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 15th show, Cramer discussed the following stocks.
Lowe’s (LOW): Despite the bad quarter, Lowe‘s closed up 0.82%. Cramer still prefers Home Depot (HD) though. Jason Capello of Merchants’ Gate Capital recently reduced the fund’s position in Lowe’s. (Check here for more of Capello’s picks).
Motorola Mobility (MMI): This company received a huge bid (60% premium) from Google (GOOG) for its patent portfolio. Cramer used this acquisition to prove that stocks represent more than just indexes. They represent real companies that affect our lives. Billionaire investor Carl Icahn made more than $400 Million from this deal (see Icahn’s top stock picks).
Sony (SNE): Cramer proclaimed that Apple is the destroyer of Sony and it is just a terrible stock. He urged a viewer to sell the stock after it increases a couple more bucks. Sony is closed at $22.35, just a dollar over its 52-week low.
CurrencyShares Euro Trust ETF (FXE): A viewer called in and used this ETF as a basis for asking why the Euro continues to outperform the dollar. Cramer said the ideological influences taking place are placing a temporary squeeze against the Euro, but recommended not getting too caught up in it. The ETF closed up 1.35%.
SodaStream (SODA): A high-flying earnings stock that suffered a meltdown, particularly because of an awful guidance. Although the company‘s unit sales were up 226% from last year, SodaStream practically announced “we‘re done as a growth stock”, said Cramer. Cramer felt that the company’s comments against mega-retailer Costco (COST) hurt it as well. SodaStream is concerned that Costco won’t display or demonstrate its machine well enough to entice consumers.
Cramer advised taking some profits from this company back in July. It has become clear that SodaStream will not be the new Keurig [from Green Mountain (GMCR)]. The difference is Keurig is transforming a market. SodaStream is attempting to create a completely new market. John Murphy of Alydar Capital recently reduce his firm’s position in SodaStream by 40%. See more of Murhpy’s picks here).
Oracle (ORCL): This tech stock dominates the enterprise market and has just received mixed reviews from a number of financial firms. While RBC Capital downgraded it, Credit Agricole and FBR both upgraded it. RBC was worried about the company’s combined hardware and software strategy as well as competitors taking away market share. Cramer thought they overlooked the biggest concern, which is the chance of slashed corporate IT budgets if the global economy continues to slow down.
For a tech company to be a good buy in this market, Cramer said they need to have exposure to strong end markets, high returns and a strong balance sheet. Oracle has all three. In addition, they have new products that will help the firm take market share and gain double digit growth. Even in this market, it still managed to deliver 17% earnings growth. The stock is relatively cheap trading at 11 times forward earnings.
Best Buy (BBY): Cramer was shocked to see how low the stock is, but said he likes stocks with catalysts. In an industry that is easy for customers to avoid in tough economic times, he doesn’t see what the catalyst for Best Buy will be and can’t recommend it. Although the stock yields over 2.5%, it is $20 down from the 52-week high.
Encore Wire (WIRE): Despite a viewer pointing out that the company has no debt, a good balance sheet and a lot of cash on hand, Cramer couldn’t recommend it just yet. This company is “way too controversial” for Cramer to give a recommendation on the company, saying a lot depends on where they stand with copper.
Caterpillar (CAT): Cramer said CAT was one of the most “bedraggled” stocks to own in this market, he thinks it’s incredibly cheap. Caterpillar is trading at 14 times earnings and generating 6.05 earnings per share.
Public Storage (PSA): Cramer loves this REIT because it is one of the most consistent ones and can raise its distribution repeatedly. He didn’t hesitate to give it a glowing buy recommendation.
Travelzoo (TZOO): Cramer advised viewers to not buy this stock because this last quarter was not what he wanted to see and quipped that the stock is down “round trip”. He said he’s not playing this short squeeze anymore. The stock is more than 50% off the 52-Week high of $103.80.
Dover Corp. (DOV): This great industrial company owns a lot of different businesses to spare and Cramer recommends buying it. Stanley Shopkorn and Douglas Day of Hilltop Park Associates reduced their holdings of Dover Corp. by 20%. (For more of Shopkorn and Day’s picks, check here).
BJ’s Restaurants (BJRI): Cramer gave this large cap restaurant company a buy recommendation because aside from being one of his absolute favorite restaurants, the stock has gotten way too hammered for its value. The stock now trades at $44.89, $12 off the 52-week high. BJ’s Restaurants owns and operates over 100 restaurants located in 13 states.
ARIAD Pharma (ARIA): Cramer endorses this stock for speculation purposes only, as he likes the anti-cancer drugs as well as the amount that the price has come down to. The stock closed at $9.96.
Starbucks (SBUX): Cramer recommends owning Starbucks as Howard Shultz pledged to keep out of politics and continue to hire. Glenn Russell Dubin of Highbridge Capital Management purchased a considerable position in the coffee retailer. (Check here for more of Dubin’s other holdings).
CareFusion Corp. (CFN): A spin-off of Cardinal Health, CareFusion is actually a collection of healthcare companies whose aim is to help hospital administrators be more cost-effective. They own a diversified portfolio of great brands and are sitting on $1.2B in cash. The stock currently trades at 12.4 times earnings.
CEO Kieran Gallahue said that around the world, countries are trying to reduce healthcare costs, and this is something his company helps them to do. Cramer recommends getting in on this stock now because he feels it’s one that will be heavily talked about in the coming years.
Transocean (RIG): The world‘s largest offshore driller just bid $1.43B for Norway‘s Aker Drilling, a 98% premium. While this may seem unreasonable, Cramer poses the question: does anyone have more visibility than Transocean? Perhaps National Oilwell Varco (NOV) which recently inked a deal to build seven shipyards in Brazil. Ensco Intl. (ESV) announced in February that they planned to acquire Pride International for $41.60 per share. It completed the acquisition in May, making it the 2nd largest offshore drilling company.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.