Recap of Jim Cramer’s comments on Wall Street Confidential, Wednesday January 17. Click on a stock ticker for more analysis:
Cramer says that investors should be selling tech because seasonality is working against the sector, and that RACK's problem has more to do with the time of year than its component shortage and competition. Concerning Intel, Cramer explains its new chip will not reach a 90% to 95% acceptance rate this year, and since gross margins will not rise until then, Intel "cannot be owned" right now. However, the problems with RACK and Intel do not alter Cramer's prediction that tech will outperform in 2007. Cramer would buy HPQ because it will benefit from Microsoft's Vista. Cramer would also pick up Cisco down at $26 or $25 because of the incredible ramp in cable; "If you have a product cycle, I think you can ride out the seasonable weakness," Cramer said. Apple transcends seasonality because it is a "secular growth story and and a product cycle story." He would take advantage of any decline to buy Apple.
Cramer is bullish on JP Morgan because of its credit card growth and added that COF is one of the most hated stocks, noting that there is a tremendous January $75 put to buy COF. If the company reports a lackluster quarter, the puts will act as a trampoline. Cramer says that it is worth investing in airlines again, and would take profits and buy them again.
UPS (NYSE:UPS), Procter & Gamble (NYSE:PG), Colgate (NYSE:CL), Kellogg (NYSE:K), General Mills (NYSE:GIS), Oil Service HOLDRs (NYSEARCA:OIH), Caremark (CMX), Rite Aid (NYSE:RAD), Comcast (NASDAQ:CMCSA), Time Warner (NYSE:TWX)
Cramer is bullish on UPS and likes rails, which are a buy on any decline because the trucking sector is suffering. He added that Goldman Sach's upgrade of PG was worth noting and, if it weren't for a strike, the stock could reach $67 or $69. He attributes the success of PG and CL to investor's desire to look for other soft goods that are not dependent on corn prices. However, since cereal is only 3% to 4% corn, Cramer thinks selling Kellogg and General Mills is premature. Concerning oil, Cramer thinks that OIH has been a reliable barometer for oil prices and is heading toward a bottom, but he hesitates to recommend it because it is an "easily manipulated index." Cramer would ring the register on Caremark, and of all the drugstores, he would own only RAD. Finally, Cramer predicted that Comcast is "headed dramatically higher" and said that, at $22, Time Warner is undervalued.
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