Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Tuesday October 2. Click on a stock ticker for more analysis:
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Canadian Invasion: TD Bank’s (TD), Commerce Bancorp (CBH), National City (NCC), KeyCorp (KEY), New York Community Bancorp (NYB), Comerica (CMA), Hudson City Bank (HCBK), M&T (MTB), BB&T (BBT), Fifth Third Bancorp (FITB), Capital One Financial (COF)
Cramer thinks TD Bank's acquisition of Commerce Bancorp is just the beginning of a Canadian Invasion, as the Canadian dollar is strong and stock prices are solid. “Bank of Nova Scotia, Canadian Imperial, Bank of Commerce, Royal Bank of Canada... Even Banco Montreal...have reasons to invade,” said Cramer adding the U.S. government is more amenable to Canadian than an Arab or Chinese takeover. Canadian. Banks “can’t eat just one” American Bank if want full Northern exposure. While Some thought TD Bank’s payment of 2.8 times book value for Commerce was "silly generous,” Cramer disagrees and expects big offers for National City, KeyCorp, New York Community Bancorp, Comerica, Hudson City Bank, M&T, BB&T and Fifth Third Bancorp. In spite of its consolidation of recent acquisitions Greenpoint and North Fork, Capital One Financial could fetch a 160% premium if taken over, said Cramer.
CVS’s decline on Walgreen’s poor earnings report shows the market is “dumb as plywood,” said Cramer, since the two companies are fundamentally different. Walgreen blamed its low revenues partly on lowered drug reimbursement rates, where as CVS has acquired Caremark, which makes reimbursement payments and benefits from the plethora of generic drugs which have been hurting Walgreen. Cramer elevated CVS to “best-of-breed” status for its foresight in buying Caremark.
Related: Dividends Matter analyzes CVS Caremark.
Scoreboard of the Web: Comscore (SCOR)
Looking for another Aecom, Cramer discussed SCOR, “the scoreboard of the internet.” Comscore measures consumer behavior on the Web, the way Neilson and Arbitron track consumer activity in other media. The existence of Omniture does not render SCOR redundant, because of the difference between internal numbers and external numbers; Comscore provides information about other websites and advises companies on where to place their ads. SCOR has great growth potential and may be an attractive takeover target for Neilson. It is also a “natural monopoly” with its profitability and visibility. Recently, Credit Suisse and Deutsche Bank gave SCOR “buy” ratings.
Related: Zachary Sheidt discusses 7 ways SCOR is growing its business.
CEO Interview: George Feldenkreis, Perry Ellis (PERY)
Feldenkreis discussed the successful revitalization of the Penguin brand and expects Perry Ellis to grow from $40 million to $200 million in five years, partly due to expansion in Asia. The company has penetrated into Vietnam and has licensing agreements specific to Korea and Taiwan, as well as additional agreements with China and India. Cramer concluded; “They've got a compelling story. Maybe PERY is for you... it's just not for me.
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