Cramer's Mad Money - Sprint's 'Less Bad Story' (4/21/10)

 |  Includes: C, F, HBAN, ITRI, S, SHAW, SLM, TM, WFC
by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday April 21.

Citigroup (NYSE:C), Huntington Bancorp (NASDAQ:HBAN), Ford (NYSE:F), Toyota (NYSE:TM), Sallie Mae (NYSE:SLM), Wells Fargo (NYSE:WFC), Sprint-Nextel (NYSE:S)

On "blah" days like Tuesday with the Dow up a mere 8 points and the S&P 500 down .12%, Cramer urged taking a page out of the Bible; "On Mad Money, we do not want to get lost in the Sodom and Gomorrah things (i.e. Wall Street), and end up turning into a pillar of salt…like Lot’s wife," but in spite of the bears and the scandals a la Goldman Sachs, Cramer thinks there is still plenty of opportunity in the stock market. He would be on the lookout for the next Huntington Bancshares (HBAN) which has climbed 59% since last year and reported a "monster blowout quarter."

Cramer likes Citigroup (C) and gave some trading advice for Treasury Secretary Tim Geithner; "Tim, I think that you should hold the Federal Government's 30% stake in Citi until the stock hits $6.15, one of my preliminary targets… then at $6.15 what you do is you sell half and you keep the rest and play with the house’s money… I mean, you have got to do it."

Even though Ford has risen from $4 to $14 it is still a buy. Why? If other auto companies are profitable, Ford which did not go bankrupt and needed no government support, must be "shooting the lights out." Toyota (TM) is "speeding up and falling over;" Ford stands alone in the auto sector and is "practically starved for competition." In fact, Cramer thinks Ford CEO Alan Mulally's photograph should grace the new hundred dollar bill.

Sallie Mae (SLM) has nearly doubled, and Cramer thinks it could go still higher given Wells Fargo's (WFC) statements that the student loan market is "red hot." While Cramer thinks there is more upside for Sallie Mae and Ford, he would consider a stock that hasn't moved so much yet; Sprint-Nextel (S) has become a "less bad story." When it reports on the 28th, Cramer predicts it will talk about improving market share, lower losses and a not-so-disastrous balance sheet. Cramer predicts that once analysts upgrade Sprint, it might become a takeover target and its stock price will rise, possibly from $4 to $6, but he also wants to see improved fundamentals.

CEO Interview: Malcolm Unsworth, Itron (NASDAQ:ITRI)

Itron is a play on the smart-grid and has risen 35% since Cramer recommended it in October. Cramer asked if the stock has run too much or if it is still worth buying. Obama has earmarked significant funds to develop the smart-grid, and although it may take years to develop the technology, Itron is still a good play on the early stages.

Itron has 50% market share for installed automated meter reading in the U.S. and Canada and 30% market share worldwide. The technology connects the meter directly to the company, and readings can be updated hourly. In February, Itron reported earnings of 86 cents per share, roundly beating estimates of 22 cents per share and a 10% year over year increase in revenues. Although the stock trades at a multiple of 20, its long-term growth rate is 30%.

When Cramer asked CEO Malcom Unsworth where the smart-grid will be in 5 years, he replied, "I think the United States is significantly ahead of the rest of the world (in its technology). The thing that we do not have in the United States is an energy policy." In Europe, the foundation has been laid for smart metering by 2020. Unsworth says government stimulus money is advancing this process and is also aiding the development of smart meters for water and gas. Cramer thinks Itron has a great long-term story, "Do I think that it could go higher? The answer is… absolutely."

CEO Interview: Jim Bernhard, Shaw Group (NYSE:SHAW)

With Obama tripling the amount of funds earmarked to develop nuclear power, Cramer thinks Shaw Group (SHAW) is looking better, particularly since it is up 16% since August and 194% since the depths of the recession. Shaw reported a strong quarter two weeks ago, even though orders were down 28% as expected. Cramer was amazed to see its backlog, which is a key metric, was at $21.3b which is huge for a $3.2b company. With a large amount of cash, Shaw has a lot of options on where to expand next.

CEO Jim Bernhard says he is not waiting for business to pick up in the U.S. but is expanding abroad, with plans for plants in China, Brazil and Saudi Arabia; the company has 40% exposure abroad. Shaw is also upgrading old plants to increase efficiency. Bernhard isn't worried about the fate of its aging coal plants, since it could either rebuild them or convert them into natural gas plants without loss. Bernhard is increasing hiring by 2,500, much more than wind or solar companies. Cramer is bullish on Shaw Group.


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