Cramer's Mad Money - Happy Gridlock Days Are Here Again (1/19/10)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday January 19.

Gridlock Is Back

Cramer says regardless of whether a Republican or a Democrat sits in the White House, the markets like nothing better than gridlock, which stalls legislative reforms that might be bad for stocks. The Republican victory for the Massachusetts Senate seat vacated by the late Senator Edward Kennedy has wrecked the Democrats' majority in the Senate and made Healthcare reforms, the passage of Cap and Trade emissions reform and the Employee Free Choice Act more fraught with difficulties and the threat of filibusters. Cramer welcomes the new era of political stagnation; “Gridlock is what gave us those fantastic rallies during the Clinton years,” Cramer said, and “maybe it’s coming back.”

When Will Intel Move? Intel (NASDAQ:INTC), AMD (NYSE:AMD)

While Cramer calls Intel (INTC) "the best semiconductor play on Earth," it seems puzzling that the stock has yet to rally on the strong quarter it reported on Thursday. Intel is still down. The stock's range has been between $18.50 and $21, and Intel ran over the higher number as the quarter approached. The reason the stock didn't rise higher may be because of a slow day or investors selling on the idea that Intel may be stuck. However, the stock shows signs of moving as it keeps reaching lower lows; this is a technical sign of increasing interest in a stock. While for speculation, Cramer prefers AMD (AMD), Intel trades at an historically low multiple of 12 and has a respectable 3% dividend yield. “I like the stock so much,” Cramer said, “that right now I want to make it the largest position for my charitable trust if it goes below $20. That’s the strongest endorsement I can possibly give.”

Smart Plays on the Smart Grid: Itron (NASDAQ:ITRI), Cooper Industries (CBE), Televent GIT (NASDAQ:TLVT)

With predictions of energy shortages, it seems to make the most sense to buy oil stocks, but an even better play, according to Cramer, are companies that produce or benefit from smart grid technology, which allows utilities to manage the distribution of electricity through two-way digital technology. The smart grid eliminates wasted energy, lowers bills, and could reduce peak energy demand in the U.S. by 7%. Cramer recommended Itron (ITRI) in October and after a 22% rise in the stock price, he found a better play, Cooper Industries (CBE) which is also a play on the economic turnaround. There is a question whether this highly diversified company has enough exposure to the smart grid to benefit sufficiently. Management commented that the smart grid has been a part of the company's growth since "before the term was coined," 21% of the company's revenues are derived from utilities and the company plans to make acquisitons to increase its exposure to smart grid technology.

For a more speculative smart grid play, Cramer's pick is Televent GIT (TLVT), which upgrades grids with smart metering infrastructures and technology that allows remote connection to meters. Televent GIT produces more than smart meters, and also monitors the distribution of power through Supervisory Control and Data Systems. While only 20% of Televent's sales are connected with the smart grid, this number should increase dramatically, and the company is diversified with oil and gas delivery and weather monitoring systems for farmers.

“This is a one stop shop for everything that’s going to be the future,” Cramer said.


Seeking Alpha publishes a summary of Jim Cramer's stock picks every day including: Mad Money Recap, Lightning Round and his Stop Trading! Picks.

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