Cramer's Lightning Round - Trinity Missed the Train (3/24/09)

Stocks discussed on the lightning round session of Jim Cramer's Mad Money TV show, Tuesday March 24.

Bullish Calls:

McDonalds (MCD): "It is the ultimate weak dollar stock…I genuinely think that this is the level to pull the trigger of McDonald’s… I want you to buy 25% of your position here, and if it goes below $50 buy another 25%, all the way down to $45... you have got a winner."

Nordic American Tanker (NAT)

NYSE Euronext (NYX): "The dividend is safe."

Union Pacific Corp (UNP): "I say Union Pacific goes higher, I like that stock… I want to buy the stock."

BP (BP): "The stock is still at $41... I am pulling the trigger."

Bearish Calls

Rio Tinto (RTP): "Rio Tinto is one of the greatest mineral companies, but I don’t like the balance sheet, but I do like the management. I will pull the trigger on any pullback."

CBeyond (CBEY): "It is doing well, but the stock is expensive as all get out… I can’t recommend that stock."

Goodrich (GR): "I am not going to recommend that stock… it doesn’t have a high yield, there really isn’t that much to make me be interested enough in Goodrich to buy."

CME Group (CME): "Alright, CME I don’t like that group."

NYSE Euronext (NYX): "The dividend is safe."

Dryships (DRYS)

BB&T (BBT): "No, I think that BB&T has done a lot, and they did a lot of stuff that was out of their bailiwick and I can’t get behind it anymore…the balance sheet is not as good as I thought."

Manulife Financial Corporation (MFC): "I do not want you in that stock, I want you to sell it."

World Wrestling Entertainment (WWE): "I need growth in order to recommend a stock… and I think that stock does not have growth."

Trinity (TRN): "I am blown away by how bad Trinity has done."

Kraft (KFT): "Poorly managed. It should be a buy but they continue to execute incorrectly… they missed the train."

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Comments

[Dr A J:]

What does it mean,under bullish comment NYX the dividend is safe,under bearish comment ,the dividend is safe.

Mar 26 10:10 AM

[Michael Del...:]

AJ,

If a company's earnings have recently taken a hit, they may no longer have enough cash to pay the current dividend. Freeport McMoRan had a sharp reduction in sales and earnings last quarter, so they suspended their dividend ($0.00) in order to protect what cash they still had.

A rule of thumb: If the most recent earnings per share are at least twice the dividend, an argument could be made that the company will continue to be able to pay the current dividend.

However, it might be better to look at free cash flow and accumulated cash than to look at earnings.

Apr 01 07:26 PM