Jim Cramer's In-Depth Stock Picks and Comments, Aug.8

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Tuesday August 8. Click on a stock ticker for more analysis:

Dot. Com Clearance: eBay (EBAY), Amazon.com (AMZN), Time Warner (TWX), Yahoo! (YHOO)

Cramer says it is time to clear out those dot.coms that aren't making money. First, eBay should be given the boot for making the poor decision to acquire Skype, a company that is not profitable, according to Cramer. Amazon, which sells as 60 times earnings, should also be swept out, says Cramer, who observes that CEO Jeff Bezos has made his profit and doesn't seem to care about the company. AOL, owned by TWX, is full of pop-up ads, says Cramer, and is making a mistake by not charging for its service. Cramer is giving Yahoo! one more quarter to get its act together before throwing it overboard.

Dot.Com Kings: Blue Nile (NILE), ValueClick (VCLK), IAC/InterActive (IACI)

Cramer likes Blue Nile, the largest online jeweler, because, as a custom-designer, it has no inventory. NILE also reported a great quarter and bought back 8% of its stock. Cramer believes that IACI will be the biggest internet story of 2007, and has brought in CEO Doug Lebda, who is more popular with analysts than his predecessor, Barry Diller. IACI owns Ask.com, Ticketmaster, Match.com, and a Home Shopping Network, which are all performing well. IACI also owns a large real estate business which will turn around when the Fed stops raising rates. Cramer says this stock is the dot.com king, and suggests picking it up while it is cheap and not yet popular.

Merck (MRK) Perks

Although many people don't like Big Pharma, Cramer declares that MRK is in the House of Pleasure, especially since its Vioxx triumphed over legal difficulties, and the new CEO, Richard Clark, is promoting MRK as a lifesaving business. MRK has a great cholesterol drug, and is reaping the benefits of Medicare Part D.

CEO Interview: Timothy Guertin, Varian Medical Systems (VAR)

Guertin explained VAR's oncology and medical businesses, pointing out that that its oncology division makes every kind of hardware and software for radiology, is the largest producer of X-Ray tubes and makes machines which can X-Ray large devices. Cramer asked Guertin if the two businesses could be more efficiently run if they were separate, and he responded that together they benefit from sharing technology. Cramer likes VAR, which, along with Walgreen (WAG) and Kellogg (K) is a good stock for a slowdown.

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Comments

[Rick Williams:]

I side with Mr. Cramer on some of the “dot coms” and against Mr. Miller of Legg Mason.

Concerning Mr. Miller’s statements on his “Legg Mason Value Trust Portfolio”:

1. Where a “Value Trust” is concerned, capital preservation with dividends comes first, and then capital appreciation.
2. It seems that Mr. Miller’s team missed the market with several “dot coms” as well as other sectors and is now playing catch up - with other peoples money.
3. In total, Mr. Miller’s statement feels like a carefully crafted apology. No one gets it right all of the time, however clients pay Legg Mason to do better. If that means unloading dot dogs in favor of undervalued, dividend paying companies - then so be it.
4. I encourage fund managers to include independent assessments of “customer satisfaction” in their stock selection criteria and publish this data in a column along side each individual position they hold. Again, I point to: www.cfigroup.com/resou...

Rick Williams

2006 Aug 09 07:53 AM

[Rick Williams:]

In that Seeking Alfa will not post rebuttles from readers, on "Analyst Ratings" please copy and paste the following URL into a browser:

moneycentral.msn.com/c...;BoardId=562&B...

2006 Aug 09 10:51 AM