Cramer's Mad Money - It's All Rigged (12/11/08)

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday December 11.

CEO Interview: Ronald Shaich, Panera (PNRA)

Lower commodities and gas prices bode well for Panera Bread, said Cramer, since the consumer now has more to spend. The stock is up 34%, Comp sales have been strong for three straight quarters and earnings may rise between 46% and 54%. Shaich told Cramer, “We’re not walking away from that guidance.” The company is flush with cash and is expected to generate $70 million in free cash flow in 2009. While others are moaning about the slowdown, Shaich sees the glass half-full; “A recession is probably the greatest opportunity you can have to build a company and build a fortune.”

Cramer’s Outrage: Les Moonves CBS (CBS)

Cramer began by saying “No one likes Les Moonves more than I do,” but instead of being angry that his stock is down 71%, his network produces overpriced television shows that don’t attract viewers, and other mistakes he and his management have made, Moonves chose to vent instead at NBC head Jeff Zucker (Cramer’s boss) for keeping Jay Leno at NBC. Cramer says the headline on the New York Post should read, “CBS CEO Les Moonves Bashes Himself.”

Sell Block:NYSE Euronext (NYX)

NYSE has been inhabiting Cramer’s Sell Block for a while and was an especially despised stock because Cramer had hoped it would be a winner. Finally, after losing 40 points from ruthless hedge fund selling, Cramer is releasing NYX from the Sell Block because it is now an accidental high-yielder with a dividend at 4.4%. While the dividend will climb as the stock declines, there is also hope for an upside; the company is aggressively improving market share and has seen an increase for two months straight. The AMEX and Euronext acquisitions are being integrated smoothly and there is talk of a merger with Deutsch Bourse. Although Cramer would normally wait for a pullback, but $26 is now a bargain, especially considering Euronext is part of the deal. NYSE is finally a “buy buy buy” said Cramer.
It’s All Rigged: Exxon Mobil (XOM), Prudential (PRU), Goldman Sachs (GS), Hartford Financial (HIG)

Many investors don’t believe in the market anymore, especially since Exxon can jump 10% without a catalyst, while Prudential, Goldman Sachs and Hartford Financial drop no matter what the news is. If people feel there is significant manipulation going on, they are right, according to Cramer. SEC Chairman Chris Cox has done away with essential regulations that create a fair environment for trading. Only by reinstating these regulations can trust in the market be restored. “You do have every reason to distrust everything this market throws at you,” Cramer said. However, there are chances to make money for investors who look at the CEOs, the fundamentals, and strong dividends.

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Comments

[Another View]

Typical Cramer. Last year NYX was his stock of the year - around $100. If you held it, you can now buy more at $26 with his buy...buy...buy.

2008 Dec 12 11:16 AM

[herbert hoover]

Is this the same NYX that Cramer told his viewers to SELL< SELL< SELL at $20 a share two weeks ago? Now at 26 it's a bargain?

No wonder he works at CNBC. He fits right in with the other clowns.

2008 Dec 12 11:39 AM

[Tiger Claws]

Be skeptical of CEO " guidance " re Cramer's buying into Panera Bread Co's Ronald Shaich's wild expectations supposedly because with gas prices down and lower commondity " the consumer now has more to spend ". We are going into a deep world wide recession, the likes of which hasn't been seen since the 1930's and that CEO thinks the glass is half full? " The consumer has more to spend " is the most naive comment I have heard in the last ten minutes. What is the price of the Kool Aid he is drinking?

Such comments are the typical hype coming from conflicted CEO's who are salivating over their stock options. Quarterly earnings "guidance" by CEO's and CFO's should be totally ignored. Right or wrong, they cannot be trusted knowing who they are coming from. Panera should do away with earnings estimates quarterly and take "guidance" off their over-priced menu.

2008 Dec 12 12:34 PM

[happysoul77777]

The market is structurally unsound, because the SEC gave too much power to the sellers. The sellers can sell short stocks naked for two days before they have to deliver. In addition, the repeal of the uptick rule has given the sellers the power to execute bear raids at will.

The FASB accountants also abe the sellers by forcing financial institutions to abandon cash flows and mark to market their portfolios at depressed prices. As a result, there has been an implosion of capital world-wide.

The SEC and the FASB have done a good job destroying capitalism this year better than any communist or Al Quaeda!

2008 Dec 13 01:14 AM