Coal Callin'"Coal is hot, getting hotter. I need you in Peabody ( BTU - Get Report) coal," said Jim Cramer Thursday on his "Mad Money" TV show. Cramer is a fan of coal because as the prices of natural gas and oil increase, coal, a cheaper alternative for electricity production, takes market share. Most coal stocks, however, are not good investments because they either have primarily high-sulfur coal, have sold too much future coal production at current prices (which won't allow them to profit as much as the price of coal increases), or they don't have large enough reserves. However, Peabody has 50 years' worth of proven coal reserves, much of which isn't locked in at current prices, said Cramer. It also has "ultralow" sulfur coal and is a best-of-breed play in the coal sector, Cramer added. Cramer was bearish on Foundation Coal ( FCL), Consol Energy ( CNX - Get Report), Arch Coal ( ACI) and Massey Energy ( MEE). Cramer said most of FCL's coal was high sulfur, and it doesn't have very much coal. Consol also has mostly high-sulfur coal, he said, and ACI has low-sulfur coal but can't capture the upside because most its coal is locked in at current prices. Cramer is also uncomfortable with ACI's debt. Cramer said Massey was OK, but it wasn't best of breed. A caller asked for names of companies that supply the coal industry. Cramer mentioned Joy Global ( JOYG), Terex ( TEX) and Bucyrus ( BUCY) as good plays.
The Sum of All Parts and JAH LoveCramer had Marketwatch.com senior columnist Herb Greenberg on the show to ask if he'd changed his bearish tune on Johnson Controls ( JCI - Get Report) now that
The Life of a DogJohnson & Johnson ( JNJ) is being forced by the European Union to sell three of its business units in order to receive the EU's blessing of its planned acquisition of Guidant ( GDT). Cramer said he would buy Edwards Lifesciences ( EW) on the speculation that Edwards might be able to buy some of the businesses "on the cheap." Cramer cautioned, however, that Edwards is a "dog" of a stock and that the trade would only work if it actually pans out the way he is guessing. Toll Brothers ( TOL) reported a "stellar" quarter Thursday but saw its stock trade down. Action like that is the "trading death knell," said Cramer, because analysts who like to follow -- not lead -- will "freak out" and are likely to downgrade the stock. "We're going to catch a downgrade. It's still not too late to sell," Cramer said of Toll.
BullishCramer was bullish on News Corp. ( NWS - Get Report), Microsoft ( MSFT - Get Report), XM Satellite Radio ( XMSR), Aflac ( AFL - Get Report), Internet Security Systems ( ISSX), Bancolombia ( CIB - Get Report), UnitedHealth Group ( UNH - Get Report), St. Joe ( JOE - Get Report), Cimarex Energy ( XEC - Get Report), El Paso ( EP), Tibco Software ( TIBX), Monster Worldwide ( MNST - Get Report), Hershey ( HSY - Get Report) and Genesis Microchip ( GNSS).
BearishCramer was bearish on Calpine ( CPN), Urban Outfitters ( URBN), Teva Pharmaceutical Industries ( TEVA), Royal Caribbean Cruises ( RCL), Trex ( TWP), RealNetworks ( RNWK), Check Point Software ( CHKP), PetroQuest Energy ( PQUE), FARO Technologies ( FARO), Frontline ( FRO), Serena Software ( SRNA), Cubist Pharmaceuticals ( CBST), Rambus ( RMBS), MCI ( MCIP) and Wal-Mart ( WMT).
|1.||Pigs Get Slaughtered||2.||It's OK to Pay the Taxes|
|3.||Don't Buy All at Once||4.||Buy Damaged Stocks|
|5.||Diversify to Control Risk||6.||Do Your Homework|
|7.||Don't Panic||8.||Buy Best-of-Breed|
|9.||Defend Some Stocks||10.||Don't Bet on Bad Stocks|
|11.||Own Fewer Names||12.||Cash Is for Winners|
|13.||No Regrets||14.||Expect Corrections|
|15.||Know Bonds||16.||Don't Subsidize Losers|
|17.||No Room for Hope||18.||Be Flexible|
|19.||Quit When Execs Do||20.||Patience Is a Virtue|
|21.||Be a TV Critic||22.||When to Wait 30 Days|
|23.||Beware the Hype||24.||Explain Your Picks|
|25.||Find the Bull Market|