Cramer's Mad Money - HPQ Best Tech Stock of 2009 (1/5/09) 7 comments
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Socks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Monday January 5.
Best Tech Stock of 2009: Hewlett Packard (HPQ), Electronic Data Systems (EDS), IBM (IBM), Dell (DELL), Lexmark (LXK), EMC (EMC), Microsoft (MSFT)
Cramer already has crowned Hewlett Packard as the best tech stock of 2009. While the stock is down to $36 from $50, Cramer thinks Hewlett Packard’s acquisition of Electronic Data Systems could mean a 26% bounce to $46. Mark Hurd is one of the few CEOs in the tech sector to express confidence in his company’s earnings, and Hurd plans to cut expenses to make the Electronic Data Systems acquisition profitable. Hewlett Packard is already head and shoulders above its competition, Dell and Lexmark and is expected to steal market share from IBM and EMC. While EDS’ exposure to GM may provide some cause for concern, government aid for the auto company may allay worries. Hewlett Packard has a 13.5% growth rate and a small 8.7 price-to-earnings ratio. Cramer thinks HPQ might be ever more sought-after by big money managers than Intel or Microsoft.
Out of the Woods: Freeport McMoRan (FCX), Peabody (BTU), Nordica American Tanker (NAT), Terra Nitrogen (TNH)
Cramer believes that the crises of 2008 are largely over, and the commodities rally on Monday was a sign that Happy Days are Here Again; “There are no more crises waiting in the wings,” he declared. The rally on Monday was different from rallies in 2008 because it wasn’t inflationary, levered to China and will most likely have a more long-term impact, despite the fact that the Dow dropped by the end of the day. Names like Freeport, Peabody, Nordic American Tanker and Terra Nitrogen don’t all make such dramatic moves together on the same day if the economy is in crisis, he said. However, given negative predictions for the unemployment number on Friday, Cramer would not buy these stocks, but would continue his strategy of buying on pullbacks and looking for accidental high-yielders, stocks which have seen a fall their prices but a gain in their yields.
Cramer isn’t buying the Securities and Exchange Commission’s claims that they had no way of knowing that Bernie Madoff was making off with $50 billion. The SEC made 8 reviews but couldn’t find anything, but Cramer ran the same numbers just once and saw something very fishy about the performance of the options Madoff said he was trading. Letters to the SEC’s Boston office were ignored, and feeder funds such as Tremont looked the other way. Cramer quoted a letter from feeder fund Tremont;
“…in addition, information supplied by the investment advisor may be inaccurate or even fraudulent. The co-managers are entitled to rely on such information (provided they do so in good faith) and are not required to undertake any due diligence to confirm the accuracy thereof.”
Cramer says there is no excuse Madoff’s Ponzi scheme to have continued under the SEC’s radar.
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This article has 7 comments:
They then jack up there prices to the hill! Its very unfair and have been ripping the consumer off since the beginning.
BUT, there stock is good. HPQ is a total buy. Another example of how the stock is great, but the company blows! Hey, thats great for traders. I build my own PCs anyway........
Most PC buyers "don't care" about the ability to TWEAK there hardware!
"MOST" PC users want to be able to simply turn on the PC and go! They don't have a clue about the BIOS, what it is or what it does.
They certainly don't know ASUS from ACER when it comes to making a quality or performance choice.
They don't upgrade their hardware like advanced users do, they usually by a new computer if they hit a performance brick wall, or they have it done at the local store where they purchased it.
These facts alone take the sting out of your argument. HP has brand recognition and their prices VS. Quantity is what will determine their position against another product with "Brand Recognition!"
Open your eyes to the BIGGER picture and you can't argue the point from an "Investment" perspective.
On Jan 06 07:36 AM joshuaodonnell wrote:
> HP's computers suck. They have an unlockable BIOS so you can't modify
> anything. They also use the cheapest possible products to build
> there systems. ie... Instead of using good RAM like Corsair or GEIL,
> they use samsung ram or the equivalent. They usually use ASUS motherboards
> and buy them in bulk and have the BIOS HP- "proofed"
>
> They then jack up there prices to the hill! Its very unfair and
> have been ripping the consumer off since the beginning.
>
> BUT, there stock is good. HPQ is a total buy. Another example of
> how the stock is great, but the company blows! Hey, thats great
> for traders. I build my own PCs anyway........
But the irresponsibility of the SEC pales in comparison to the naivete of elected officials in Washington. Why in the world would they be lambasting an executive of SIPC for allegedly not doing their jobs by protecting investors. How could that moron congressman be appointed to a committee and not know that SIPC has absolutely nothing to do with 'protecting' brokerage customers?
I'd vote for Ron Paul in any election
I DISAGREE WITH THIS CALL HOWEVER IT HELPS CRAMERS FOLLOWERS WHO SHORT HIS SUGGESTIONS AND MOSTLY ALWAYS PUTS MONEY IN THEIR POCKETS.
GENERAL ELECTRIC IS A BIG CONGLOMERATE, WELL KNOWN, DIVERSE IN MANY BUSINESSES, BUT WHEN FOX NEWS BEGAN ITS REPORTING THAT THIS COMPANY WAS DOING BUSINESS WITH IRAN, THE STOCK DECLINED WITHIN 6 MONTHS AND SET NEW LOWS RECENTLY.
NOW AS OF LAST NIGHT MR.O'REILLY BEGAN REPORTING THAT HPQ MAY BE DOING BUSINESS WITH IRAN THROUGH A DUBAI REPRESENTATIVE. FURTHER INVESTIGATION IS ONGOING.
DOES THIS SOUND FAMILIAR?
AND WHILE WE ARE IN AN UNSTABLE MARKET, MORE UNREST, POTENTIAL NEW BANK FAILURES, BAD EARNINGS REPORTS UPCOMING THIS YEAR, AND A CREDIT CRISIS, LOGICALLY IT MAY BE (HPQ) IS THE BEST TECH STOCK BUT NOT AN ALL IN SITUATION BUYING WITH BOTH FEISTS EITHER.
BECAUSE AHEAD OF THE CURVE, I SEE A NEW TESTING OF THE DOW LOWS BEFORE THE ALL CLEAR BUTTON IS PUSHED!
SO AS AN INVESTORS POINT OF VIEW, I CAN'T SEE 'HPQ' AS THE BEST TECH PLAY FOR 2009 AS MR.CRAMER STATES!