Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday November 23.
Bullish on Amazon (AMZN)
Cramer thinks Amazon (AMZN) is among the "most misunderstood and underestimated" stocks, because The Street doesn't understand its business model. Amazon is not an online Borders (BGP); it's more like an online Wal-Mart (WMT), and has expanded beyond books and music to include other product categories. The mega-retailer is growing its business through profitable acquisitions like Zappos.com, and is sufficiently diversified; Cramer says its fortunes will not rise and fall with the failure or success of products like Kindle. Amazon focuses on increasing selection and minimizing inventory problems, and can offer merchandise in some cases at a lower price than can be found at Wal-Mart.
Internet commerce is not slowing down; e-commerce has grown 21% in the past year compared to a 5% uptick for traditional retail. Brick-and-mortar retailers are limited to where they can build stores, whereas Amazon's ability to expand is virtually limitless. While Amazon's P/E seems expensive at 38 compared to Target's (TGT) 12 and Wal-Mart's 13, Amazon's growth rate is 34%, which makes the multiple seem more reasonable. While the shorts try to talk down Amazon, they keep having to cover their positions - another sign that you can't keep a good stock like Amazon down.
CEO Interview: Herbjørn Hansson of Nordic American Tanker (NAT)
While many seem negative on Nordic American Tanker (NAT), prospects seem to be improving with rising shipping rates and new regulations in China that require double-hulled ships (Nordic American, unlike other shippers has no single-hulled ships in its fleet). Hansson says the new regulation is very good news for Nordic American, and notes that day rates for shipping have nearly doubled. He also pointed out the company has no debt and is adding a new ship to its fleet.
Special Guest: Gary Gensler
Former Commodity Futures Trading Commission Chairman Gary Gensler apologized for the mistakes he made during the Clinton Administration and blamed the deregulation measures taken during that time for the current financial crisis. "Looking back now," confessed Gensler, "we should have done more to help protect the American public." While the damage seems to have been done, there are still some steps that can be taken to rectify the situation, including bringing more transparency to the OTC derivatives market. Regulations and transparency would have prevented problems with credit-default swaps that nearly destroyed the banking system. "We need to do this," Gensler told Cramer, or history may repeat itself.
Housing Myths: Whirlpool (WHR), Black & Decker (BDK), Wells Fargo (WFC), Bank of America (BAC)
The bears had a comeback for Monday's better-than-expected home sales, claiming that "shadow inventory" would plague housing and drive prices back down. Cramer says this "shadow inventory" is not a threat since Federal regulators are not demanding that banks dump homes onto the open market. Cramer also pointed to a 10% increase in new home sales and various factors (such as the first-time homebuyer credit) that are keeping inventory down.
The naysayers have kept investors out of successful housing-related stocks, which have seen gains: Whirlpool (WHR), Black & Decker (BDK), Wells Fargo (WFC) Home Depot (HD) and Bank of America (BAC). Cramer thinks these stocks, particularly Whirlpool, are ready for “another big move up." While analysts think Whirlpool will gain $5.25 a share, Cramer would add a dollar to that estimate, given the 10% increase in home sales and the company's success in Latin America. Whirlpool, according to Cramer, is a $90 stock masquerading as a $71 stock.
::::::::::::::::::::::::::::::::::::::::::::::
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
