Cramer's Mad Money - China's Year of the Bear (1/27/10)

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 |  Includes: BTUUQ, BUCY, CAG, CAT, CLX, ETN, F, FCX, JOY, KMB, MCD, NUE, SWKS, UTX, VALE
by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday January 27.

Copper Industries (CBE), Ford Motor (NYSE:F), Caterpillar (NYSE:CAT), United Technology (NYSE:UTX), Vale (NYSE:VALE), Joy Global (JOYG), Bucyrus (NASDAQ:BUCY), Peabody Energy (BTU), Freeport McMoRan (NYSE:FCX), Kimberly Clark (NYSE:KMB), ConAgra (NYSE:CAG), Clorox (NYSE:CLX), McDonald's (NYSE:MCD),

China is no longer a safe haven for companies escaping the domestic economic slowdown; now China is restricting lending to prevent a bubble in its economy. Cyclicals such as Caterpillar (CAT), United Technologies (UTX), Vale (VALE), Joy Global (JOYG) and Bucyrus (BUCY), some of which have risen to the triple digits on the China boom might well see a bust in their stock prices. Of the group, Cramer is especially worried about Joy Global, Bucyrus, which have risen the most, Peabody Energy (BTU), which depends on China for most of its growth and copper play Freeport McMoRan (FCX). Since China imports crude, Cramer says some oil companies might suffer.

He suggests buying consumer staples like Kimberly Clark (KMB), ConAgra (CAG), Clorox (CLX), McDonald's (MCD). Some industrials, such as Copper Industries (CBE), Ford Motor (F) and Boeing (NYSE:BA) are relatively safe to buy because of their limited exposure to China.

CEO Interview: David Aldrich, Skyworks Solutions (NASDAQ:SWKS)

Even doom and gloom is not stopping the mobile internet tsunami; Skyworks, which makes power amplifiers for smartphones has risen 53% since May and beat its earnings estimates by two cents a share. The company raised its guidance for the next quarter, even during a season that is historically slow for tech. Cramer isn't worried that the stock took a dip, because the stock is often volatile around earnings time.

David Aldrich says the mobile internet tsunami has just begun and will extend to other mobile devices beyond smartphones. He says Skyworks provides superior performance at a low cost, and has better margins than its competitors. The company is currently developing technology for smart meters to improve energy efficiency and should receive some government stimulus money for its contribution to the smart grid project. Skyworks is also adept at taking core technologies and adjusting them for various industries. Cramer says the stock is not done and is headed higher.

CEO Interview: Dan DiMicco, Nucor (NYSE:NUE)

Dan DiMicco says he is happy to see the government focused on solving the unemployment problem, and thinks the key is to empower companies to create jobs themselves through lowering taxes and reducing dependence on foreign oil. He thinks the government should work on becoming more self-sufficient when it comes to energy through its natural gas resources and developing nuclear energy technology. Cramer is bullish on Nucor and thinks it could reach $60.

Special Guest: Michael Brune, Incoming Executive Director for the Sierra Club

Michael Brune supported Cramer's thesis that natural gas should serve as a "bridge fuel" while developing alternative energy resources. He does not think clean coal is the answer, and while he says there are some problems with natural gas, it is the best option until the country finds a cleaner alternative.

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