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 is the starting point for many investments made by these folks.
During the August 3 show, right before the 500 point plunge in the DJIA, Cramer discussed the following stocks:
- Darden Restaurants (DRI): Cramer feels this restaurant group is poised to benefit from the decline in WTI crude prices after complaining mightily during their conference call about gasoline prices hurting their numbers. When gas prices are high, most people have less discretionary money to spend. Cramer reminded viewers the restaurant sector bottomed first when oil peaked in 2008.
- VF Corporation (VFC) and Phillips Van Heusen (PVH): Cramer referenced these stocks vaulting higher as a result in the drop in cotton prices. David Keidan's Buckingham Capital has a relatively large stake in VFC whereas Joel Greenblatt sold his holdings during the first quarter (see Joel Greenblatt's magic formula stocks).
- Clorox (CLX): A strong takeover bid as a result of another terrible quarter. Cramer feels another substantial bid could be coming soon from investor Carl Icahn. Icahn believes the stock is worth $100 to PG or Unilever and he has been trying to put the stock in play. Icahn is one of the top performing hedge fund managers this year (check out his top stock picks).
- Open Table (OPEN): A viewer asked if the slowdown of this stock calls for a sell. Cramer feels it is a safe stock to keep. He feels it is a company that is doing quite well and reported spectacular numbers. The momentum has simply slowed.
- Devon Energy (DVN): Cramer highlighted this energy company as a bargain stock. The company reported a strong quarter and Cramer feels it is time for the stock to play catch-up with other high-flying domestic producers. Devon Energy has shifted from a diversified global explorer to a North American onshore development company. The company raised 10 billion dollars in asset sales, in which it bought back stock, improved the balance sheet and expanded its resource base. Devon Energy is spending 95% of capital budget on oil and other liquid-rich plays. Cramer considered this to be good news, given the low price of natural gas and relative high price of oil.
- Herbalife (HLF): This direct-sales company delivered a great quarter in which it earned 88 cents a share, beating estimates by 5 cents per share. Cramer touts the company's international exposure, as only 20% of sales come from North America.
- Marathon Oil (MRO) and Carrizo Oil & Gas (CRZO): The lightening round began with Cramer being asked which of these oil companies he preferred to own. Although Marathon Oil didn't have a great quarter, Cramer felt Carrizo was better to own because it is an easy takeover target. Steve Cohen's SAC Capital is the largest holder of CRZO among the 300+ hedge funds we are tracking. Unfortunately Steve Cohen lost $200 million in a single day due to the 67% decline in DNDN (see the details here).
- Health Care REIT (HCN): Although it has been hammered, Cramer calls this REIT a buy. They know there is going to be some retrenchment from Washington, but they have some cushion to withstand it.
- Century Link (CTL): A viewer asked whether this integrated communications company's dividend was safe. Cramer said the company was making much less money than they thought they would be and after today's extremely disappointing results, it was not safe.
- IntraLinks Hldgs. (IL): This software solutions firm had a hideous quarter according to Cramer and he suggested waiting until next quarter's results before pulling the trigger to sell.
- Apache (APA): Cramer was asked if there were other natural gas stocks he'd rather own. Cramer stated that Apache was a great company and had the best growth profile, except for maybe Chesapeake Energy Corp (CHK).
- Johnson Controls (JCI): A viewer asked how Cramer currently felt about this stock after he recommended it 4-5 weeks ago and hasn't performed well since. Cramer agreed that the stock had been killed, but felt it had a good quarter and the company's future is better than its past. Cramer stated it was a "screaming buy" at $36.
- Allergan Inc. (AGN): Cramer generally doesn't recommend pharmaceuticals in this environment because they ultimately depend on government spending around the world for growth and that spending may not be available going forward. About one-third of the company's franchise is cash paid. Cramer noted the stock as a buy, stating it is one of the few growth pharmaceuticals available (primarily a result of their massive R&D spending). The medical aesthetics company reported excellent quarterly earnings of 96 cents per share. Healthcare specialists Joe Healey's HealthCor and Samuel Isaly's OrbiMed have the two largest stakes in AGN. We also like Joe Healey's stock picks in general (see Healey's top stock picks).