Maize PlaysThere's only one way to make some money off high gasoline prices, Jim Cramer told "Mad Money" viewers Wednesday. And that's by cracking some corn and delving into the world of ethanol. President Bush is talking about relieving gas prices, but Cramer said that he doesn't care about the Strategic Petroleum Reserve or the price-gouging investigation. All he heard is that Bush is deeply committed to the agricultural expansion of ethanol. That means farmers will need to grow more corn, and to do that will need more equipment. But that doesn't mean it's time to run out and buy Deere ( DE), he said. The company is too picked over, and since it's up again it's getting harder to make money in the stock, he said. Deere isn't a sell, he said. It's just a don't buy. It's time to work down from best of breed to some of the less-prestigious names that could make you ethanol money, he said, referring to Agco ( AG - Get Report) and Gehl . Agco makes combines that thresh, separate and clean corn, making it a pure play on ethanol production, he said. The company is small and has gone unnoticed for a long time, but it will likely gain attention thanks to the "federally mandated arms race" in the ethanol space, he added. "Everyone will be scrambling to buy equipment to plant and harvest corn," he said. As for Gehl, Cramer said that the company has basically the same equipment that Agco has, as well as products for the dairy, livestock and poultry agricultural sectors. It's not a pure play, Cramer said, but he believes that it could also benefit from the new popularity of ethanol production. Like Agco, the company has flown under Wall Street's radar for a long time, and "stocks that go unnoticed are often undervalued," he said.
Nuclear Bull Market"On April 26, 1986, 20 years ago, the Soviet Union dropped the ball," Cramer said, referring to the fact that Wednesday was the 20th anniversary of the Chernobyl nuclear power plant disaster. Not only did Chernobyl help destroy the Soviet Union, but it also stopped nuclear power dead in its tracks, he said. "Chernobyl freaked out Europe, which depends pretty heavily on nuclear power." But 20 years later, we need to start thinking about pouring money into all things nuclear, he said, because we are in a "nuclear bull market." Turkey and Iran are vying for plants, and India and China want more, he said. The European Union lives off of nuclear energy, and we'll see the expansion of nuclear capacity in the U.S. because oil and natural gas are too expensive, he added. Even coal is getting more expensive, and even with scrubbers, he pointed out that it's dirty. But after the initial cost of building nuclear plants, the power itself is cheap, said Cramer. And it's really clean, aside from the issue of disposing of used uranium, he added. So he gave viewers the rundown on where to make money on nuclear energy, beginning from the ground up with BHP Billiton ( BHP), a stock he owns for his
Little BiotechsColey Pharmaceutical was a little biotech stock that Cramer thought was worth speculating in a while back, and since then it has lost 2 points to trade at just under $15. But he still thinks that it's an exciting biotech company and is worth buying incrementally starting now. The company has deals with Big Pharma companies Pfizer ( PFE) and Sanofi-Aventis ( SNY), and Cramer said that little biotechs that work with the big guys usually have the most promising drugs and are the most likely to be acquired. Coley has two licensing deals that allow analysts to derive legitimate valuation from these partnerships, Cramer said. And he said that it has three potentially great drugs that could make the company a lot of money. He said it could make up to $500 million in milestone payments on the drug it is working on with Pfizer, and that it has a promising asthma drug in the pipeline with Aventis. The third drug is its Hepatitis C drug that it is developing solo. But that drug is in phase I trials, he said, so he wouldn't "bet the farm" on this one. But the recent sharp selloff in biotech makes the sector look like it's a house of pain. So why does Cramer think now it is the time to start a position in a company like Coley? The whole health care complex is "decidedly unsexy" right now, he said, because of a vicious rotation out of this space and into hotter markets including aerospace, defense, infrastructure and mining. While he, too, has been bullish on these now-hot markets, Cramer said that the biotech selloff is overdone and that the sector "always bounces back." Reaching into the "Mad Money" Mailbag, Cramer agreed with a viewer that Quanta Services ( PWR) is two thumbs up. He said that even though Jonathan Schwartz has taken over leadership at Sun Microsystems ( SUNW), he would still stay away from the stock. And he told another viewer that he would never sell Google ( GOOG - Get Report) to buy stocks like Verizon ( VZ), Comcast ( CMCSA), Time Warner ( TWX) and AT&T ( T). Yes, Congress said it could handover Internet control to these companies, but Cramer said that making such a swap would be like trading in a Ferrari for a horse and buggy.
BullishCramer was bullish on Level 3 Communications ( LVLT), WellPoint ( WLP), Brush Engineered Materials ( BW), Dynegy ( DYN), Brocade Communications ( BRCD), Openwave Systems , Broadcom ( BRCM), Nabors ( NBR), Coach ( COH), Halliburton ( HAL), Bank of America ( BAC), Progenics Pharmaceuticals ( PGNX), Chevron ( CVX), Occidental Petroleum ( OXY), BHP Billiton, Phelps Dodge , Southern Copper ( PCU)and Conexant .
BearishCramer was bearish on Pioneer Drilling ( PDC), Vitesse Semiconductor ( VTSS), Murphy Oil ( MUR), EuroZinc Mining and CBOT Holdings ( BOT). For more of Cramer's insights during the most recent Lightning Round,
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