Cramer's Mad Money - The Next Fleet Bank (10/1/09)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday October 1.

The Next Fleet Bank: First Niagara (NASDAQ:FNFG) CEO John Koelmel

Cramer recalls 1991, when the savings&loan crisis left small, weak banks reeling, and strong regional banks were able to purchase the assets from these failing institutions on the cheap. Fleet Bank arose as a major force from this Darwinesque scenario, and Cramer thinks history might repeat itself with First Niagara on top. The bank has a solid 4.4% dividend "is a much-overlooked bank,” Cramer said, “and I think you need to sit up and take notice.”

CEO John Koelmel said the bank is poised to make acquisitions, and is strengthening its balance sheet, refinancing its debt and raising capital. He expressed a firm commitment to maintaining the First Niagra's current dividend.

Wal-Mart (NYSE:WMT), Apple (NASDAQ:AAPL), Jabil Circuit (NYSE:JBL), Procter&Gamble (NYSE:PG), Wynn Resorts (NASDAQ:WYNN), Freeport McMoRan (NYSE:FCX), Vale (NYSE:VALE), BHP Billiton (NYSE:BHP)

The U.S. could learn something from China, especially since its allegedly Communist government is making very capitalist decisions, like focusing on creating jobs. The White House is so preoccupied with healthcare and cap and trade that businesses are nervous and are afraid to hire, because employees might become more expensive. Retail giant Wal-Mart seems to like the reduced overhead a streamlined workforce creates, and doesn't seem to be motivated to increase hiring; “they have great monthly data – they know more than we do.”

While a poor jobs number on Friday does not necessarily mean a Black October, there will be more corrections if employment doesn't improve. In the meantime, Cramer suggests buying stocks that are levered to China: Procter&Gamble with 58% international exposure, Wynn Resorts with business in Macau, Freeport McMoRan, Vale and BHP Billiton. Apple, Jabil Circuit and other solid tech stocks are being driven by international demand.

Brandywine (NYSE:BDN), Boston Properties (NYSE:BXP), iShares Dow Jones US Real Estate (NYSEARCA:IYR), Developers Diversified (NYSE:DDR), Kite Realty Group (NYSE:KRG), Duke Realty (NYSE:DRE), AMB Properties (NYSE:AMB), Post Properties (NYSE:PPS)

Analysts and the press are predicting commercial real estate will be the next sector to collapse; the reasoning is that since residential real estate has done a nose dive, commercial and retail real estate will be next. Cramer is more optimistic, and points to profitable secondary offerings from Brandywine and Boston Properties, but he is loath to go against the grain if these stocks get hammered. The one commercial real estate play to own is the ETF IYR, “the most liquid play, and the best way to track the real estate investment trust group.”

The REITs with the worst charts and fundamentals are: Developers Diversified, Kite Realty Group, Duke Realty, AMB Properties and Post Properties.

SBA Communications (NASDAQ:SBAC) CEO Jeff Stoops

With market corrections increasing, Cramer urged investors to look for long-term, multi-year growth plays. He has been recommending the wireless internet group and discussed SBA Communciations, which builds towers to remedy the data clogging that impedes the transfer of information.

CEO Jeff Stoops remarked that since smart phones and netbooks are in their infancy, demand for towers will only increase. He intends to grow the company by building new and improving existing towers and the recent debt offering was designed to give SBA liquidity. With Obama's vision of expanding broadband into rural areas, SBA has ample room to expand.


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