Cramer's Stop Trading! Why Cisco Hasn't Killed Ciena (12/16/10)

by: Miriam Metzinger

Stocks discussed on Jim Cramer's Stop Trading! TV Segment, Thursday December 16.

FedEx (NYSE:FDX), Nucor (NYSE:NUE), General Mills (NYSE:GIS), Joy Global (JOYG), Bucyrus (NASDAQ:BUCY), Peabody (BTU), Ciena (NASDAQ:CIEN), Cisco (NASDAQ:CSCO)

Cramer discussed the "alleged disappointments" of General Mills (GIS), Nucor (NUE) and Federal Express (FDX). While all three missed numbers, he said sellers were overly hasty when all three companies gave a bullish picture of 2011. Nucor's miss in particular should not have obscured the fact that there was a progression in the quarter which was improving towards the end. Cramer observed that CEO Dan DiMicco was "subtly bullish" about 2011; "He has not been bullish for two years."

While Goldman Sachs doesn't like coal and issued a statement discussing industry-wide problems, Goldman is bullish on Peabody (BTU). It was as if the bank were saying "put all your chips on Peabody," Cramer said.

When Caterpillar (NYSE:CAT) bought Bucyrus (BUCY), there was a selloff in Joy Global (JOYG); it was as if investors assumed there was room for only one major miner. However, mining budgets are up "gigantically." Buyers are coming back to Joy Global now that it reported a great quarter, "Where were these guys when Caterpillar bought Bucyrus and Joy Global was down 5 points?"

If Cisco (CSCO) were still the kind of company it once was, it should have wiped out Ciena (CIEN) by now, observed Cramer. Instead, Ciena is taking it to Cisco, which is a sign that the latter company is weak and overgrown. Cramer predicts Ciena will hit $30.


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