Jim Cramer issued a "triple buy" Monday on Cheniere Energy ( LNG) calling it a "pure play on cronyism" after the energy company hired The Abraham Group, former U.S. Energy Secretary Spencer Abraham's consulting firm, to help navigate the permitting process for its new liquefied natural gas (LNG) facilities. Cramer told viewers of his "Mad Money" TV show Cheniere has begun construction on two LNG receiving terminals on the Gulf Coast and plans to build two more there. After hurricanes Katrina and Rita, Cramer believed plans for all Cheniere's LNG terminals might be scrapped as the Gulf could have been perceived as too risky a place to locate them. However, it seems momentum has not waned, and the projects are moving forward, he said. Cramer said Cheniere still needs Federal Energy Regulatory Commission approval before it can proceed with its third and fourth facilities, which is where Abraham comes in. He's betting with Abraham's help, the projects will go through. If they don't, though, the stock will get hurt. Additionally, Cheniere has an energy trading business, which adds to the risk in the stock, he said. Give it 18 months to "work the Spencer magic," said Cramer. This is a multiyear positive regulator story, said Cramer.
Cendant Value ScopeCendant ( CD) CEO Henry Silverman joined Cramer to talk about his plans to split up the company. Cramer asked Silverman about the 6.57% drop in his company's stock today on the split-up announcement. Silverman said he didn't believe it was the announcement of a split-up that caused the stock to drop today. He said the combination of hurricanes Katrina and Rita as well as the London terrorist bombings hurt Cendant's travel business. "We're not growing as quickly as we previously thought." Second, he said some investors were disappointed Cendant is not doing a "levered recap."
Getting a Handle on Johnson ControlsCramer remains bullish on Johnson Controls ( JCI) even after the stock's recent rise and good quarterly results Monday. Cramer said he isn't bullish just because the company, through its acquisition of York International ( YRK), is moving away from auto parts and toward energy controls. He's bullish on the prospects that the company might split itself up into an auto parts business and a controls business. If the company decides to do so or even just sell the "hated auto business," that would leave "a pure play on saving money from higher energy costs ... I like the sound of that," said Cramer. Cramer believes something indeed might be in the works based on the stock's recent rise. "It shouldn't be going up the way it's going up unless they're planning on at least splitting the company up. ... The numbers aren't that good," he said. Cramer believes Johnson Controls can go to $75, and he would buy on any pullback. A downgrade Monday after the close has provided an opportunity, he said. In response to a question about Genuine Parts ( GPC), Cramer said the company is too levered to the U.S. automakers, and he is not a fan of the stock.
Schering Puts Hand to the PloughSchering-Plough ( SGP) CEO Fred Hassan joined Cramer by telephone. Cramer asked Hassan why one should buy Schering-Plough's stock here. Hassan said his company is moving from a "survive mode to a thrive mode." Cramer asked if Schering's Nasonex, Remicade and Temodar products would be enough to propel the stock higher. "No. They're not enough. ... We need to do more," said Hassan, adding that the company has been able to expand its product lines in the past two years and that he is optimistic it will be able to do so going forward.
After-Bell ReverberationsCommenting on news after the close, Cramer said that even though Texas Instruments' ( TXN) earnings were better than expected, the guidance was not what he was looking for. "Stay tuned." It's a work in progress, he said, but "under $29, you gotta buy that thing. That's ridiculous." And Nabors Industries' ( NBR) earnings "looked terrific. Refco ( RFXCQ) finished selling last week. So, all the oils are now going to work, and we've got some great quarters coming." PortalPlayer ( PLAY) reported a "great quarter," but "really hurt investors" by filing to do a secondary offering. "I don't respect that at all," said Cramer. Cramer said he understands the selling in the stock, and although he is upset with management, he wouldn't want to sell because the shares are too low.
Lightning RoundBullish Cramer was bullish on International Business Machines ( IBM), St. Joe ( JOE), Nabors Industries ( NBR), Headwaters ( HW), Georgia Gulf ( GGC), Micron Technology ( MU), PetSmart ( PETM), GameStop ( GME), ValueClick ( VCLK), Harley-Davidson ( HDI), Prudential Financial ( PRU), MetLife ( MET), Cerner ( CERN), Bank of America ( BAC), IntraLase ( ILSE), Chicago Mercantile Exchange ( CME), CBOT Holdings ( BOT), Sonic ( SONC) and Google ( GOOG). Bearish Cramer was bearish on Corning ( GLW), Premium Standard Farms ( PORK), Cisco ( CSCO), Alpharma ( ALO), ATI Technologies ( ATYT), Electronic Arts ( ERTS), Zenith National Insurance ( ZNT), LCA-Vision ( LCAV) and Biovail ( BVF).
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|