Cramer's Mad Money - BMS=Buy My Stock (7/20/09)

Includes: BHP, BMS, CAT, CIT, ETN, FCX, RIO, X
by: Miriam Metzinger

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

Bemis (NYSE:BMS), Rio Tinto (RTP)

Packaging company Bemis might not yet be famous, but Cramer applauds Bemis for “the kind of predatory behavior we can’t get enough of on Mad Money.” Rio Tinto is struggling with debt and has to get rid of any non-core businesses not related to mining. Enter Bemis which just issued a secondary offering to buy Rio Tinto's packaging business for a mere $1.2 billion, a purchase that will give Bemis 23 packaging plants in the U.S, South America and New Zealand. The business, which generated $1.5 billion in revenues, will more than pay for itself, and will bring greater sales and more market share for Bemis. With only 2 of ten analysts rating Bemis as a buy, Cramer sees room for an uptick in stock price and thinks the ticker BMS stands for "Buy My Stock."

Freeport McMoRan (NYSE:FCX), Eaton (NYSE:ETN), BHP Billiton (NYSE:BHP), U.S. Steel (NYSE:X), Caterpillar (NYSE:CAT)

While it may be up to six months before industrial stocks are expected to recover, Cramer applauded the market trend of buying names like Freeport, Eaton, BHP Billiton, U.S. Steel and Caterpillar ahead of an economic upturn. The collapse of Lehman Brothers cast a shadow on the entire market last year and year-over-year compares are expected to be substantial. Additional stimulus spending is also expected to benefit the infrastructure sector. Cramer would join the crowd and buy these stocks "If you don't you might miss the move," warned Cramer.

H.H. Gregg (NYSE:HGG)

While the suggestion of H.H. Gregg stumped Cramer on lightning round, after doing some research, Cramer thinks the seventh largest appliance seller is a buy. The fall of Circuit City benefited H.H. Gregg, which is known for its customer service and same-day delivery. With housing hitting a bottom, H.H. Gregg will be the place consumers will go to buy needed items. H.H. Gregg also has plans to expand from 111 stores in the Midwest to 400 nationwide. Cramer thinks the stock is cheap with a multiple at 14 and a long-term growth rate of 17.6%. He would buy below the secondary offering price, since large investors are also buying the offering, and thinks insider buying is a good sign.

Why is the FDiC Failing CIT (NYSE:CIT)

While the FDIC did its best to rescue troubled banks, Cramer lays the blame squarely at the feet of FDIC Chairwoman Sheila Bair for letting CIT suffer when all it had to do was to guarantee the company's loans. CIT's clients are businesses that drive the economy, and while CEO Jeffrey Peek is on Cramer's Wall of Shame, the company recently has been a model of good behavior. Cramer also wonders why the government would want to throw $2.3 billion in TARP money away by letting CIT fail. Bair sat on CIT's application for guarantees in January and did nothing. Cramer challenged the Fed Chairwoman to appear on Mad Money and explain herself.


Seeking Alpha publishes a summary of Jim Cramer's stock picks every day including: Mad Money Recap, Lightning Round and his Stop Trading! Picks.

Get Cramer's Picks by email-- it's free and takes only a few seconds to sign up.

Seeking Alpha is not affiliated with Jim Cramer, CNBC or