Jim Cramer's Mad Money In-Depth, 1/16/08: Easy as ADC

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

Altria is Smokin' (MO)

Cramer suggests defensive stocks with generous dividends and aggressive buyback programs as the best protection in the worst economy he has seen in 29 years. He discussed his old favorite, Altria, which has risen 11% since October and has a 3.8% dividend. Cramer predicts the announcement of the company's breakup into international and domestic businesses will be public in two weeks, and notes MO's 28.6% stake in SABMiller as a "hidden asset." In short, Cramer's message is "just buy Altria."

ADC Telecommunications (ADCT)

Even though the stock has done nothing since his December recommendation, Cramer says ADCT, which supplies products to cable and telecom companies, is too cheap and its estimates are too low. ADC grows at 8% but is priced at 10 times next year's earnings, which makes it inexpensive, said Cramer. He predicts this neglected tech could rise by 60%.

CEO Interview, Ray Milchovich Foster Wheeler (FWLT)

Ray Milchovich said his company is not affected by oil price because its projects are geared towards the long-term. He added its current contracts are secure and its fundamentals are solid. Cramer would buy FWLT if it goes under $122 a share.

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Comments

[NormanLepoff, M.D.]

Sombody should track Cramer's picks. Remember the MON Back on MON? How about AMD, SHLD, FCX, LMC. C, and the dozens more he failed us on. Only a fool would pay attention to Jim Cramer!!!!

[Victhom]

Hey Jim have you heard that Rite Aid (RAD)was a takeover target at $3.50???

Read this....
The Capital Research analyst, stated that the title of Jean Coutu Group may rise sharply if Rite Aid (NYSE: RAD), American Chain Drug Stores, owned 31.7% by Jean Coutu Group, was acquired.

As I mentioned Jean Coutu Group holds 31.7% of Rite Aid or approximately 252 million shares, which closed yesterday at Cap $ 2.2 Americas. The real value of the investment is approximately 560 million Americans.

What nobody said it and the problem is the following is that the same shares of Rite Aid worth $ 6.38 to June 29, 2007.

In other words, in six months, the placement du Groupe Jean Coutu melted like snow in the sun. The course is worth 3.5 billion American (3731 billion Canadian), the investment has grown to 560 million US-dollar (565.54 million).

What was the actions of the Jean Coutu Group 6 months ago? At the same time placing Rite Aid worth 3,731 billion Canadian, or at June 29, 2007, shares of Jean Coutu Group worth $ 15.50.

So in closing price yesterday, while the placement du Groupe Jean Coutu in Rite Aid founded nearly 85% (in Canadian currency), the shares of Jean Coutu Group lost almost 28%.

Some analysts believe the US drugstore chain Rite Aid could be acquired by a competitor. Assuming that possibility and the purchaser would pay approximately $ 3.50 reflecting a fairly reasonable premium of nearly 45% over the closing price yesterday of $ 2.22.

If this situation took place, the Jean Coutu Group therefore receive 789 million Americans for all its shares of Rite Aid.