How to Win a Bidding War Parker-Hannifin ( PH) and Eaton ( ETN) are in a bidding war for British-owned filtration company Domnick Hunter, but the real winner will be either Donaldson ( DCI) or Flanders ( FLDR), said Jim Cramer Wednesday on his "Mad Money" TV show. Whichever company -- Parker-Hannifin or Eaton -- loses the battle for Domnick Hunter is likely to look elsewhere for an acquisition, said Cramer. He believes either Donaldson or Flanders will be the target. Donaldson has been a "solid" performer and would make a good investment regardless of whether it receives a takeover bid, said Cramer. Flanders, on the other hand, although it hasn't performed as well as Donaldson, is perhaps better positioned. Thus, Cramer would "buy a little of both."
(Without Even Trying)
China Demand Commands AttentionCramer changed his tune on a stock he panned Tuesday, China Medical Technologies ( CMED). Cramer usually avoids recommending Chinese companies because of the relatively lax investor protections there and the country's history of being "less friendly to capitalists." However, China Medical Technologies makes ultrasound machines that break up tumors, which is a "good line of work," said Cramer. Additionally, General Electric ( GE) owns 15% of the company, and that gives him reassurance. "This stock gets the seal of approval from good old fashioned American capitalism, not just the PRC." China is investing heavily in its health-care infrastructure, and "some of that money is bound to come China Med's way," he said. The company, which recently became public, is profitable and "cheap," said Cramer, who expects "imminent" research coverage. "I was wrong. I want you to buy China Medical Technologies ... before it goes even higher," he said. Meanwhile, due to seemingly insatiable demand from China, it's time to back up the truck on the commodities, said Cramer. One play he likes is Rio Tinto ( RTP), one of the world's largest mineral companies. Over half of Rio Tinto's business comes from copper, iron, coal and molybdenum, all of which are in heavy demand from China. Although the stock closed the regular trading session Wednesday at $156.85, it's not expensive on a P/E basis, said Cramer. "I think it's a great buy."
Picks and PansIn a segment called "Am I Diversified?" Cramer said these things about stocks in viewers' portfolios. Textron ( TXT): "I really like that ... great aerospace play" as well as defense. Yum! Brands ( YUM): "They keep delivering the numbers." Royal Bank of Canada ( RY): "Class act." PetroChina ( PTR): "We like PetroChina because Warren Buffett's got the stake in oil and they're not making any more of it."
Lightning RoundBullish Cramer was bullish on Qualcomm ( QCOM), Chesapeake Energy ( CHK), NovAtel ( NGPS), Peabody Energy ( BTU), Intel ( INTC), General Motors ( GM), Toyota Motor ( TM), XTO Energy ( XTO), Parker Drilling ( PKD), Ashland ( ASH), Lucent ( LU), The Southern Company ( SO) and GameStop ( GME). Bearish Cramer was bearish on Wal-Mart Stores ( WMT), Applied Materials ( AMAT), Gibraltar Industries ( ROCK), AmSouth Bancorporation ( ASO), Linear Technology ( LLTC), Seagate Technology ( STX), Synaptics ( SYNA), First Niagara Financial ( FNFG), Montpelier Re ( MRH), Tempur-Pedic ( TPX) and Calpine ( CPN).
Interested in more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here. It's a series of articles from Cramer on how to become a better investor. The following table lists some of the rules that Cramer dissects.
|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|
|Check back for more of Cramer's Rules|