Cramer's Stop Trading! Caterpillar, Enough Already (8/4/09)

Stocks discussed on Jim Cramer's Stop Trading! TV segment, Tuesday August 4.

Federal Realty (FRT), Boston Properties (BXP), Brandywine Realty (BDN), Caterpillar (CAT)

While the media insists commercial real estate is falling apart, Cramer noted strong performance from Federal Realty, Boston Property and Brandywine Realty; "This market is on fire," he said.

The media is also wrong about the dearth of IPOs, according to Cramer; inside sources indicate there are plenty of IPOs in the pipeline. "The papers are wrong about IPOs and the papers are wrong about commercial real estate," he said.

Cramer thinks the earnings per share range of $2.50 to $10 given by Caterpillar is "too hard." He added that, after bidding up the stock on the same thesis for 18 straight points, investors ought to say "enough already."

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Comments

[Mad Hedge F...:]

Go CAT. Another great “tell” stock for me is Caterpillar (CAT). I have never owned CAT in my life, but have always followed the company closely because it speaks volumes about the state of the world economy, and because they used to hand out those neat yellow hats at the analyst meetings. CEO, Jim Owens, says that only painful job cuts held the decline in earnings to 66% on a 41% fall in revenues, with the emphasis on the word “earnings” in the most severe conditions since the thirties. The news was good enough to take the stock up a whopping 40% in a week. CAT gets 61% of its revenues from abroad. Business in Western Europe and Japan is worse than in the US, and what strength they are seeing is in Asia, with China up 8%. Large customers are seeing a resumption of credit lines, while smaller and medium sized ones are not. Owens sees a turnaround beginning in Q4, and a full scale recovery beginning next year, as the cyclicality of its major customers in construction, mining, and energy kicks in to the upside. Longer term, Owens sees CAT’s future in the ongoing infrastructure build out in the emerging markets. Hey, didn’t FCX just tell us that? Is there a trend going on here?

Aug 05 11:10 AM

[jimmy46:]

For the first time I agree with cramer,

I follow a number of REIT's,

COMMERCIAL REAL ESTATE WAS NEVER OVERBUILT LIKE RESIDENTIAL.

REIT's ARE MAINTAINING THEIR OCCUPANCY RATE.

NEW LEASES AND RENEWALS ARE ALMOST ALWAYS AT A HIGHER RENT THAN THE EXPIRING LEASE.

Aug 05 01:14 PM