Seeking Alpha
Profile| Send Message| ()  

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday May 10.

The Single Best Play on Apple (AAPL): Cirrus Logic (CRUS)

When it comes to the tech, Cirrus (CRUS) really has smarts: the smartphone and the smart-grid. The stock got savaged by the European "contagion," and closed down 21% at $10.52 going into the weekend. Although this unfairly punished producer of high precision analog and mixed signal semiconductors has "come back hard" after last week's decline, Cirrus is still worth buying. For one thing, Cramer says Cirrus is "the single best play on Apple (AAPL) that I have been able to find." Apple is responsible for 33% of the company's revenues, and while usually such dependence on one company is detrimental, the pin action off of Apple is "colossal." With the iPhone and the iPad selling out, in many places "you can't get one of these products." Cirrus also derives 30% of its sales from technology for the smart-grid the government is developing to save energy.

Cirrus has a clean balance sheet, and trades at a multiple of 11 with 19% growth. While Cramer is enthusiastic about Cirrus, he doesn't recommend chasing the stock but would use limit orders when buying and would be willing to pay up to $13.

The New Reality: Caterpillar (CAT), Boeing (BA)

In spite of Monday's "gigunda, incredible, beautiful rally" in stocks and European bankers "going nuclear" against the euros' enemies, the "nattering nabobs of negativity" (i.e. the media) were at it again, said Cramer, spreading doom and gloom about the market. "How the heck do these people make money?" he mused and concluded that no matter how positive the news, there will always be those who insist on finding fault with the market.

Yes, Cramer did make his Dow target 9,000 last week, but he clarified that was only if the European Central Banker, Jean-Claude Trichet, continued to do nothing. However, since Europe is demonstrating that it is committed to fixing its problems, Cramer says he has ceased to be negative. With a rally in the bonds of troubled countries, an uptick for copper futures and oil futures and a rise in the euro "the danger has abated...it might be off the table."

Meanwhile, things look bright for the U.S.: "Our companies have great balance sheets and tremendous earnings momentum that will not be comprised by a second recession in Europe… that is the new reality."

When interviewers ask Cramer what his biggest fear is, he replies; "That my charitable trust is not positioned well enough to take advantage of this rally." While it was hard to hold onto Boeing (BA) and Caterpillar (CAT) last week because of worries about Europe, now the fundamentals are starting to matter again, said Cramer, who had a message for would-be investors who insist on sitting safely on the sidelines:

You are ignoring the single biggest thing that has ever happened since Ben Bernanke decided to take nationalization and forget about it, can it… and he created the generational bottom in 2009... this is the real deal.. they could not take the riots in Greece.. the European leaders have spoken… the crisis is done… and if that does not make you more positive, frankly, I do not know what will.

CEO Interview: James Taiclet, American Tower (AMT), Verizon (VZ)

While the internet tsnuami has been storming ahead, one group that has been left behind in the rain is the tower business. This is ironic, since, as the number of smart-phones rise, carriers will need more towers to deliver efficient service to customers. American Tower (AMT) is the largest tower company in the U.S. with 27,000 towers in operation. The stock has risen 16% since September and would be up more if it weren't for comments from Verizon (VZ) that the company has enough towers for its fourth-generation deployment. Cramer says the amount AMT has been punished for these remarks is "disproportionate" and Taiclet explains that most of the growth now is from 3G phones, and Verizon will have several phases to the 4G; currently, it has completed only the last stage of the first phase. From Verizon, there is "much, much more to come," said Taiclet.

American Tower is seeing massive opportunity in India where the company has been able to "expand as much as we like" and has doubled its business in Brazil in the past few years. The company currently has 17% international exposure, but the CEO wants to increase that number to 25-30% in the next few years.

American Tower is most likely going to become a REIT, which will mean more cash flow and more money returned to shareholders. Cramer would get into the stock ahead of this transition, especially since it has been knocked down so dramatically.

Mad Mail: Petroleo Brasileiro (PBR), Potash (POT), BP (BP), Bristol Myers (BMY), Eli Lilly (LLY), Health Care REIT (HCN)

Cramer praised one viewer for holding best-of-breed oil and fertilizer companies Petroleo Brasileiro (PBR) and Potash (POT) but says the stocks are "too wild." Once they rise, he would cut the positions in half and use the money to buy high dividend stocks Bristol Myers (BMY), Eli Lilly (LLY) and Health Care REIT (HCN); "It is too hard to do what you are doing," he added.

Cramer says BP (BP) is "way overdone to the downside," and thinks the cleanup costs from the Gulf of Mexico spill are exaggerated. Once the "mess is cleaned up" BP will rise 5 points, Cramer predicted, and added that the dividend is good.

:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

Jim Cramer was up 31% in 2009. Click here now to trade alongside him.

Get Cramer's Picks by email - it's free and takes only a few seconds to sign up.

Source: Cramer's Mad Money - The Single Best Play on Apple (5/10/10)