Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Wednesday July 12. Click on a stock ticker for more analysis:
Cramer notes that pricing power plays a role in whether a stock is up or down and lists some stocks which currently lack this leverage. AMD and INTC are engaged in a pricing war, which Cramer says is not good for anybody. Ford, GM, Gap and Dow are also having pricing difficulties, along with the entire telecom sector, including NT and LU.
Pricing Power: Equity Office Properties Trust (EOP), Vornado Realty Trust (NYSE:VNO), Boeing (NYSE:BA), Valero (NYSE:VLO), Air Products (NYSE:APD), Brush Engineered Materials (NYSE:BW), Genentech (Private:DNA), Celgene (NASDAQ:CELG), Lockheed Martin (NYSE:LMT), General Dynamics (NYSE:GD), Kirby (NYSE:KEX), BHP Billiton (NYSE:BHP), and EuroZinc Mining (NYSEARCA:EZM)
Cramer listed 10 sectors and their top stocks with pricing power.
1. Commercial Real Estate, Equity Office Properties Trust (EOP), and Vornado Realty Trust (VNO):
Cramer cites a Wall Street Journal article that identifies the New York office space as a hot commodity, and he likes these stocks in particular because there is little chance of a downside surprise.
2. Aerospace, Boeing (BA): Cramer refers to this sector as a "duopoly" of which Boeing has potential to dominate its failing competitor, Airbus. Once BA takes control, he predicts that it will raise prices.
3. Refining, Valero (VLO): Cramer identifies VLO as a "best-of-breed" stock which controls the market capacity at 95%. He doesn't see any major competition for VLO on the horizon.
4. Chemicals, Air Products (APD): This company owns half of the hydrogen market, says Cramer, and demand will not be falling.
5. Specialty Materials, Brush Engineered Materials (BW): This company has the same pricing power as a monopoly, says Cramer.
6. Biotech, Genentech (DNA) and Celgene (CELG): Cramer says that prices are high in this sector because of the development of cancer treatments.
7. Defense, Lockheed Martin (LMT) and General Dynamics (GD): "They can get away with ridiculous price increases since we are in the middle of a war," says Cramer.
8. Barges, Kirby(KEX)
9. Oil Rigs, Transocean (NYSE:RIG): There is a great demand for oil rigs, according to Cramer.
10. Minerals: BHP Billiton (BHP) and EuroZinc Mining (EZM)
CEO Interview: Jeff Zucker, NBC Universal
Cramer began the interview by asking his "boss" how the company can keep up with the internet, and Zucker resonded that NBC and CNBC is including more interactivity, and used Cramer's show as an example of how movement in this direction has met with success. When asked how Zucker balances network programming with cable, Zucker responded,""We love all our children the same." Cramer raised the possiblity of NBC making a move like Newscorp (NASDAQ:NWS), which has profited from acquiring MySpace. Zucker says that NBC has its eye on iVillage, which is the most popular site for women on the internet.
A caller asked Cramer if he was crazy for investing all of his money in India and China, and Cramer suggested limiting 10% to each country. He suggested TTM in India and LVS in China. Cramer touted JNJ to another caller, and commented that he's never seen the stock so cheap.
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