Cramer's Mad Money - The Bears Are Not Your Friends (12/3/09)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday December 3.

Ford (NYSE:F), Vornado Realty (NYSE:VNO), Simon Property Group (NYSE:SPG), Boston Properties (NYSE:BXP), Federal Realty Trust (NYSE:FRT)

Cramer says it's time to dispel misinformation spread by those who have a vested interest in keeping stocks down. Dire predictions that Cash for Clunkers would rob future sales from auto companies have been proven wrong by Ford's (F) healthy sales and with the extension on tax credit for homebuyers, housing will remain stable. Cramer notes how the bears have been relentless in their negative spin on housing and have been scaring the public with the theory of "shadow inventory" which Cramer thinks is fiction. In fact, the Mad Money host predicts a shortage rather than an excess of houses; Vornado Realty (VNO) and Simon Property Group (SPG) show that inventory is under control [Cramer said he actually prefers Boston Properties (BXP) and Federal Realty Trust (FRT) over Vornado and Simon Property.]

So why all the nasty rumors? Money managers need stocks to come down in the last days of trading before 2010, and they are looking for a cheap entry point. “The people pushing these negative stories in the face of positive facts,” Cramer said, “they are not your friends.”

AIG (NYSE:AIG), Royal Bank of Scotland (NYSE:RBS), Barclays (NYSE:BCS), Lloyds (NYSE:LYG), HSBC (HBC), ING (NYSE:ISP), AED (NYSE:AED)

Although the Dubai World fiasco enjoyed much press attention, the story of the European Banks' involvement in the crisis has not been fully told. British banks in particular committed "financial idiocy" by investing in Dubai World's fictitious islands. European banks also blundered copiously by buying bad U.S. mortgage paper and creating housing bubbles in their own countries. These banks also used AIG derivatives to mask their leverage, while the U.S. taxpayer is "paying for the sins" of these European banks.

Cramer advised viewers to avoid buying any European banks and cited Royal Bank of Scotland (RBS) and Lloyds (LYG) as "the worst," joined by Barclays (BCS) and HSBC (HBC) which are almost as bad as Lloyds and RBS, but showed "a bit more savvy" in their non-Dubai businesses. For investors who have a burning desire to buy European banks in spite of this warning, Cramer thinks the "best bets" are preferred shares of ING (ISP), and AED (AED).

Alliant Techsystems (NYSEARCA:ALT), Harris (NYSE:HRS), ManTech International (NASDAQ:MANT), Oshkosh (NYSE:OKS), American Science and Engineering (ASE), FLIR Systems (NASDAQ:FLIR), Fluor (NYSE:FLR), DynCorp (DCP)

Obama announced he will increase the number of troops in Afghanistan, and Cramer thinks Alliant Techsystems (ALT) is the best way to play this trend. The company makes bullets, which are always in demand, as well as aerospace and defense products. ALT recently reported a strong quarter, which will only be helped by the increase in troops, and was awarded a $105 million contract to supply the armed forces with non-standard ammunition.

Other plays on the increased deployment to Afghanistan include Harris (HRS), which controls 42% of the market in tactical radios. ManTech International (MANT) services mine-resistant vehicles such as those produced by Oshkosh (OKS), and since it is down 17% for the year, it still has room to run. Cramer says the same is not true for Oshkosh, which is "well-discovered." American Science and Engineering (ASE) and FLIR Systems (FLIR) are leaders of the explosives detectors and infrared technology sector. Fluor (FLR) has significant exposure in the northern half of Afghanistan while DynCorp (DCP) operates in the southern part of the country. Cramer thinks the $7.5 billion contract awarded to each company is a "much bigger deal" for DynCorp which, unlike Fluor, is a pure play military contractor.


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