The phone and cable companies are fighting a war to see who will be the largest broadband provider, Jim Cramer told his "RealMoney" radio show listeners Thursday. Conventional wisdom dictates that in a situation like this, both sides lose. When companies go head-to-head, they tend to spark price wars and reduce their opportunities to rake in big profits because competition is too fierce. But both sides seem to be winning in this case, he said. Comcast ( CMCSA) "finally got its act together on the cable end," and phone companies AT&T ( T) and Verizon ( VZ) are doing well, too. This story could produce other winners, too. Cramer said that as the companies see their earnings grow, they will start spending again on technology, and this will help battered tech names like Conexant ( CNXT), JDSU ( JDSU) and Tellabs ( TLAB). The stocks have fallen, and it may be too late to dump them now, he said. But he believes that they'll start getting orders six months from now.
There have been a lot of winners this earnings season, Cramer said, pointing first to Merck ( MRK), which beat the numbers by a mile. Altria ( MO), which he owns for his charitable trust Action Alerts PLUS , also surprised to the upside because its Kraft ( KFT) division outperformed. He said that everything in the oil patch is working and that you could pick whatever you want. He likes ConocoPhillips ( COP) and Schlumberger ( SLB). Safeway ( SWY) was the winner among the supermarkets, he said.
"Today's market is brought to you by the number four," Cramer said, noting that with the market up for the fourth straight session, this is the best rally we've seen since May 11. (The S&P 500 and Nasdaq both subsequently fell into negative territory in recent trading.) Even with turmoil in the Middle East, rising gas prices, a weak quarter from UPS ( UPS), the downgrade of FedEx ( FDX) and Dow Chemical ( DOW) being down 10%, the upswing continues.