Jim Cramer is one of the top watched TV personalities on CNBC. He is the host of Mad Money and also the co-founder and chairman of TheStreet.com. Nearly two hundred fifty thousand people watch his show daily on TV and most of these are ordinary investors trying to understand what’s going on in the market. Jim Cramer’s bullish and bearish stock picks on his show are the starting point for many investments made by these folks.
During the July 18th show, Cramer discussed the following stocks.
Apple (AAPL) and IBM: Cramer was proud that Apple and IBM hit their 52-week highs despite the weakness in the market. He was really bullish about these two stocks and holds them in his charitable trust portfolio.
Halliburton (HAL): Cramer mentioned HAL because it beat the consensus earnings estimate by a large margin, yet didn’t go up because of the decline in the market. Halliburton is the world’s second largest oilfield service corporation. The company provides technical products and services for petroleum and natural gas exploration and production. The company has a market cap of $119.40 billion and a P/E of 22. Monday the company reported a profit of $739 million, or 80 cents a share, up from $480 million, or 53 cents a share, a year earlier. For earnings day, the stock was up 0.14 to $87.35. Ken Heebner’s Capital Growth Management is the top holder in HAL among the 300+ funds we are tracking (See Ken Heebner’s favorite stock picks).
News Corporation (NWSA): Cramer thinks the sum of the parts of News Corp will be worth more than News Corp itself because of the Murdoch discount. It is a well-run, profitable company trading at a lower multiple than any of its competitors. The stock trades around $14.97, lost nearly 20% from its high earlier this year. News Corp was a popular stock among hedge funds. News Corp’s top 9 holders lost more than $300 Million during the past few weeks.
Enterprise Products Partner (EPD) This is a master limited partnership that operates an oil and natural gas pipeline service company. The pipeline operator has a market cap of $36.08 billion and currently trades around $42.88. It has a 5.5 percent dividend yield and just raised its distribution by about 1.25 percent. Cramer is bullish on this stock and said “Money comes to these guys because people need pipelines to bring oil to market from all the new domestic finds I talk about here all the time,”and “EPD is right in the thick of these new discoveries because they’re building out pipeline capacity in areas that are at the heart of the North American drilling boom.”
SPDR Gold Shares (GLD) GLD seeks to replicate the performance of the price of gold bullion. GLD is an exchange traded fund, which Cramer thinks is the best way to go if you want to invest in gold. He didn’t recommend any of the gold miners this time. One viewer asked about Silver (SLV) but Cramer said that he doesn’t want to dilute his message and he picked gold over silver. He also recommended buying the actual gold bullion but warned viewers not to keep it at home. John Paulson, whose Advantage Plus fund lost nearly 20% this year is the largest holder of GLD. Paulson urged his investors to switch to gold denominated versions of his funds back in 2009. He personally keeps most of his wealth in these funds and made $5 Billion last year because of the appreciation in gold (Check out John Paulson’s favorite gold stocks).
MarkWest Energy Partners (MWE) MarkWest Energy is an oil and gas exploration company. This company has a $3.6 billion market cap and has a 5.6% dividend. Cramer is bullish on this company because it largely conducts operations in the oil-rich Marcellus shale. The stock is currently trading around $47.92.
During the Lightning Round, the following technology stocks came up; Tibco Software (TIBX) $27.27, Salesforce.com (CRM) $152.63, Red Hat (RHT) $43.05 and VMW (VMW) $100.78. Cramer thinks these are the best plays on cloud computing but did not want to recommend any tech names until late August.
Sonic Automotive (SAH) Sonic is a retail auto dealership. Sonic has a market cap of $773.06 million and a P/E of 9.08. This auto retailer is a great buy, Cramer said. He likes the auto dealership space right now. The stock closed Tuesday at $14.98.
Orbitz Worldwide (OWW) Orbitz Worldwide, Inc. operates as an online travel company worldwide. It enables leisure and business travelers to search for and book a range of travel products and services. OWW trades around $21.86. When it comes to online travel companies, Cramer prefers Travelzoo (TZOO) Travelzoo’s stock closed Tuesday at $87.79.
A caller asked about Telefonica (TEF). Cramer’s response was “Doing business in Spain is "too dicey" right now. Cramer said he would look to Vodafone (VOD) $25.45 if he had to play a European telecom because of its nearly 7% dividend yield.
Jim Cramer had Mike Morris, the CEO of American Electric Power (AEP), on the phone at the end of his show. American Electric Power Company, Inc., together with its subsidiaries, engages in the generation, transmission, and distribution of electric power to retail customers. The company has a market cap of $42.88 billion and grows at a rate of 4.8%. Mr. Morris believes that American Electric Power is a “low risk high yield” investment. Cramer agreed, citing the stock’s 4.9 percent yield and the fact that the stock is cheap because it is trading at a discount to other utilities. The stock ended the day Monday $37.11. Israel Englander’s Millenium and Steve Cohen’s SAC Capital are among the hedge funds with large positions in AEP. Steve Cohen returned more than 10% so far this year and is among the most successful hedge funds.
Disclosure: I am long VOD and physical gold.