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

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Includes: ACM, BJ, CAT, COST, FCX, HES, OXY, XOM
by: Miriam Metzinger

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

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