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.
Wal-Mart (WMT): Shares of this mega retailer are up 3.88% after a positive earnings report. Wall Street Strategies upgraded the company to hold from sell, believing the retailer is in a position to gain from consumer spending volatility.
Home Depot (HD): Home Depot had a great earnings report in which net income rose 14% (primarily due to storm damage). Cramer recommends owning stock from this company that continues to deliver. Jason Capello of Merchants’ Gate Capital may feel differently, as he reduced his firm’s portfolio exposure to Home Depot by 29%. (See more of Capello’s holdings here).
Perrigo Co. (PRGO): This “knock-off” producer opened down 8 points today when traders thought they were pouring cold water on future expectations, but rallied 9 points instantly. It was just a conservative move from one of Cramer’s favorite stock.
McDonalds (MCD): McDonald’s rallied a buck and a half today and Cramer recommends it as a company that survives in tough economic times. The fact that MCD offers a “bountiful dividend” is an added bonus. The stock is trading just under its 52-week high of $89.57.
Statoil ASA (STO): This Norwegian oil company recently found a lot of oil, but Cramer said they haven’t been replacing the reserves nearly as much as he would like and he recommends Conoco Philips (COP) because of the high yield that will be backed up by growth.
Bank of America (BAC): Shares of this bank is among the most affordable in the sector. Does that mean it’s a “buy”? Cramer doesn’t think so. Bank of America’s selling frenzy began on Aug. 4th and shares fell 32% in three days on heavy volume. The recent rally does not look convincing, and was simply a short-covering rally. The stock is seeing advancing prices on declining volumes. Offering no dividend doesn’t serve as an enticement to own it. Ultimately, Cramer sees this company as an open-ended liability that should be avoided for the time being.
Cramer regrets that he has BAC in his charitable trust’s portfolio. There are three other financial stocks in Cramer’s charitable trust: US Bancorp (USB), Prudential Financial (PRU), and PNC Financial (PNC).
Wells Fargo (WFC): A viewer inquired as to Wells Fargo long-term growth prospects. While Cramer said WFC would be a survivor, in the end it is a bank stock and will be a long time before owning the stock will be profitable. Aside from Warren Buffet, Robert Pitts of Steadfast Capital Management has also been buying WFC shares en masse (see Warren Buffett’s latest transactions here).
ING Groep (ISE): Cramer gave this struggling bank unit a sell recommendation, as he would rather see viewers in master limited partnerships.
Saks Incorporated (SKS): This high-end fashion retailer reported a better than expected quarter, although the stock has dropped 31% since March. Chairman and CEO Steve Sadove said the company is experiencing 15% top-line growth and the online business growth is up 50% since its inception. In 2010, Saks Direct (the online arm of Saks) saw revenue increases of 28% year-over-year. The retailer is also seeing solid sales figures. In 2010, about 70% of sales were at full-price. Cramer doesn’t understand how the stock price is so low, and suggests that means it should be bought.
Mylan (MYL): This generic drug company was proposed by a viewer calling in. Cramer quickly dismissed the idea, saying, “If Teva can’t make money, why would Mylan?”
CISCO (CSCO): Cisco is ok to own. If it drops below $15, buy it. It’s no longer in the dog house. Zeke Ashton of Centaur Capital Partners has CSCO shares representing more than 7.5% of their portfolio. (See Ashton’s other picks here).
Penn Natl. Gaming (PENN): Cramer thinks the stock is not bad, but prefers Wynn played with deep in the money calls. Morgan Stanley saw the firm as one of the “best-positioned” in gaming due to its product pipeline strength.
Riverbed Technology (RVBD): First problem with this stock is that it’s tech, second problem is that it’s telecom tech, which just produces nightmares. Cramer urged the viewer to sell the stock with no hesitation.
Southern Copper (SCCO): Copper prices are going down and Southern Copper has a good yield. Cramer said to buy the stock and bear it. However, he said the stock is going to continue to go lower. Richard Driehaus of Driehaus Capital has increased their holdings of the metal miner. (More of Driehaus’ picks can be seen here).
Sequans (SQNS): “We made a trade on the company. We recommended it and made a huge gain. But we’re not looking back,” Cramer told a viewer to sell that stock. The stock is trading marginally higher than its 52-week low.
SPDR Gold Trust (GLD): Gold is not done going up and the only time Cramer would recommend selling gold is when it represents more than 20% of your portfolio.
Sunrise Senior Living (SRZ): CEO Mark Ordan took over this company when the stock was valued at $0.27. The stock was hit hard during the credit crisis and fell from $12 in March to current levels of $6.80. Recapitalization is almost complete and the company is poised to do well going forward.
This firm takes advantage of our aging population and is far less dependent upon Medicare than similar companies. Currently, only 3% of our residents pay through Medicare.
Starbucks (SBUX): This renowned coffee producer/retailer has not seen a decrease in sales lately and Cramer recommends buying this stock as the company’s gross margins could surge because of a decline in coffee bean prices.