Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday January 3.
Bank of America (BAC), Home Depot (HD), Disney (DIS), JPMorgan (JPM), American Express (AXP), Travelers (TRV), General Electric (GE), Wal-Mart (WMT), Pfizer (PFE), 3M (MMM), United Technologies (UTX), AT&T (T), Cisco (CSCO), Merck (MRK), Verizon (VZ), UnitedHealth (UNH), Johnson & Johnson (JNJ), IBM (IBM), Coca-Cola (KO), Microsoft (MSFT), Oracle (ORCL), Exxon Mobil (XOM), Chevron (CVX), Caterpillar (CAT), Dupont (DD), McDonald's (MCD), Hewlett-Packard (HPQ). Other stocks mentioned: Visa (V), Transocean (RIG), Mellanox (MLNX), Raytheon (RTN), Lockheed Martin (LMT)
The Dow underperformed the other averages in 2012, finishing up only 7.2%. Cramer took a closer look at the Dow to see which were the best Dow performers in 2012, which were the dogs that kept the average down, and what the Dow's prospects may be for 2013.
Bank of America (BAC) was the Dow's top performer, up 108%. Cramer thinks the stock is still cheap, because the housing recovery has barely begun, and he predicts BAC could see another 16%.
Home Depot (HD) rallied 47% and is taking market share. With the need to rebuild after Sandy, Cramer thinks HD will go higher.
Disney (DIS) was up 32% on increased theme park attendance and great ESPN numbers. Even though the previous quarter was disappointing, Cramer thinks DIS could see a 10% gain.
JPMorgan (JPM) rose 32%, American Express (AXP) gained 21% and Travelers (TRV) is up 21%, but Cramer doesn't think these financials can maintain their runs. JPM's stock tends to do poorly at the current levels. Instead of AXP, Cramer recommends Visa (V).
General Electric (GE) saw a 17% gain in spite of downbeat analyst comments. GE is likely to boost its already generous 3.6% yield.
Wal-Mart (WMT) increased 15%, but Cramer doesn't think it can repeat this performance, although WMT might rise to $77.
Pfizer (PFE) was up 15%, and Cramer thinks it can go higher with the success of its animal health business.
3M (MMM) rose 13% and United Technologies (UTX) gained 12%. Cramer thinks both companies should equal or excel their performance in 2012 because of strength in Asia. UTX was held back by worries over military spending cuts, but now that that concern has been eased, it can go higher.
Merck (MRK) rose only 8.6%, and fault is in its unexciting pipeline.
Verizon (VZ) rose 8%, but Cramer thinks the company could improve, because he predicts iPhone sales will be strong.
United Health (UNH) gained just 7% and was held back by lack of job growth.
Johnson & Johnson (JNJ) gained only 6.9%, but Cramer believes that management will bring out value by breaking the company up. Cramer says JNJ is one of his favorite Dow stocks.
IBM (IBM) rose just 4.2%, but Cramer thinks the stock could double this performance by 2013.
Coca-Cola (KO) was up 3.6%, but a weaker dollar and a more robust Asia and Europe could be catalysts for the stock.
Microsoft (MSFT) is "hard to love," even with its new product cycle. MSFT rose just 2.9%, and Cramer thinks the stock could return to the low 30s.
Oracle (ORCL) has hardly risen at all, and has been a lackluster performer.
Boeing (BA) is up 2.7%, but Cramer thinks the new product cycle and the aerospace bull market could triple 2012's gains.
Alcoa (AA) rose only 1%, which seems surprising in the global growth environment, but there is a problem with an aluminum glut.
Caterpillar (CAT) is the best "Dog of the Dow," and is a great China play, but it was down 1.1% for the year after management revised its bullish forecast.
Dupont (DD) was down 1.7%, and unless there is accelerated growth, the company, which is overly dependent on commodity chemicals, is not likely to see an upside.
McDonald's (MCD) is down 12% and seems to have lost some of its magic. A weaker dollar could be a tailwind.
Intel (INTC) fell 15%, with its balance sheet as a major problem.
Hewlett Packard (HPQ) fell a disastrous 44%. While Cramer doesn't expect an equally terrible performance, it is a company that has lost its way.
Cramer predicts a brighter 2013 for the Dow than last year.
Cramer took some calls:
Transocean (RIG) can go 5 points higher, or more if oil goes up.
Mellanox (MLNX): Cramer is reiterating his Sell; "Don't touch it."
CEO Interview: Charif Souki, Cheniere Energy (LNG)
The U.S. has prodigious natural gas reserves, but the government won't get behind the idea of natural gas as a bridge fuel. The solution is to export natural gas, especially given the glut and the low prices, and few businesses have done this better than Cheniere Energy (LNG), which is up 147% since Cramer got behind it in 2011. CEO Charif Souki is confident the company can continue to take market share from competitors, and he added, "There is no limit to how much can be exported." He confessed that LNG's projections were conservative; "We are a year ahead of schedule." Cramer commented, "Cheniere has delivered and will continue to deliver."
Hormel Foods (HRL) recently announced the acquisition of the Skippy Peanut Butter Brands from Unilever (UL). Cramer compared the acquisition to Smucker's (SJM) successful acquisition of Jif Brands, which brought the stock up substantially. Cramer thinks the same thing will happen to Hormel, which rose 3.72% on the news. CEO Jeffrey Ettinger said, "We are definitely in a position to dominate sandwiches," with its luncheon meat core brands in addition to its peanut butter acquisition. Since Skippy brands are in an estimated 70% of U.S. homes, Hormel should gain market share, and with peanut butter rising in popularity in Asia, HRL should see opportunity in emerging markets. The acquisition was done in cash, and CEO Jeffrey Ettinger says he sees more possible acquisitions in HRL's pipeline.
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