also a shortage of gold stocks in which to actually invest. While there used to be dozens of gold mining stocks to invest in, including companies in Canada, South Africa and the Americas, Cramer said that there are now only three investment-worthy mines:
These factors combined mean that the three stocks are constantly moving higher, Cramer said, adding that it's important to buy these stocks any time there is a pullback.
Goldcorp is the cheapest, he said, because it has the lowest finding costs.
He said that he used to own
ActionAlerts PLUS charitable trust, but that this is not a pure play on gold because it is also exposed to diamonds.
Cramer also said to be on the lookout for companies that are flying under the radar and that
will be a stock to watch. He owns Cephalon for
Cramer had sold some Cephalon, in part because the health care sector is getting hit by a rotation into precious metals and infrastructure, and in part because of news that the Food and Drug Administration rejected the company's breakthrough attention-deficit-disorder drug Sparlon.
Then company CEO Frank Baldino made an appearance on Cramer's "Mad Money" TV show
Tuesday evening. Baldino said that he believes that the drug will be approved in August -- news that Cramer said could have moved the stock had it not been off the radar.
(To view Cramer's interview with Baldino, click here.)
Sparlon drove the stock up 20 points before it was rejected by the FDA, Cramer said, and he believes that it will move the stock higher again.
He said not to take any action yet, but that he'll give the signal in July when it's time to buy Cephalon.
Cramer said that the market is not behaving as one might assume, given the fact that the country is facing high oil prices, problems in Iraq, tension in Iran and the fact that the president's approval rating is very low.
But the market is reaching six-year highs. Cramer said this is because, for the first time in history, three pools of wealth are looking for a place to put their money.
The first group is "petro-dollars," meaning the money that U.S. consumers spend at the gasoline pump that makes its way back to Mideast nations.
The second stream is private-equity companies, which refers to companies that search for stakes in private businesses and then take them public. He said the last pool comes from hedge funds looking for a place to put money to work.
There's lots of money out there and not enough stock to go around, Cramer said. And that is enough to drive the market higher despite all the bad news.
Listeners lit up the "RealMoney" radio show phone line Wednesday, with the first caller asking Cramer about
Cramer owns URS for his charitable trust
Action Alerts PLUS. He said that the stock is hitting a 52-week high and that the company mentioned two streams of business that look strong going forward.
URS, one of largest infrastructure plays around, said that its defense business is on fire, including lots of maintenance work that is available. The company has a smokestack-cleaning mercury scrubber; and it believes that this business also has the potential to be huge.
Cramer said he believes that the stock could go to $55 from its current level near $48.
reports earnings next week, and Cramer said that he expects the company will beat expectations.
However, the stock has gone up 50% in the last year, and 33% year to date, and the expectations for Deere are high, he said. So Cramer told a caller that he would put half of his position on now and then hope the stock comes in.
If it runs higher after it reports, a gain is still made.
Cramer said that he also likes
Archer Daniels Midland
He said that he is pleased by the growth that he's seen in
, but that he would rather buy
, which he also owns for his trust.
He likes the products made by Citrix, a company that like Informatica makes infrastructure software. Informatica is an interesting $15 stock, he said, but Citrix is the faster grower and has better management.
A caller wanted to know if the upcoming
stock split should affect his decision whether or not to buy. Cramer said that FedEx, along with
, is a terrific freight forwarder.
If FedEx's stock splits, then it means that investors will have two shares for every share owned. While this doesn't necessarily create a lot of value, it does if the stocks go higher.
But Cramer said that he would own FedEx, regardless of a split, because it's one of the best stocks to own in this space.
is seeing lots of sellers and the company's latest quarter has revealed that its expenses have risen too fast, Cramer said.
The company bought mutual funds from
, which he felt was a good move, but spent too much on promoting them.
The stock is down and the damage is likely done, he said, but he would not confidently recommend the stock.
A caller said that
has jumped 14.5% since he bought it; and he wanted to know whether to sell some of his position or to hold onto the stock.
Cramer said he would be more conservative and take some off the table. He also said that he believes
has run its course.
The company is based in Baton Rouge, La., and has received a lot of business in the wake of Hurricane Katrina. But Cramer said that it consistently overpromises and seriously underdelivers.
He said he would recommend URS and
instead of Shaw. He owns both of these picks for
He said that
is a big, boring company, just like
. He added that it just doesn't give a bang for the buck, and that he would swap out of it.
Finally, he said that he would wait for
to hit $11 before buying more, and that right now he prefers
At the time of publication, Cramer was long Microsoft, Cephalon, URS, Foster Wheeler and Citrix Systems.
James J. 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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