- a portfolio for Obama's agenda,
- blazing regioanl banks, and
- utilities and natural gas.
Here's Your Portfolio If Obama's Agenda Wins
Posted at 9:36 a.m. EDT, March 16, 2010 There will always be money. It will always look for a home. If our budget deficit explodes and taxes overwhelm us because of Medicare, the money that's left -- and there will be some -- will seek that home. Perhaps we will be like the Argentines and Brazilians in the1980s who sent their money here. Perhaps it will be like the Americans in the 1920s who sent their money to Paris because it was fiscally the most conservative with the fastest-rallying stock market. Perhaps it will be in real estate or gold because people sense chaos, and the former (if high end) holds value and the latter is eternal because people believe in it. Always. Or it could just go to Australia and Canada, two countries with wealthier populaces that don't drain the treasury. Or it could just go to Altria ( MO), Kinder Morgan Partners ( KMP) and Dominion ( D). I hear the bulls talking about industrial production, driven by autos and China, and I hear the bears talking about Nancy Pelosi and the desire to sneak legislation through a process that is meant to check legislation so the minority isn't disenfranchised. Remember, I think the latter wins. Which means all of those alternatives make more sense to me. You have a Canadian bank yielding 4% with growth prospects and you have a U.S. bank yielding next to nothing with growth prospects hanging on Congress' every word. Well, you get the picture. Thirty percent foreign is not too much if the agenda passes. Ten percent gold is not too much. Ten percent in natural resource stocks that benefit from Chinese growth. The rest in some cash, some higher-dividend yielding stocks and a handful -- 15%? -- in the fast Internet/smartphone/cloud computing game. That will about do it. At the time of publication, Cramer was long Altria.
Regional Banks Still Blazing
Posted at 11:36 a.m. EDT, March 17, 2010 Regional banks are still on fire, and I think the move can still be justified. What's most interesting to me is that there's little differential between companies that need money and those that don't. Zions Bancorp ( ZION), for example, has run 10 points without raising money, even though it is obvious that the company needs to. That's why I have been saying that it felt like takeover talk, but it's moved too darn much to believe that any more. Regardless, it now has a stock price high enough that it can solve its balance sheet problems. Huntington Bancshares ( HBAN), on the other hand, is so well-capitalized that I am thinking it must have great earnings ahead of it because the dilution's pretty heavy. Regions Financial ( RF) is also a best-in-show mover that can go higher. Now, maybe it is right to focus on First Horizon ( FHN). It has a terrific balance sheet in a good region: Memphis. It's got decent management and lots of growth opportunities. I like it here. Of course, I still think that PNC Financial ( PNC) and BB&T ( BBT) have a lot of room to move up, the latter being a particularly exciting stock. These breakouts show no sign of stopping. There seems to be a lot of room to run. The easy points have been made, but the next leg beckons. Random musings: Deckers ( DECK) is still cheap. I would not let it go. At the time of publication, Cramer had no positions in the stocks mentioned.
Utilities Need Incentive to Switch to Nat Gas
Posted at 12:09 p.m. EDT, March 18, 2010 You know what's worrisome about the natural gas complex that I like so much? When you look at the price of natural gas, you have to recognize that it's such a bargain that the users should be lapping it up. They aren't. The users, just so we are clear, are the utilities, more specifically, the 50% of U.S. utilities that burn coal. The price you see, with nat gas at $4, should tip big utilities to switch to nat gas and lock in long-term contracts. But they aren't. Only Xcel Energy ( XEL) has made such a move. Now perhaps utilities around the country are thinking of doing this and Xcel is just a first mover. Perhaps the others are about to fall in line. But you have to admit that this fuel is so cheap that they all should be doing it. I believe that a big part of why they aren't is that the president is such a voracious backer of clean coal that there is no incentive for the utilities to switch. Further, I believe that despite assurances of Apache ( APA), Chesapeake ( CHK), Range Resources ( RRC), EQT ( EQT), EOG Resources ( EOG) and presumably now Consol Energy ( CNX), the utilities consider this fuel to be not reliable. They don't seem to trust the nat-gas companies' abilities to deliver for the long term. Until we see these contracts, few market players are going to want to own these stocks, because the short-term earnings estimates are at risk. One suggestion: This is a great time to buy Clean Energy Fuels ( CLNE). It is the play on the cheapness of the fuel itself, as all fleets will have to consider nat gas to save money. Plus, if Clean Energy's management is right, we are going to get the one other spur for nat gas use: a Nat Gas Act that will encourage conversion for 18-wheel trucks. Utilities and Congress: the only two entities that can get this price from going still lower as we go into the season where it is least in demand. Random musings: Make sure you read Glenn Williams' column,