Cramer's Stop Trading! Follow Paulson into Citi (8/27/09)

Stocks discussed on Jim Cramer's Stop Trading! TV segment, Thursday August 27.

Ultra Petroleum (UPL), Clean Energy Fuels (CLNE), AIG (AIG), Boeing (BA), Honeywell (HON), Citigroup (C), AIG (AIG), Precision Castparts (PCP), Alcoa (AA)

Natural gas futures may sit at a mere $3, but Cramer thinks that figure could rise to $5 or $6 if the government subsidizes the fuel. After speaking with Ultra Petroleum CEO Michael Waterford, Cramer thinks it seems more likely that government vehicles are going to be fueled mainly by natural gas, and that the trend will spread into the private sector. He noted Clean Energy Fuels was up over 17% on Thursday.

Cramer sees fund manager John Paulson's purchase of Citigroup shares as a sign that the mortgage market is improving. Paulson has shorted mortgages in the past, and it is no secret that Citigroup has its share of bad loans. However, Cramer takes Paulson's bullishness on the stocks seriously and noted the stock's 9% climb on Thursday.

AIG's 31% rise in share price was mainly due to a short squeeze, but the CEO's refusal to sell assets on the cheap was also a contributing factor.

Although Boeing's Dreamliner has been long delayed, Cramer predicts it could be released before the year is out. In addition to Boeing, Honeywell, Alcoa and Precision Castparts will see a significant upside on the release; “These are companies that exist for Boeing to ship."

:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

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 TheStreet.com

Comments

[Liz:]

Cramer on Lehman, five days before it collapsed: "BUY! BUY! BUY!"

Cramer on Wachovia: "Well-run company. CEO is an honorable, decent man."


Anyone who still takes this idiot seriously DESERVES to take a bath.

Aug 29 01:59 PM

[ebworthen:]

P/E ratios at historic highs, meaning everything is overbought.

Paulson is buying Citi - and we don't know what the other side of his trade is.

Cramer missed the crash, and only said sell when the music had stopped. Now he is saying buy, at the peak of a 50% rally. The market is down ~ 20% from last year, and I'm at break even or a little ahead. I'd rather have that, than buy magic beans only to find that they grow thistle and hemlock.

Aug 29 02:00 PM

[ChomarRu:]

Cramer is the best stock commentator out there. He may not get every call right. But he gets a majority of his calls correct. If you do not want to jump into a particular stock call, you can still benefit by listening to Cramer's analysis on a particular stock. That way, you get a better understanding as to the inputs that may affect a stock's movement.

Aug 29 02:53 PM

[Mr. Real:]

This guy says "Buy", that guy says "Sell". Do your own research and listen to everyone and sort it out for yourself. Over the 130 year history of the DOW it has averaged 10% a year. If you're looking to get rich quick selll Amway, the stock market will always make you money over time when you're patient and unemotional about your investments, just ask Warren Buffet.

Aug 29 06:28 PM

[principle:]

Its funny to read the comments of people that short the market, people speculating bad poking fun of those speculating good.

P/E ratios is only one factor to look at. And how are they record highs???? You using a quarterly take on that, weekly? How much is a company worth, P/E is not the end all of value.

Aug 29 07:09 PM

[Obewan:]

When there is no E it is hard to caculate a PE. Wait until the dust settles in about 5 years

Aug 31 10:42 AM