Here, we review the Wednesday, March 4th buy and sell recommendations of Jim Cramer, host of Mad Money on CNBC. Since then, for comparison purposes, the S&P 500 is +0.82% and the Dow is +2.51%.
Cramer Buy Recommendations
American Express (AXP): Cramer first recommended this company this year on January 3. Since then, AXP is up by 5.8%. On March 4, he reminded his viewers to buy it. Since then, AXP increased by 2.5%. Amex has a well-managed rewards program through its credit cards. Unlike competitors Visa (V) and Mastercard (MA), Amex can issue its own cards and obtains most of its credit card earnings from merchant fees. In a key distinction, the company is therefore levered to spending, including inflationary spending, and not lending. We think net write-offs of bad loans will continue to decline, and the market has not fully factored this into Amex's price. We think shares are worth around $53 apiece using an 11% cost of equity, and on the back of modest, single-digit revenue growth the company should resume modest dividend increases.
Freeport-McMoRan (FCX) was recommended four times in March on the 4th, 8th, 14th, and the 17th, twice in February on the 15th and 22nd, and once in January on the 4th. FCX is down by 5.3% since January 4, but +12.9%, since March 8. FCX is a leading international mining company with headquarters in Phoenix, Arizona. FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX has a dynamic portfolio of operating, expansion and growth projects in the copper industry and is the world’s largest producer of molybdenum.
The company’s portfolio of assets includes the Grasberg mining complex, the world’s largest copper and gold mine in terms of recoverable reserves, significant mining operations in the Americas, including the large scale Morenci and Safford minerals districts in North America and the Cerro Verde and El Abra operations in South America, and the Tenke Fungurume minerals district in the Democratic Republic of Congo. On a discounted cash flow basis, we model shares being worth $39, using a 12% cost of equity.
Pall Corp (PLL) is up by 5.6% since March 4. The company is a filtration, separation and purification leader providing solutions to meet the critical fluid management needs of customers across the broad spectrum of life sciences and industry. Pall works with customers to advance health, safety and environmentally responsible technologies. The company’s engineered products enable process and product innovation and minimize emissions and waste. Pall Corporation, with total revenues of $2.4 billion for fiscal 2010, is an S&P 500 company with more than 10,000 employees serving customers worldwide. We think shares are overbought and place fair value at $42 per share.
Linn Energy (LINE) is up by 2.2% since March 4. Cramer reiterated the buy on March 16. LINN Energy's mission is to acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets. LINN Energy is a top-20 US independent oil and natural gas development company, with approximately 2.7 Tcfe of proved reserves in producing US basins as of Dec. 31, 2010.
Hibbett Sporting Goods (HIBB) is +19.5% since March 4. The company is a rapidly-growing operator of sporting goods stores in small to mid-sized markets, predominantly in the Southeast, Southwest, Mid-Atlantic and lower Midwest regions of the US. As of January 30, 2010, it operated a total of 767 retail stores composed of 747 Hibbett Sports stores, 16 Sports Additions athletic shoe stores and 4 Sports & Co. superstores in 24 states.
Diamond Foods (DMND) is up by 19.7% since March 4. The company is an innovative packaged food company focused on building, acquiring and energizing brands including The Kettle Brand, Diamond of California, Emerald, and Pop Secret. The company’s products are distributed in a wide range of stores in North America as well as Europe. On April 5, it signed a definitive agreement to merge the Pringles business into Diamond Foods.
Warnaco (WRC) is +6.3% since March 4. The Warnaco Group, headquartered in New York, is a leading global apparel company engaged in the business of designing, sourcing, marketing and selling men’s, women’s and children’s sportswear and accessories, intimate apparel, and swimwear under such owned and licensed brands as Calvin Klein, Speedo, Chaps, and Warner’s and Olga.
Ciena (CIEN): Cramer changed his mind on this. He put out buys on January 10th and 11th, February 28th, and March 4th, but then put a sell on it on March 7, 8, and 21. We wrote about Ciena in Cramer’s February 28 picks. Since January 10, CIEN shares are up 11.4%, but since March 7, they are down 7.8%. We believe shares of Ciena are getting toppy, and investors would be well advised to take profits off the table with this one.
Weatherford (WFT): Cramer recommended this once a month this year on January 7, February 17, and on March 4. WFT is up by 2.7% since January 7. The company is one of the largest global providers of advanced products and services that span the drilling, evaluation, completion, production and intervention cycles of oil and natural gas wells. Weatherford employs more than 50,000 employees worldwide, operates in more than 100 countries to include 125 globally distributed manufacturing facilities supporting 900 service bases and 16 technology development and training facilities.
Boeing (BA): Cramer likes this one a lot. He has recommended it on January 3, January 6, February 28, March 4, and on March 17. Boeing shares are up by 12.2% since January 3. Over a 6 month period, they are up by 6.7%. In 2010, EPS came in at $4.45, which was an increase of 141.85%, after tumbling by 49.86% in 2009. For 2011, the company expects EPS to clock in around $3.80 to $4.00, which would be a decrease of 10.1% to 14.6%. Q1 2011 results are to be released on April 18.
Walter Energy (WLT): Cramer put out a buy on this one on February 17, February 28, March 1, March 4, March 17, and on March 28. WLT shares are up by 11.1% since February 17.
Cliffs Natural Resources (CLF) is up by 8.7% since February 17. He spoke positively about Cliffs again on March 4. Cliffs Natural Resources is an international mining and natural resources company. A member of the S&P 500 Index, it is the largest producer of iron ore pellets in North America, a major supplier of direct-shipping lump and fines iron ore out of Australia and a significant producer of high and low volatile metallurgical coal.
The company is organized through three geographic business units: the North American business unit is comprised of 6 iron ore mines owned or managed in Michigan, Minnesota and Canada and 6 coal mines located in West Virginia and Alabama. The Asia Pacific business unit is comprised of 2 iron ore mining complexes in Western Australia and a 45% economic interest in a coking and thermal coal mine in Queensland, Australia. The Latin American business unit includes a 30% interest in the Amapá Project, an iron ore project in the state of Amapá in Brazil.
Cramer Sell Recommendation
Clean Energy Fuels (CLNE) is up by 22% since March 4. Cramer told his viewers to sell this again on March 14. It looks like investors disagree strongly with Cramer. The company is the largest provider of natural gas fuel for transportation in North America and a global leader in the expanding natural gas vehicle market. It has operations in CNG and LNG vehicle fueling, construction and operation of CNG and LNG fueling stations, biomethane production, vehicle conversion and compressor technology. Clean Energy fuels over 21,200 vehicles at 224 strategic locations across the US and Canada with a broad customer base in the refuse, transit, trucking, shuttle, taxi, airport and municipal fleet markets. Clean Energy del Peru, a joint venture, fuels vehicles at 2 stations and provides CNG to commercial customers in Peru.
The company owns (70%) and operates a landfill gas facility in Dallas, Texas, that produces renewable natural gas, or biomethane, for delivery in the nation's gas pipeline network. It is also building a second facility in Michigan. The company owns and operates LNG production plants in Willis, Texas and Boron, California with combined capacity of 260,000 LNG gallons per day and that are designed to expand to 340,000 LNG gallons per day as demand increases. NorthStar, a wholly owned subsidiary, is the recognized leader in LNG/LCNG (liquefied to compressed natural gas) fueling system technologies and station construction and operations. BAF Technologies, a wholly owned subsidiary, is a leading provider of natural gas vehicle systems and conversions for taxis, vans, pick-up trucks and shuttle buses. IMW Industries, a wholly owned subsidiary based in Canada, is a leading supplier of compressed natural gas equipment for vehicle fueling and industrial applications with more than 1,200 installations in 24 countries.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.