Jim Cramer's Mad Money In-Depth Stock Picks 7/20

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday July 20. Click on a stock ticker for more analysis:

Breaking the Bank Rules

In spite of what one might expect after 17 consecutive Fed rate hikes, banks are doing well, notes Cramer, who would "break the rule" of buying into a sector according to the business cycle, and would invest in a bank now. The banks are benefitting from stock buyback programs, the tightening of the bankruptcy laws, and the fact that they now rely more on fees than on interest. An additional benefit, says Cramer, is that right now, banks are cheap.

Homework vs. Tips: Amylin (AMLN)

Cramer says it is better to do homework on a stock than to rely on tips, even from "experts." He gives the example of a diabetic doctor who gave him some "top secret" information that Amylin's diabetes drug, Byetta, was causing weight loss. After further examination, Cramer discovered that this information was old news, and was mentioned in the first sentence of a Goldman Sachs research report. In addition, the drug has a catridge supply-restraint problem, faces competition from Merck and Novartis, and its sales are falling. Cramer recommends waiting for Amylin's report on Monday before buying the stock.

Defeating a Downgrade: VF (VFC)

Cramer notes that last week, Todd Slater, a research analyst at Lazard Capital, downgraded VF from a buy to a hold because of slowing consumer trends. Many would assume that he had some important information, since few would risk downgrading a stock so soon before its earnings report. However, Slater was wrong, and after his statements, VF beat estimates, climbing from its previous high of 22%. Cramer warns against placing too much faith in analysts, particularly if they are pushing a macro thesis without citing specific data about a company.

Interview with COO and President of VF (VFC), Eric Wiseman

Cramer asked Wiseman how VF manages to do so well with consumer trends slowing. "We're getting growth because we have great brands, and we know how they connect with consumers," answered Wiseman. He also notes that growth is good, the company has a variety of brands, and that 25% of its business is done overseas. "We have a broad footprint which allows us to manage some risk." Wiseman also mentioned that VF is on the lookout for acquisitions. Cramer commented that he is bullish on VF.

Special Guest: Missouri Republican Senator, Kit Bond

Cramer asked Senator Bond how he manages to be a Senator and to have enough time left to stay on top of the market. Senator Bond replied that he listens to Cramer's show and looks into the recommended stocks. He also gets information from Investor's Business Daily. Cramer asked if political considerations, such as the possibility of the Democrats taking over the House in November, affect his investment decisons. Bond answered,"The economy may not look so well. The job growth and the increase in the stock market has gotten a boost from 15% dividend and capital gains rates."

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