Jim Cramer's Mad Money In-Depth Stock Picks, Jan. 18

by: Miriam Metzinger

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday January 18. Click on a stock ticker for more analysis:

Lear (NYSE:LEA), Time Warner (NYSE:TWX), WCI Communications (WCI), Lennar (NYSE:LEN)

Cramer says that it is a good idea to piggyback off of financial wizards such as Carl Icahn who made good calls with Lear and TWX and is currently buying WCI. However, he stressed that it is important to understand why Icahn likes this upscale homebuilder which owns 86% of its properties. Cramer notes that WCI is sitting on a pile of real estate, is selling at below book value, and predicts that the stock will eventually be more valuable than the properties. While some are worried about Florida real estate, Cramer observes that Lennar recently made a successful Florida investment. An important rule in piggybacking, says Cramer, is to wait for the hype to pass before investing; Icahn bought WCI when it was four points lower, andit is now nearly $22.

Related: Lon Juricic reports that Carl Icahn is increasing his stake in WCI by 14.57%.

Genentech (Private:DNA)

After enjoying a successful year, DNA is lower than it has been in the last 14 months, and Cramer attributes this to the market's subjectivity, especially since the company was expected to see 30% growth and it actually reported 70% growth. Cramer explained that the factors affecting the movement of a stock are its earnings and its multiple. Since DNA reported strong earnings, its multiple, or what people are willing to pay for the earnings, must have been a factor in its decline. A multiple is affected by three kinds of risk: political, earnings and inflation. Cramer eliminated earnings risks from the equation, said that inflationary risks affect future earnings and have peaked, and that worries about the Democrats hurting DNA have abated. Cramer concluded that DNA is heading back up to where it was 14 months ago, called it a best-of-breed biotech stock with a great pipeline. His conservative estimate is that DNA will go to $104 from $87.53 and his bullish figure is $140.

Related: H.S. Ayoub comments that DNA led the biotech rally.

Sell Block:Guess? (NYSE:GES), XM Satellite Radio (XMSR), Interpublic Group of Companies (NYSE:IPG), Deere (NYSE:DE)

Cramer would sell Guess after it rose 38.7% since his initial recommendation. He would get rid of XMSR because it has "run out of steam." Although IPG may have some upside, Cramer would take profits and sell it. He has liked DE for a long time, but Cramer says that it is time to say goodbye. Although it might go up an other 8 points, Cramer says that this $100 stock has given its investors substantial profits.

Mad Mail: Apple (NASDAQ:AAPL)

Cramer disagrees with an Investors' Business Daily bullish call on tech; "I like IBD very much but think they are wrong here," he said. When asked who is selling Apple, Cramer says that the shorts are putting pressure on the stock, adding that it should not have risen 8 points on the release of iPhone and its negative guidance may be bringing it down. However, he would build a position on the stock as it declines.

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