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Food for Thought
For a safe, smart way to invest in China, Jim Cramer recommended Yum! Brands ( YUM) Tuesday on his "Mad Money" TV show. Yum!, which owns Taco Bell, Pizza Hut and Kentucky Fried Chicken, may have saturated the U.S. market, said Cramer, but it has far from saturated the market in China. The company has 2280 stores in China, said Cramer, and he expects China to generate 35% of Yum!'s growth through 2007. Additionally, in 2004, 15% of Yum!'s operating profit came from China, said Cramer. By 2007, Cramer expects that number to be 25%. In response to a question about Starbucks ( SBUX) as a play on China, Cramer said the company doesn't yet have the critical mass necessary to see a lot of benefit from China. However, he expects Starbucks to be a China play in the future. Commenting on restaurant stocks in the U.S., Cramer reiterated his bullishness on McCormick & Schmick's Seafood Restaurant ( MSSR) and Ruth's Chris Steak House ( RUTH).
For the first time in 19 years, the real estate prices in Japan are rising, said Cramer. The situation is reminiscent of the U.S., which came out of a real estate depression in 1991. At that time, Cramer made a lot of money investing in Citibank. The Citibank of Japan is Mitsubishi UFJ Financial Group ( MTU), said Cramer. Although MTU's stock looks expensive and appears to have already bottomed, that "doesn't mean you missed most of the move," said Cramer. If Japan's real estate market continues to recover, more and more people will be taking out real estate loans, he said. MTU's earnings should continue to grow, and the stock won't look so expensive, he said. "If my restrictions would let me, I'd be buying some MTU."