Cramer's Stop Trading! The Top 2 Performers of the S&P 500 (12/23/10)

by: Miriam Metzinger

Stocks discussed on Jim Cramer's Stop Trading! TV Segment, Thursday December 23.

Netflix (NASDAQ:NFLX), F-5 Networks (NASDAQ:FFIV), Jo-Ann Stores (NYSE:JAS), Retail HOLDRS ETF (NYSEARCA:RTH), Bed Bath and Beyond (NASDAQ:BBBY), Walter Industries (NYSE:WLT), Potash (NYSE:POT), Airgas (ARG), Air Products (NYSE:APD)

The top two performers of the S&P 500 for 2010 were Netflix (NFLX) and F-5 Networks (FFIV), both Cramer picks. The Mad Money host said it is not too late to buy either stock, given that both have long term secular growth stories.

Two big gainers for Thursday were Bed Bath and Beyond (BBBY) and Jo-Ann Stores (JAS), the former on earnings results and the latter on a takeover bid. Cramer commented that while he isn't so much into shorting, Jo-Ann is the kind of stock that he thought might have made a good short before the surprising news. With the RTH (RTH) up so high, the shorts have wanted to attack retailers like JAS, but Cramer says JAS is clearly undervalued given how much private equity is willing to pay for it.

The Street was waiting for bad news from Bed, Bath and Beyond (BBBY), but the company reported a strong quarter. Given the amount of cash the company has, it is not expensive, and Cramer noted how unusual it is for retail to be performing so well late in the holiday season. "Retail has not run enough, and that makes me very bullish for 2011. It has historically not been the right move to be bullish on retail at the end of the holidays."

Investors who abandoned Potash (POT) after its rejected bid made a mistake; Cramer thinks Potash is a buy on fundamentals. He feels the same way about Airgas (ARG) now that talk of a deal with Air Products (APD) is "absolutely over." The historical price for ARG has been $70, and Cramer thinks on its fundamentals, Airgas "will be hot for 2011."

Coal is strong, especially coal that is being shipped to China. While Walter Energy (WLT) has had a 15-16% run and may seem expensive, supplies of coal are still short and demand is growing.


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