Insider buying and selling can occasionally tip the scales on a stock, James Cramer said on his
"RealMoney" radio show. For example, Cramer is "itching to take action" in Lions Gate Entertainment ( LGF) because of strong fundamentals coupled with insider buying. Lions Gate insiders have recently made "concentrated open market" purchases, and such insider buying is an example of something that catches Cramer's eye and prompts him to dig deeper. On the other hand, Overstock.com ( OSTK), while it has lots of insider buying, is a "battleground" that Cramer does not want to get caught up in. He also doesn't like the business model, he said. Finally, Pentair ( PNR) is an example where an insider sale tipped the scale toward selling, said Cramer. On Wednesday, Cramer sold his position in Pentair after the CEO filed Tuesday to sell 30,000 shares. Some had speculated on Pentair as a hurricane rebuild play. However, with the stock near its 52-week low, less-than-stellar fundamentals and the CEO selling stock, there must not be any big orders coming, said Cramer. "If there were, this guy should know," he said. A caller asked about Comstock Homebuilding ( CHCI). Cramer said the company is being squeezed by rising raw costs, and the latest Fed beige book report indicates housing has "cooled a little bit." That information coupled with the devastation from Hurricane Katrina could cause the Fed to stop raising rates, said Cramer. The bottom line for Cramer is "at eight times earnings, it's not worth selling." Cramer would hold the stock. Another caller asked about Ultra Petroleum ( UPL). Cramer was a fan of the stock. He "thinks it goes higher." But he recommended selling a little if you have a big gain. Cramer said Spectranetics ( SPNC) was "not a bad company." He said the stock seemed stretched, though, so he would "take a little off the table and let the rest run."
Picks and PansIn a segment called "Am I Diversified," Cramer commented on listeners' questions about the stocks in their portfolios. Tyco ( TYC): Cramer prefers General Electric ( GE), which has a "nice yield." Advanced Micro Devices ( AMD): Cramer prefers Intel ( INTC). American International Group ( AIG): We will first hear about hurricane losses, and later we should hear about the company raising premiums. Schering-Plough ( SGP): Cramer's "favorite" large-pharmaceutical stock. Altria ( MO): Company just boosted its dividend, is at its 52-week high, yields 4.5%, has growth and will split up into different companies soon. Chevron ( CVX): The "most overlooked" of the oil stocks. "Doing a lot of things right." Paid "OK" for Unocal. Equity Office Properties Trust ( EOP): "One of the best-run REITs." Verizon ( VZ): Its landline business is "going away." But the stock yields 5%, and that dividend is safe. The stock may not be going anywhere fast, though. Duke Energy ( DUK): Cramer's favorite utility stock. The CEO is paid entirely in stock. The dividend yield is 4.25%. Microsoft ( MSFT): Xbox 360 launches in a few weeks. Its new Vista operating system is on the horizon, and there could be another special dividend before long. Sears Holdings ( SHLD): Reports quarterly earnings Thursday. Cramer isn't concerned how the quarter will turn out. He owns SHLD "because of management" and wants to "give Eddie Lampert a chance." Cramer hopes the stock will go down, so he can buy more. as he likes SHLD for the long term. Valero Energy ( VLO): A "monster company" that has been the No. 1 performing stock in the S&P 500 this year. Valero's CEO will be a guest on Cramer's "Mad Money" TV show Wednesday on CNBC. Boeing ( BA): Cramer added to his Boeing position Wednesday. It has "excellent management," which is taking on its union so as "not to be Ford ( F) and General Motors ( GM)," which have high labor costs.
Novavax ( NVAX): Cramer likes Novavax as a speculative play. Sirius Satellite Radio ( SIRI): With CEO Mel Karmazin, Sirius is a "real player." CenterPoint Energy ( CNP): Cramer likes it as a utility play. TurboChef Technologies ( OVEN): An "interesting play on restaurants and maybe even at home." LoJack ( LOJN): The company is "doing pretty well." In response to an email question about mutual funds, Cramer said it is the fund's manager that matters, not the company or the name of the fund. Cramer likes Fidelity's Contrafund, run by Will Danoff, Legg Mason's Aggressive Growth Fund, run by Richard Freeman, and John Hancock's Value Fund run by Richard Pzena. These are the "guys I want to go to," said Cramer. Finally, Cramer laid out his stance on the market, saying he wants to be a "buyer only of weakness" and a "seller of many stocks." Inflation, oil and gas are still problems. Cramer's favorite stocks right now include Boeing, which is at a "very, very critical moment" with management "trying to get its arms around health care benefits." Boeing is a lot like Caterpillar ( CAT) in the early 1980s, said Cramer, harking back to when CAT "took on its union." After negotiations were settled favorably, "from 1984 on, CAT never looked back," said Cramer. The same scenario could be playing out at Boeing. Cramer also likes Lyondell Chemical ( LYO), which will be the "last chemical company standing" and is "doing a lot better" than its competitors. Big pharmas such as Schering-Plough, Johnson & Johnson ( JNJ) and Wyeth ( WYE) "make sense," and it's time to "take profits" in casual dining with gasoline at $3 a gallon.