Cramer's Mad Money - Which Stocks Are up 3,000%? (10/8/09)

Stocks discussed on the Mad Money session of Jim Cramer's Mad Money TV Program, Thursday October 8.

Avis (CAR), Dollar Thrifty (DTG)

Cramer hasn't liked the rental car business, and for good reason, since these companies don't make money renting cars. However, Avis is up 3,000%, Dollar Thrifty has surpassed this figure with 3,100% and Hertz trails at a still impressive 300% gain. With fewer vacations and car rentals, how are these companies making so much money? Answer: they are selling older autos in their fleets and cashing in on the growing used car business. With fewer people buying new cars and Cash for Clunkers taking old cars out of commission, demand for used cars has grown.

Of the three, Hertz is the stock Cramer would buy, not only because it has risen less, but with ownership of 70% of its fleet, Hertz has the most cars to sell. Cramer would stay away from Avis and Dollar Thrifty; the latter has the least cars to sell.

Target (TGT), Ross Stores (ROST), Coach (COH)

The retail numbers were a "grand slam" according to Cramer. So why is the media being cautious? "Because no one on Wall Street admits when they're wrong," he said. "There's more accountability in sports, he said, than there is with your money." All 13 retailers Cramer followed reported better than expected numbers and many are at their 52-week highs. This was true across the board, from low-end Ross Stores to high-end Coach, and even Target's strong numbers failed to impress the media. Cramer would ignore the news and stick with the numbers.

Nucor (NUE) CEO Dan Dimicco

Dan Dimicco is on a crusade about the threat of a jobless recovery. He produced charts of the last five recessions to prove that recoveries have unfolded more slowly with each recession because employment has lagged behind. This time, the number of jobs lost is "off the charts" and he thinks the top three priorities should be Jobs, jobs and jobs. Healthcare and cap and trade can wait, and Dimicco suggest the U.S. rely only on its oil reserves and natural gas for fuel, a move that will create thousands of jobs.

Wells Fargo (WFC) Conflict

Cramer discussed the conflicting analysis of Wells Fargo: Goldman Sachs upgraded the stock with a price target of $35 and UBS downgraded Wells Fargo with a target of $20. The bone of contention is over Wells Fargo's earnings. UBS sees substantial loan losses for the bank, and the need to issue more shares to repay TARP. However, Goldman thinks the loan losses will be contained and that Wells Fargo's loan portfolio may actually appreciate. Cramer sides with Goldman and thinks that Wells Fargo's loans are worth more than their book value and doesn't think it will need to issue more shares.

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Comments

[123andy:]

I watched the interview with Dan Dimicco. The ,man said all the right generic things, but when Cramer pressed him for specific ideas he just repeated the generic stuff. Cramer was somewhat frustrated. If this is an indication of how Dimicco runs his company and leads his organization avoif the stock of Nucor. It is sure to fail.

Oct 09 10:42 AM