Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday February 4.
Pick a Winner: Research in Motion (RIMM), Apple (AAPL) , Palm (PALM), Nokia (NOK), Motorola (MOT), Clorox (CLX), Colgate-Palmolive (CL), Goldman Sachs (GS), Bank of America (BAC), Citigroup (C), UBS (UBS), Abbott Labs (ABT), Wyeth (WYE), Pfizer (PFE)
With the uncertainty surrounding specific stocks, investors might be tempted to flock to ETFs. But that would be a mistake, said Cramer, who suggested looking to CEOs rather than ETFs. The companies that have strong management and execute consistently are the best investments. Topping Cramer’s list are: Research in Motion, Apple and Palm, a group that leaves Nokia and Motorola in the dust. Clorox and Colgate-Palmolive delivered strong quarters and are taking market share. Goldman Sachs is ready to pay off its TARP money and Morgan Stanley is changing its business model to pure brokerage; Citigroup and Bank of America, on the other hand, are struggling for survival, and UBS is losing its way with a vague business model. Abbott Labs is performing well with its new heart stent, but Pfizer thinks that all of its problems will be solved by buying Wyeth. The reason the Dow was down on Wednesday was due to the poor performers. If investors stick with winners, they don’t need to rely on an ETF.
It would be reasonable to assume that companies like Allergan, famous for its Botox product, stomach bands and breast implants, would suffer in a recession. However, Allergan beat estimates by 3 cents and is proving that theory wrong. The truth is, Allergan is only 30% cosmetics; eye treatments brought Allergan 46% of revenues in 2008. While a strong dollar might hurt business, Allergan expects to grow by 5.6% in 2009, and the company is flush with cash. Allergan has six products under review by the FDA. Pyott says that while the lap band business is slowing from 60% to 20% growth, the company is holding its own against competitors like Johnson & Johnson and is offering Botox and Juviderm coupons to compete with Medicis. Cramer called Allergan “Pfizer with growth.”
Mary Schapiro: Ban UltraShort Financials ProShares ETF (SKF)
Cramer made an appeal to the new SEC Chairwoman Mary Schapiro to ban UltraShort Financials Proshares ETF, which doubles the impact of a regular short position. Cramer has long been a critic of short-sellers demolishing stock values, and showed that the ETF doesn’t even benefit the short-sellers themselves. Cramer warned the SKF “Is a double-whammy against you.” If the ETF were a drug, the FDA would ban it, said Cramer. The only ones who benefit are those who want to destroy financials; “It is a manipulator’s dream come true.”
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