Cramer's Mad Money: Deere Mr. President (11/3/08)

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Monday, November 3.

Election Picks: First Solar (FSLR), Chesapeake Energy (CHK), Potash (POT), Agrium (AGU), Mosaic (MOS), Gilead Sciences (GILD), Humana (HUM), Halliburton (HAL), Transocean (RIG) ExxonMobil (XOM), Valero (VLO), General Dynamics (GD), AeroVironment (AVAV), KBR (KBR), Tenet Healthcare (THC)

Cramer discussed the election’s effect on stocks and said an Obama victory would be good news for alternative energy, fertilizer and healthcare and bad news for drillers and coal. His picks include First Solar, Chesapeake Energy, Potash, Agrium, Mosaic, Celgene, Gilead Sciences, and Humana. A McCain victory should be a win for oil and defense, and Cramer’s GOP Administration picks are: Halliburton, Transocean, ExxonMobil, Valero and GD. For those who are hedging their bets in this election, AeroVironment, KBR and Tenet Healthcare are good picks regardless of who wins.

Deere (DE) Mr. President

The polls seem to be indicating an Obama win, and if the Democrats gain control of the White House, agriculture will be back in the saddle. Like many agriculture and commodities stocks, Deere was hit hard, falling 59% from its 52-week high. However, the company hasn’t bit the dust; September same-store sales grew both domestically and overseas. Cramer invited Chairman, President and CEO of Deere, Robert  Lane, to discuss Deere’s ability to provide food and fuel to the world, declining grain inventories, bountiful harvests, low debt and innovations in equipment. Lane also noted Deere was successful in selling its commercial financing in the credit markets and offers flexible financing for its customers. Lane told Cramer he is not worried about commodity price manipulation, but has his eye on the long-term development of alternative fuels to keep Deere moving. “It’s obviously a very rocky time, but Deere is a very strong ship,” Lane said.

Terra Cognita: Terra Nitrogen (TNH)

An Obama victory will be good for fertilizer, since the Democratic candidate has openly supported increased ethanol production. Corn requires three times as much fertilizer as wheat, and demand for maize is expected to increase 33% in the coming year. However, not all fertilizer stocks are created equal; Terra is more levered to corn production and its main ingredient, ammonium nitrate is taking market share from ammonia. The stock offers a whopping 12.8% dividend and Terra is a master limited partnership which is required to return its free cash flow to shareholders. The next quarterly dividend is $2.80, and interested investors should buy the stock by Tuesday to qualify before the Wednesday deadline. Terra Industries owns 75% of Terra Nitrogen, and while Cramer usually stays away from parent-subsidiary plays, he thinks there is a good chance for an upside in TNH.

Mad Mail: Mastercard (MA)

Concerning the economy, Cramer said, “…I am an optimist about what can happen. I don’t want to be considered a bull or a bear here. But I am an optimist. I think that things could work out over the next 18 months. We need housing to bottom…” Cramer said he was uneasy about China which he thinks is heading toward a severe recession. Cramer told another viewer that, given MA’s 10 point rally, he would wait for a pullback before buying.

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Comments

[Mia:]

Cramer has been saying --- sell sell sell for MOS and other fertilizer companies. Today he says buy buy buy for the same companies when thier prices have gone up by fifteen percent.

Does the man really understand what he is talking about?

2008 Nov 04 06:13 AM

[Ozarker:]

He does--It's the rest of the world that's gone mad.

2008 Nov 04 08:58 AM

[pansyed:]

Mia - pay attention to the market. Some people like to wait until the move has established some type of trend. This stops some of the whiplash. Any prediction by anyone including yourself should be subject to modification. If you got out on the last bad fall of stock prices it was wise since nobody had any idea of how far the market was to drop. Cramer is just saying it appears the market for these stocks will go up.

Cramer makes mistakes but he also gives you a valid method of thinking with some guidance. You need to do the homework for yourself.

2008 Nov 04 09:22 AM

[Spinner:]

It's always better to lose 10% on the way up rather than on the way down... but I still blame Cramer for the total collapse of SIRI

2008 Nov 04 09:37 AM

[Martin G.l:]

I resent his attitude of total conviction as if he could not possibly be off the mark. He has made his share of bad predictions and should be less certain and a bit humble.
Martin Gingold
Warwick, Pa.

2008 Nov 04 03:10 PM

[Neitherabor...:]

I have seen Jim Cramer's show many times and he's publicly eaten a lot of crow about mistakes he's made. No one can predict exactly what is going to happen in the stock market or with a particular stock in the short term, but long term the market does go up. Do your due diligence and don't accept Jim as the Gospel, use his words as a starting point for your research.

Jim's just a guy who has made a lot of money in the markets and is trying to share his thinking and approach to investing. You do the math.


On Nov 04 03:10 PM Martin G.l wrote:

> I resent his attitude of total conviction as if he could not possibly
> be off the mark. He has made his share of bad predictions and should
> be less certain and a bit humble.
> Martin Gingold
> Warwick, Pa.

2008 Nov 05 10:15 AM

[Neitherabor...:]

I've watched many Mad Money shows and he has publicly eaten a lot of humble pie. We all are responsible for our own investing decisions. If you leave it up to Cramer, you have to accept the results. I suggest you use Cramer to get insights on how to approach analysis of stocks and make your own decisions based on your due diligence and research. It's your money not his.


On Nov 04 03:10 PM Martin G.l wrote:

> I resent his attitude of total conviction as if he could not possibly
> be off the mark. He has made his share of bad predictions and should
> be less certain and a bit humble.
> Martin Gingold
> Warwick, Pa.

2008 Nov 05 10:19 AM

[sickofthehype:]

Cramer's a moron. End of story.
Invest on his tips and you'll end up broke.

2008 Nov 06 08:48 PM