Jim Cramer's Stock Picks (From Sept. 21, 2011)

by: Insider Monkey

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 September 21st show, Cramer discussed the following stocks.

Walter Energy (NYSE:WLT) and Alpha Natural Resources (ANR) both cut their output and sales forecasts for steelmaking coal. As a result, a number of coal and coal-related stocks were perhaps unjustly clobbered.

Arch Coal (ACI) and Peabody Energy (BTU) suffered simply because they do business in the coal industry as well. Cramer credits the irrational trading as taking place in a market where no one wants to take a loss, so traders sell stocks on broad sector news and not so much on individual performance.

Mining equipment makers Caterpillar (NYSE:CAT) and Joy Global (JOYG) fell because of their correlation to coal, an industry that was perceived to be weak because of bad news from Walter Energy and Alpha Natural Resources.

Joy Global dropped more than 5 points, although the CEO said coal imports to India are growing rapidly and that bookings and contracts with significant deposits have increased in 3rd quarter. The business is not showing any signs of weakness. Cramer thinks the stock has fallen on market emotions and not fundamentals.

Union Pacific (NYSE:UNP), CSX Corporation (CSX) and Norfolk Southern Corporation (NYSE:NSC) were all hit hard on the bad news, as the railroad companies are the primary means of transporting coal.

Molycorp (MCP): Cramer thinks rare-earth plays are too risky, and advised a viewer to proceed with caution. Molycorp has a $3.34 billion market cap and trades at 138 times earnings. There had been massive insider selling in MCP earlier this year when the stock was trading above $50 per share.

SYSCO (NYSE:SYY): Although Sysco offers a good yield, they reported a bad quarter. Cramer would like to see more growth in food distributors before recommending them. SYSCO yields 3.8%.

Electronic Arts (ERTS): This video game maker’s stock has rallied 35% over the past 12 months. Recognizing that gaming is shifting to social, Electronic Arts acquired PopCap games in July. Electronic Arts has a $7.2 billion market cap, which Cramer thinks is too low when considering all the growth available to the company.

Halliburton (NYSE:HAL): Is Trading close to its 52-week low, and people are thinking oil is going to crash, so they’ve been selling the stock. Halliburton has a $32.27 billion market cap and trades at 14.5 times earnings. Ken Fisher initiated a brand new $285 million position in HAL during the second quarter (see billionaire Fisher’s top stock picks).

Abbott Laboratories (NYSE:ABT): While Cramer sold all of his charitable trust’s position in Abbott Labs, he still likes the stock’s 3.7% yield and a 14% growth rate. Cramer advises buying when the stock breaks $50.

Bank of America (NYSE:BAC): Cramer’s charitable trust owns Bank of America, although he’d rather that not be the case. He said the stock is not done going down and he’s not recommending any financial stocks. Bruce Berkowitz, “Fund Manager of the Past Decade”, is extremely bullish about BAC.

Flowserve (NYSE:FLS): Even though the stock is trading near 52-week lows, Cramer prefers Honeywell (NYSE:HON), which has a 3% yield and trades at 14 times earnings.

Xcel Energy (XEL): One of Cramer’s favorite utilities, Xcel Energy yields 4.1%. Cramer said the strong yield represents safety and growth. Xcel has a $12 billion market cap and trades at 14.9 times earnings.

Brown & Brown (NYSE:BRO): Cramer thinks Brown & Brown is a good insurer, but he’s not recommending it because it is a financial, at the end of the day. The insurer yields 1.8% and trades at 16.8 times earnings.

Entegris (NASDAQ:ENTG): Cramer has been recommending tech stocks since the seasonal bottom in mid-September, and gives this semiconductor a "buy" recommendation. Entegris has a $945 million market cap and trades at 9 times earnings.

Kirby Corporation (NYSE:KEX): This barge company ships oil and Cramer gave it a buy recommendation. Kirby has a $2.98 billion market cap and trades at 22 times earnings.

Chevron (NYSE:CVX): Cramer’s charitable trust owns Chevron, and Cramer continues to boast about the stock’s growth prospects and 3.3% yield. This oil company has a $189 billion market cap.

Bristol Myers (NYSE:BMY): Cramer continues to recommend this pharmaceutical, saying it’s one of the best stocks to own in this environment because of good growth and a great yield. Bristol-Myers has a 4.25% yield. Jim Simons of Renaissance Technologies increased his position by 51% (see more of Simons’ picks).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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