4 Buys And A Sell From Cramer For Widely Held Stocks

By Chris Lau, Kapitall Contributor   For the week ending February 22, Jim Cramer was net bullish on stocks. Of the 40 companies mentioned, 31 (77.5%) were favorable, while just 9 were bearish calls. The average daily trading volume for the companies covered was 8.1M shares. Notable were companies that had a market capitalization of over $100 billion. Widely-held companies were companies to buy, while Coca-Cola (KO), a company held by Warren Buffett’s Berkshire Hathaway was viewed negatively:

Cramer’s picks often get higher than average trading after they are mentioned, if trading volume is low. For the companies listed above, volume is high enough to make any abnormal moves unlikely.

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Business Section: Investing Ideas

The list average 1-year return is 19%. 

Bank of America Corporation (BAC). Buy. Bank of America is trying to settle over $100 billion in losses with a settlement. The settlement could be around $8.5 billion, and would reduce the uncertainty around the bank’s balance sheet. Even the loss amount is a speculative amount.

The financial firm increased it’s the base salary of Moynihan, Bank of America’s CEO, by 60%. His salary will now be $1.5M in 2013. Last year, he earned $950,000. Including the bonuses earned in 2012, his total earnings was $12M.

Cisco Systems, Inc. (CSCO). Buy. Cisco reported second quarter earnings. Its joint venture with EMC ( EMC) has a run rate of over $1 billion, but since 2009, generated losses for the two firms. The company expects Q3 revenue to be $0.48-$0.50 per share, matching consensus. Gross margin will decline from 62.3% in Q2 to 61%-62%. In Q2, book-to-bill was below 1.

AT&T, Inc. (T). Buy. HTC announced the new HTC One recently, which has a 4.7-inch 1080p display. The device will be coming to AT&T.

Bloomberg reported that the firm may issue 3-year notes that would take advantage of low interest rates. The issuance would yield 1.08%. AT&T has $70B in debt outstanding.

The Coca-Cola Company (KO). Sell. Coca-Cola shares remain range-bound since September 2012. Shares trade close to the upper-range, at around $38.50. In its quarterly earnings call, the company anticipates volumes to grow by 3%. Double-digit growth is forecast for its business in China and in other Asian markets. The company plays to buyback shares in 2013 in the range of between $3B and $3.5B.


Verizon Communications Inc. (VZ). Buy. Verizon’s partner, Vodafone ( VOD), is mulling over its ownership in the joint Verizon Wireless ownership. Verizon Communications owns 55% of the division. Vodafone is unlikely to sell the unit, since Verizon Wireless contributes to more than half of Vodafone’s operating profit. Vodafone shares trade at near a 52-week low, and pays a dividend that yields 4.10%.


Written by Kapitall Contributor Chris Lau