Cramer's Stop Trading! Toll Brothers' Sign of Stabilization (11/11/09)

Stocks discussed on Jim Cramer's Stop Trading! TV Segment, Wednesday November 11.

Toll Brothers (TOL), Bank of America (BAC), Wells Fargo (WFC), Ormat Technologies (ORA), Kimberly Clark (KMB)

On Toll Brothers' conference call, Cramer noticed the low rate of cancellations; "Given the fact that the cancellations are very low for Toll, that means there's a lot of available mortgage money," said Cramer. "The mortgage rates are low." The cancellation rate of 6% is at the same level it was during the 2005 housing boom. Cramer sees this as yet another "sign of stabilization" and is good news for Wells Fargo (WFC) and Bank of America (BAC).

Solar company Ormat Technologies (ORA) has always been at the top of the field, but has lacked a partner. Cramer says the only equivalent for Ormat is First Solar (FSLR) which has been hurt by subsidy cuts in Europe. Cramer is bullish on Ormat, which is well off its high and should rise higher along with oil.

Finally, Cramer said he likes Kimberly Clark (KMB) which has a 3.7% yield, because it is a weak dollar play.

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Comments

[H.J. Huneycutt]

I'm not sure how Ormat (ORA) has "always been at the top of the field" in solar, when they only jumped into solar about one month ago. For that matter, they are not even comparable to First Solar (FSLR), which is a solar panel manufacturer. ORA is a geothermal energy operator that appears to be looking for opportunities to operate solar energy systems.

All the same, it's a very well run company that will grow significantly over the next decade, so I have no gripe with Cramer's pick. Just curious about the logic here.

2009 Nov 12 10:59 AM