Cramer's Stop Trading! Oil Is Bottoming (3/4/09)

Stocks discussed on Jim Cramer's Stop Trading! TV program, Wednesday March 4.

Occidental Petroleum (OXY), Hess (HES), Exxon (XOM), Freeport McMoRan (FCX), Caterpillar (CAT), Costco (COST), BJ Wholesale (BJ), AECOM Technology (ACM)

Cramer thinks oil is bottoming, and with capital expenditures down and demand rising in China, he predicts, “most of these companies are going to make a lot of money,” as long as oil remains in the $40s. His picks in the sector include Occidental Petroleum, Hess and Exxon.

Lower copper inventories on the London Mercantile Exchange are a sign that China’s stimulus plan is creating more demand. Cramer likes Freeport, which is up 100% after reducing its dividend, and is going higher. He thinks other companies in the sector are going to follow Freeport’s lead. While he thinks Caterpillar’s rally was a short-covering, Obama’s stimulus plan might also benefit the stock.

Cramer thinks BJ’s Wholesale is stronger thank Costco, since the latter has taken the risk of diversifying into electronics and jewelry while BJ’s has stuck with consumer staples.

Aecom’s secondary offering is a sign of confidence, according to Cramer, noting those who bought were up $1 on Wednesday. Cramer thinks this is an “extraordinary signal” of rising demand.

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Comments

[AndrewBaker:]

Yes, oil may be bottoming, but who is to say how long before that happens? This is a long and bad depression, and buying in now could see your stake drop a lot more before it starts to rise. I'm sitting this out for now (or going short!)

Mar 05 03:48 PM

[sparky5:]

Cramer has no credibility with me. He is known for pump and dump activities in the past and even more telling, is part of the Muppetts cheerleading section at CNBC. That network is famous for its delusionally positive outlook towards the economy. Their refusal to address the governments massive, blatant and illegal precious metals market manipulation is irresponsible at best. The manipulation is costing ALL investors trillions of dollars because it is DISTORTING gold and silver's true value is causing investors to put money in the wrong places.
The money the investors are losing is getting stuffed into the pockets of JP Morgan, Goldman, etc. as an invisible tax on top of the coming increases in other taxes and the loss of value caused by the rampant inflation which is coming as soon as the first FED acknowledges their bond auctions are failing and are having to buy their own bonds to keep them from collapsing.
Every Gov't statistic related to the markets or economy is a fraud. Trust nothing you hear or see.

Mar 06 10:55 AM

[bassmaster17:]

The big rage in oil now is recovery and enhancing that process...what does this mean...proven reserves are dwindling while global populations are rising. The weak dollar will be inconsequential to oil's eventual surge. Does congress have any idea, why not drill, why tax our oil companies when they have the ability to reduce our dependence on foreign oil. Obama is more concerned about his hoop game and degrading mentally disabled people than facing this threat. It was nice to see him on Leno when Russia was selling missile systems to Iran.

Mar 20 11:45 PM