Jim Cramer's Picks on Wall Street Confidential, Jan. 4

Recap of Jim Cramer’s comments on Wall Street Confidential, Thursday January 4. Click on a stock ticker for more analysis.

Caterpillar (CAT), Phelps Dodge (PD), Guess (GES), Costco (COST), Home Depot (HD), Lowes (LOW), WalMart (WMT), Alcoa (AA), Altria (MO), AIG (AIG), Honeywell (HON), IBM (IBM), Johnson & Johnson (JNJ), Pfizer (PFE), McDonald's (MCD), Microsoft (MSFT), Hewlett Packard (HPQ)

Cramer noted the volatility in the market on Wednesday and attributed it to the fact that the Bell South sale sparked a lot of futures selling, but since the deal is over, the money will flow back. He thinks that the lift in futures was due to a cessation of selling rather than buying. Cramer was disappointed to see that companies that were less consumer sensitive were left standing, and would have preferred to have seen Caterpillar and Phelps Dodge weather the storm. Cramer wanted to see manufacturing or offensive stocks do well and housing and retail get hit so at least the decline could be contained within those sectors.

Aaron Task noted that the holiday season was not a bright one for specialty retailers, and Cramer responded that there is a "secular change in retail" with the high-end "booming." He says the action is in the "aspirational retailers" such as Guess and Costco, but since retail performance was mixed, he doesn't want to focus on these companies too much. Cramer predicts that HD will perform well this year, although "the stock can't sustain a 2-point gain until the numbers turn." He likes HD because housing is bottoming, but prefers LOW.

Turning to other stocks, Cramer said Walmart was "awful," AA will be bought, and that MO will split up. "People don't understand that because Altria has held back its buyback, it has a tremendous amount of cash," Cramer said. The future of AIG, says Cramer, will depend on when Hank Greenberg stops selling shares. Cramer remarked that HON was undervalued, IBM was a cheap, low multiple tech stock, and that "king of marketing" JNJ would succeed with Pfizer's products. Microsoft will gradually rise because of Vista and HPQ should get some benefit, since Vista is "huge."

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Comments

[Grumpy Grandpa:]

I've often wondered why Home Depot has gotten so many complaints over the years, but an extremely negative experience we've had in the past 7+ months has given us new insight. Although my wife and I had been satisfied customers for 20 years and have spent thousands of dollars at their stores, an extremely negative experience we've had in the past 7+ months has given us new insight. It will be the marketplace that decides whether this company can survive such lousy customer service, but they certainly will get much less of our money in the future.

We had numerous problems that came up from a Home Depot contractor landscape job last July that was projected to take about 3 or 4 days but still is not satisfactorily completed here in February even with their highly advertised 'customer service guarantee'.

We're not sure how the installation service could have gotten any worse when considering the lousy workmanship, property damage by the contractor which still hasn't been fixed for over 6 months, violating the terms of the original contract when it explicitly required a change order when part of the job couldn't be done, and adding a 2nd charge when presenting the bill.

This is addressed in detail on our webpage( robanders1.googlepages.../ ) which will show a very detailed chronology of the problems and will include a # of digital photos depicting the problem areas.

2007 Feb 09 06:52 PM