Cramer's Mad Money - Meredith Whitney Surrenders (7/13/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday July 13.

Meredith Whitney: Goldman Sachs (GS), Bank of America (BAC)

Cramer gave Meredith Whitney the credit for the Dow's 186 point rise on Monday, not because of her bullish call on Goldman Sachs, but because she had been staunchly bearish for so long. When a prominent bear like Whitney sings a different tune, that is enough to make stocks jump.

However, Cramer doesn't think this is an isolated event; he believes Whitney actually declared defeat for the bears. The doom and gloom scenarios painted by the media were overblown; the 50% foreclosure rate on the 7 million homes sold between 2005 and 2007 is a worst-case scenario and not a certainty, according to Cramer who adds that many of these losses have already been priced in. "You never know when the bear on the other side of the trade is as exhausted as you are," he said.

The Next Bull Market: W.R. Grace (GRA)

Cramer is always looking for a bull market somewhere, even in the most obscure places. Companies threatened with bankruptcy because of asbestos claims have demonstrated strength in recovery and W.R. Grace is no exception. The company will have its bankruptcy claims settled by September, with its common stock intact and will raise capital through warrants and not equity. W.R. Grace continues to take market share, and although its protective paints and coatings are not selling so well domestically, that business has 48% international exposure. Cramer cautioned that W.R Grace is a speculative stock, so it is important to do research, wait for a pullback and use limit orders when buying.

A New Frontier (FTR) with CEO and President Maggie Wildetrotter

With Verizon exchanging 4.8 million of its landlines for $5.5 billion of Frontier's stock and $3.3 billion of its debt, Frontier will triple its size and become the largest rural communications provider in the U.S. The company expects to save $500 million. Wildertrotter says Frontier understands these markets much better than the competition. Frontier has been successful in creating innovative offers and delivers value to customers. Cramer is bullish on Frontier, but only after Verizon holders who want to get rid of Frontier shares have already sold.

Mad Mail: AT&T (T)

Cramer says he feels good about AT&T's dividend and reminded a viewer to keep a diversified portfolio. He also spoke against manipulation of oil prices.

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Comments

[AndrewBaker:]

The rampers have it at the moment but reality always outs in the end: buy into this rally and lose even more when this house of cards tumbles.

Jul 14 12:31 PM