NEW YORK (TheStreet) -- Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- why stocks can sink, whether there's a deal or no deal, and
- how to profit from renewed optimism in the markets.
Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Deal and No Deal
Posted at 12:18 p.m. EST on Thursday, Feb. 13, 2014
Why not buy Comcast (CMCSA) and PepsiCo (PEP)? One's going down because of a deal and the other one's going down because there is no deal and that's a little ridiculous. And why not sell Cisco (CSCO), which is only trading at its current levels because it has some yield. It is hardly a value stock. (See Herb Greenberg for more on Cisco.)
I work for Comcast, so take what I say with a grain of salt, but if the company can get Time Warner (TWC), it can turn around that ne'er-do-well cable outfit in a year and get it to grow instead of shrink. The deal is being paid with stock, so there are no leverage issues. I am confident that the deal will pass muster because there is no overlap and because I don't think the "market power" argument over the broadcast and cable networks will hold water in Washington.
In the meantime, Comcast is a cash flow machine that hasn't been down in ages. It's a buy.
I am shocked that anyone actually believed that PepsiCo was going to split itself up. That has never been in the cards and the 7% growth the company gave you, plus the increased buyback and dividends, makes this stock a terrific opportunity.
The business is strong and the snacks end of the equation makes the tough slogging in domestic carbonated beverages go down pretty easily. It's a buy.
Now, with Cisco, I am always amazed by the sycophants in the analyst community and how they stick by this once great company. Its numbers are lousy, it is losing share to Alcatel Lucent (ALU) and Juniper (JNPR) and it has horrendous leadership. How often can we take disappointment like this? I think the answer is that as long as John Chambers remains CEO, we are going to see these numbers.
Random musings: We think trucks are on the way back and are happy with our Cummins (CMI) position. Disney (DIS) and CBS (CBS) are doing fabulously and the latter is still not overextended. Facebook (FB) and Google (GOOG) are posting very good numbers and the stocks can go higher; the latter one is the largest position in our Action Alerts PLUS charitable trust.
Optimism as the Smoke Clears
Posted at 3:25 p.m. EST on Tuesday, Feb. 11, 2014
It's good to see some stocks come back that really didn't disappoint, but were simply conservative in guidance. Two that I follow, 3M (MMM) and Boeing (BA), were scalded when they offered tempered views of things and people believed that the worst was about to happen.
At a time when you can hear that China's slowing, that our employment gains are minimal, that Latin America and India seem on edge and that the emerging markets are teetering, do you feel like coming out and saying that things looks great for your big industrial company that needs exports to most of these countries to make the numbers? Who would be so insane as to say that?
United Technologies (UTX) hinted as such, but only after it had already guided down. Alcoa (AA) talked about this, but said things could go right or wrong. Honeywell (HON) had a story pretty much without caveats, but it has some really good secular trends going for it.
But 3M and Boeing are squarely in the sights of the markets that are most on edge, so what's the point of raving about them?
[Read: 3 Reasons Bears Never Prosper]
Believe me, this is not an uncommon problem. For example, shouldn't Apple (AAPL) have warned people on the previous conference call to this one about all of the pitfalls ahead? Would that have eliminated the debacle, even as the debacle allowed the company to truly buy stock at the right price?
Now, the amazing thing, of course, is the view that the world's situation has changed for the better since the forecasts. Obviously it hasn't. But Boeing has since talked about some very big contract wins and 3M was good to begin with and there really wasn't anything other than an ephemeral warning.
Now the smoke is clearing and people are circling back to what's really been trashed. Candidly, I didn't believe the optimism could transpire so quickly. But the three-fold combination of a steady, hang-in-there Janet Yellen, a later date for Obamacare and the apparent possibility of a debt agreement are bringing a happy-days-are-here-again perspective that is infecting all!
At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long AAPL, CMI, GOOG and HON.