Cramer says that Merill Lynch produced "the absolute worst piece of research of the month" by downgrading HAL. When an analyst puts down a stock for bad reasons, explains Cramer, it is a good investment, and he gives HAL a "buy to the ninth power."
The Lap of Luxury: Coach (COH), Polo Ralph Lauren (RL), Tiffany & Co. (TIF), Four Seasons Hotel (FS), Orient Express Hotels (OEH), Harman International Industries (HAR), Nordstrom (JWN), Diageo (DEO), Toll Brothers (TOL), Wynn Resorts (WYNN), Movado (MOV) and Ruth's Chris Steak House (RUTH)
Cramer has created a special "luxury index," and notes that high-end consumers buy these products even in downturn, but a decline in these companies may signal a recession. Overall, the index is at 96 with a 100 benchmark; WYNN a bit costly and TOL is down. Cramer says that this index warns of some pain ahead.
CEO Interview Jim Jenness, Kellogg (K)
Cramer commented on the fact that K's performance was below analysts' predictions. Jenness replied that the company could absorb cost increases, and added that K is focused on long-term growth and not merely on meeting quarterly estimates.
Before "Better than Expected": Valero (VAL)
Cramer is tired of hearing the phrase "better than expected" about a stock he doesn't own, so he suggests picking up VAL as a stock which will confound lackluster predictions. He obtained some of this information from listening to a Concophilips (COP) conference call (COP is the third largest refinery and VAL is the biggest). Although VAL predicted great earnings, analysts were skeptical, because no new refineries are being built. Cramer predicts that these analysts will be amazed when VAL reports its earnings.
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