Jim Cramer's Mad Money In-Depth, 1/31/08: Disney's Mickey Mouse Downgrade

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday,January 31. Click on a stock ticker for more analysis:

Ralph Lauren (RL) and J.C Penney (JCP)

Cramer said he was including homebuilders, financials and retailers in his little black book of loved stocks. One may wonder why there was a selloff after the rate cut and before the eventual rally, and Cramer attributes the decline to thoughtless negativity which does not reflect the fact that the "cycle has turned." He would buy JCP, down 41% year-over-year and RL, down 26% on two "undeserved" downgrades, before the February 19th launch of American Living, JCP's and RL's joint venture. "I call it a kind of aspiration, apparel and home products game... and it's going to be huge. It's a way of feeling rich when you don't have any money." Cramer likes the balance between high-end RL and lower-end JCP and believes JCP CEO Mike Ullman that American Living will be a billion dollar concept.

Disney (DIS)

Cramer called Citi's downgrade of Disney a "miscarriage of justice." The analyst was concerned about the sustainability of Disney's theme parks, which comprise only 22% of the company's revenue; "Citi only talks about DIS's theme park business. Nothing about their cable properties, broadcasting, DVD sales or film... How could he not mention ESPN?" DIS' CFO brought data proving the theme parks are doing better than they were last year. Cramer notes Disney has a 15% long-term growth rate and trades at a mere 13.8x earnings; 'I happen to believe it is the right time to buy DIS for the next 12 days, let alone the 12 months... let alone the 12 years.'

CEO Interview: Jack Cummings, Hologic (HOLX)

Cramer would make an exception to his usual rule not to buy and hold in the case of HOLX, a company that specializes in "diagnostic and medical imaging for mammography, and for osteoporosis," since there is a "breast cancer epidemic." Jack Cummings said the company has 60% market share in digital mammography and is two years ahead of the competition. Whereas traditional mammography has 70% penetration in the U.S, digital mammography has only 30% penetration. Cummings is pleased with the recent acquisition of Cytek and is confident about international growth.

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