Cramer's Stop Trading! The Oils Fall Down (1/9/09)

 |  Includes: COH, CVX, HAL, JCG, KBH, MHS, RIG, SLB
by: Miriam Metzinger

Stocks discussed on Jim Cramer's Stop Trading! TV program, Friday January 9.

The Oils Fall Down: Halliburton (NYSE:HAL), Schlumberger (NYSE:SLB), Transocean (NYSE:RIG), J.Crew (JCG), Coach (NYSE:COH), CVS Caremark (NYSE:CVX), MedcoHealth Solutions (NYSE:MHS), KB Home (NYSE:KBH)

Even with colder temperatures, oil will continue to go down and stocks in the sector should be sold, according to Cramer. “Haliburton and Schlumberger don’t lay off people because business is good.” Even drillers, which are doing better than the rest of the sector, are going to get worse. Cramer would even sell Transocean.

Retail also looks pretty negative, and the decline in J.Crew and Coach is “a most worrisome sign.” Coach’s same-store sales were “awful,” and poor performance in these names is a sign that the wealthy are still trading down; “These stocks somehow are not done going down,” Cramer said.

There is a ray of home in KB Home. Those who wondered why the stock saw a lift on Friday need only listen to the fourth-quarter conference call during which the company discussed its worst markets rebounding and increasing housing sales aided by affordable prices and low interest rates. While Cramer says KB Home’s story is positive, its balance sheet is not clean enough yet to make it a buy.

Cramer agrees with Doug Kass that Caremark’s problem is that MedcoHealth is taking market share and not that its business is too tough. Cramer would buy MedcoHealth.

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