Jim Cramer's Mad Money In-Depth, 1/7/08: Chatting up Chattem

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Monday January 7. Click on a stock ticker for more analysis:

Better than Bonds: Bristol-Myers (BMY), Altria (MO), Verizon (VZ), Dow Chemical (DOW)

Even in a down market, this is not the time to abandon stocks; bonds are so heavily taxed (28%) that dividend yields from stocks (with only a 15% tax rate) are preferable. Among Cramer's dividend picks are Altria, which will spin off its international division in the spring and has a yield of 3.8%, Verizon, a defensive stock which yields 3.97% and is reaching 18 million households, BMY, which has a high yield of 4.7% and impressive earnings, and Dow Chemical which has dropped 16% and yields 4.52%.

Going South: Petrobras Energia (PZE)

While PZE is not for the "faint of heart," "high oil is high oil," said Cramer and believes the rewards which PZE may provide outweigh the risks of investing in Latin America. Cramer says energy in Argentina is "heating up" is fetching higher prices and PZE currently receives little attention from analysts.

Related: Christopher Ecclestone believes Latin America will rise from the worldwide credit debacle.

Chatting Up Chattem (CHTT)

Cramer went shopping at his local drug store for a recession stock and found Chattem, producer of Icy Hot, Pamprin, and many other popular names. The secret of CHTT's success lies in the amount of aisle spaces its brands occupy and in its strategy of buying embattled brands from other companies and revamping them. The stock has doubled since Cramer's initial recommendation, and he believes Chattem could be an attractive takeover target. The company solidly beat its estimates, saw a 51% rise in sales and could reach $84.

Related: Vahan Janjigian takes a look at CHTT's pipeline and stability as a defensive stock.

CEO Interview: Peter McCausland, Airgas (ARG)

Peter mcCausland challenged the assumption that industrials are necessarily weak in a slowing economy, and noted the company is growing organically and through acquisitions, is seeing strength in all of its divisions and healthy demand. Cramer is also a fan of Airgas, and says down 8%, it is a buy.

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Comments

[NormanLepoff, M.D.]

It is very hard for me to pay any attention to Cramer any more. I was just looking at some of the biotechs he recommended at their 52 week highs that are now at their 52 week lows like DNA and AMGN. The list is too big to state all of his bad calls here. Remember AMD, as another example? He "blessed" it at 26. Look where it is now. The above companies are good, but not because of Cramer. New investors beware of Cramer. That is my advice to you all.