Cramer's Mad Money - Follow That Hedge Fund (5/20/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday May 20.

American Growth Fund of America (AGTHX), Google (GOOG), Oracle (ORCL), Cisco (CSCO), Apple (AAPL), Microsoft (MSFT)

It is worth following in the footsteps of the top hedge fund, American Growth Fund of America, which is outperforming other funds with its 9.5% gain. Its top holding is Google, a stock many feared would plunge because of falling advertising revenues. Google is actually profiting from the rapid transition from print to online advertising. Cramer said the internet giant is "the cheapest growth stock I know." Thirteen is a lucky number for Oracle, the fund's second largest holding; Oracle has a 13% growth rate and trades at 13 times earnings; Cramer thinks this position could grow. Cisco, the third largest holding is nine points off its high but has superb potential, and Cramer thinks it could reach $23 or $24. The fund also has Apple, a stock Cramer likes and Microsoft, the only holding he would avoid.

CEO Interview: Michael Linn: Linn Energy (LINE)

President Obama has not mentioned natural gas since he was elected, and Cramer asked Linn if this makes him nervous. Even without the lip service, natural gas will be a necessary bridge fuel as the nation makes the transition to alternative energy, said Linn. He added the company hedged its 2009 production at $80 to $100 a barrel oil prices, so Linn has been conservative and has significant protection in an uncertain environment. Michael Linn said he is not nervous about liquified natural gas imports and he sees no reason why the company would cut the dividend. Cramer says Linn is a buy.

Mad Mail: First Niagara (FNFG), Geron (GERN)

Cramer is bullish on First Niagara because it is raising money for acquisitions and he thinks the bank could triple in size. He would buy on any dip. On the other hand, Cramer says Geron is too speculative.

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Comments

[Todd Walker:]

I think you meant to say that the American Growth Fund of America is one of the largest mutual funds, not hedge funds.

May 28 11:29 PM