Cramer's Mad Money - Is Wal-Mart a Speculative Stock? (3/6/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday April 3.

Speculation Friday: Wal-Mart (WMT)

Who would have thought that retail giant Wal-Mart could be a speculative stock? However, Obama's proposed legislation, the Employee Free Choice Act, which makes it harder for employers to prevent employees from forming unions could threaten Wal-Mart, which has been profiting from the lack of regulation in this area. The high cost of unionized labor will deal a harsh blow to Wal-Mart, and Cramer was critical of Obama's plan to implement such reforms while the economy is still struggling. For this reason, he predicts the Employee Free Choice Act will be defeated, and it is worth speculating on Wal-Mart.

Believe the Rally: Celgene (CELG)

The skeptics say 24% jump in the market was due to short covering, but Cramer thinks the rally is real and has more permanent bullish reasons behind it. He believes housing is bottoming and the reforms of the Federal Reserve are creating conditions for recovery. Cramer would not buy stocks now, since many are up as much as 50%, but would consider buying solid names such as Celgene on a pullback; "The easy money's already been made," said Cramer, "but that doesn't mean we're not still going higher."

Pepsi (PEP), Coke (KO)

The war between Pepsi and Coke over market share has finally been won...by Pepsi. The two were duking it out when commodity prices were high, and now that raw costs and gas prices have stabilized the skirmishing has stopped. Cramer points to the strength of Pepsi's Frito Lay brands and increasing sales at convenience stores. The stock is trading at 14 times earnings and at a 27% discount to historical levels. Cramer thinks the stock should be trading at a premium and is headed higher.

Mad Mail: Sears Holdings (SHLD), Terex (TEX), Caterpillar (CAT)

Cramer has started recommending Sears again on the strength of its CEO, Eddie Lampert. Caterpillar is a better infrastructure play than Terex, according to Cramer.

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Comments

[madmilker:]

People in America need to realize jus what got America in this shape…”cheap” yes so-call cheap items from a foreign land.

quote*Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. *end quote!

Now! if there be 182 country’s making items for the world to buy and they have only 5% of the pie in China…duh! This company makes the nice people of China support their currency(yuan) by keeping it in their country working for the people there…. but with the “yuan” going up in value and the US dollar going down…all the foreign items that the American consumer buys thinking it is cheap has went up in price.

People…its all about the currency and to keep a currency strong you got to keep it floating around the country you live in so it can work for you. For the past 12 years all them US dollars are being shipped overseas to a foreign bank and with the American worker not making anything for the foreigner to buy the “we the people” have to turn to the “second” largest employer in America(Uncle Sam) to sell “we the people” debt in order to get all them dollars back!

50 years ago a foreigner would had given their left nut for a US dollar or a Hershey’s chocolate bar and today the same foreigner has got Uncle Sam and the American consumer by both all the while Hershey is moving the chocolate factory to Mexico. Wake up! America and think “MADE IN AMERICA.”

Apr 06 12:06 PM