Jim Cramer's Mad Money In-Depth Stock Picks, 7/16/07

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Monday July 16. Click on a stock ticker for more analysis:

Eurovision Stock Contest: Philips Electronics N.V. (PHG)

Cramer is dedicating a segment this week to European stocks because they are hot right now and, unlike American stocks, are resistant to the rising interest rates in their respective countries. He would not choose an ETF, since they do not contain best-of-breed companies, but are filled with "Eurotrash" he said. Monday's pick is PHG which Cramer says worth 20% more than its current price. In addition, this manufacturer of high-tech gear has a 20% upside, although Cramer warns investors not to pay too much for the stock.

Related: Stockerblog discusses Dutch stocks.

Ride the Wild Bull: Woodward Governor Co. (WGOV)

Cramer says few have heard of WGOV until now, and the company is getting attention because it has doubled in the past two years. He adds the aerospace cycle is going to be long, and stocks in wild bull markets can double twice. Cramer adds WGOVis also in a double sweet spot because it has one foot in the aerospace sector and one in energy, and it resembles Honeywell and Johnson Controls combined.

Going to Pieces: American Standard (ASD)

Cramer says he doesn't care about ASD's earnings report on Wednesday, and is interested in ASD because it is getting ready to spin off Wabco, its vehicle systems business, followed by its kitchen and bath business. ASD will then become Trane, a heating, ventilation and air-conditioning company. Cramer thinks its possible a private equity company will swallow ASD whole before the spin-offs, and notes Deutsche Bank has said ASD is worth $70 in spite of its $61 price tag. Cramer predicts the stock will rise $4 in the short-term, and would buy half before ASD reports on Wednesday and half on a decline.

Related: William Trent comments on ASD's Wabco spinoff.

CEO Interview: Bruce Williamson, Dynegy (DYN)

Bruce Williamson discussed the difficulty of building power plants and how supply is static while demand is increasing. DYN's current power plants will benefit from "rising value and rising economic performance." Cramer said Williamson is a moneymaker and DYN should be valued not just in the short term, but based on all of its plants. "You'll get a much higher price," Cramer said.

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Comments

[tiagoam:]

Is Philips tired of Brazil?

I saw in Brazilian press today numerous releases from Philips, in all of the country's most important newspapers, in which the company's Brazilian unit and its CEO show their support for a movement called "Cansei" (Portuguese for "I'm tired").

I suspect that, unbeknownst to its investors, Philips is endorsing a political movement, and a very controversial one.

By adhering to "Cansei", Philips takes a stance in Brazilian politics in the least honorable way possible: by participating in a movement designed to be a political low-blow at the recently re-elected president of Brazil.

To support such conclusion, it suffices to describe the movement's announced objective and their course of action: "Cansei" states it is against government corruption, government inefficiency, violence, unemployment, among other issues, but, as a form of protest, they propose a minute of silence in the memory of victims of a flight that recently crashed in a Sao Paulo, Brazil, airport, killing 200 people.

That accident killed a national parliament minority leader, and generated a significant media and politicians outcry against the recently re-elected Brazilian government, from suggestions that the airport's runway was improper for landings to accusations of corruption and disdain for middle-class Brazilians.

It's still early to know whether those complaints are justified, some of them are just politics anyway and, as such, will be matter of hot controversy throughout the years.

But having a company endorse a political movement just doesn't seem sound, anyway, irrespectively of its correctednes, which seems to be, to a significant part of Brazilian population, at least, very questionable.

2007 Jul 31 06:57 PM

[fmendes:]

Stop your spamming non-sense. This is not a political site. In a democracy, anyone should have the right to protest the government, including Philips executives.

2007 Aug 10 08:06 PM

[fmendes:]

Stop your spamming non-sense. This is not a political site. In a democracy, anyone should have the right to protest the government, including Philips executives.

2007 Aug 10 08:05 PM