Cramer's Mad Money - 5 Rumor-Proof Stocks (6/12/12)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday June 12.

5 Rumor-Proof Stocks: B&G Foods (NYSE:BGS), Dr. Pepper Snapple (NYSE:DPS), Sherwin Williams (NYSE:SHW), Lumber Liquidators (NYSE:LL), Arena Pharmaceuticals (NASDAQ:ARNA). Other stock mentioned: Navistar (NYSE:NAV)

With rumors that deposits in failing European banks might be insured with euros, there were some bright spots in the macro news, but not enough to put negative projections on the health of Europe's economy at bay. While the Dow was up 163 points on Tuesday, Cramer warned that rumors may continue to drive stocks for some time. He discussed some "rumor proof" stocks that may be worth buying: B&G Foods (BGS), Dr. Pepper Snapple (DPS), Sherwin Williams (SHW), Lumber Liquidators (LL), and Arena Pharmaceuticals (ARNA), which is close to a 52 week high, but may still be a buy, since the FDA seems likely to approve its anti-obesity drug. Not every stock is vulnerable to rumors about the macro situation, and Cramer would look to these stocks for some degree of safety.

Cramer took a call:

Navistar (NAV) is speculative, and Cramer would buy it with deep in the money calls.

Dollar General (NYSE:DG), Dunkin' Brands (NASDAQ:DNKN), Darling (NYSE:DAR), Panera (NASDAQ:PNRA), Chipotle (NYSE:CMG), Brinker (NYSE:EAT)

Domestic security stocks are working in the current economic environment; Dollar General (DG) has risen 22% since the crisis began, and Dunkin' Brands (DNKN) has seen a 35% gain. Not only do the companies have no or very little European exposure, but they have little California exposure. The fact that Dollar General only has 50 stores in the state, out of thousands of locations, and DNKN is opening its first store in California, shows that both companies represent a regional to national story, and have plenty of room to expand. Both DNKN and DG have done highly successful secondary offerings in the past year, all of which were buying opportunities. These stocks represent what is working in the U.S. stock market.

Cramer took a call:

Darling (DAR) is not a stock worth buying, when, in the restaurant sector, Chipotle Mexican Grill (CMG) and Panera (PNRA) are great growth stocks, and Brinker (EAT) is a good choice for value investors.

Off The Charts: Have We Finally Bottomed? Stock discussed: U.S. Steel (NYSE:X)

Cramer discussed the "gutsy" call from technical analyst Carolyn Boroden of that the S&P 500 is creating a floor in the 1259-1269 range. Boroden's technique is to pay attention to "measured moves" and fibonacci ratios that indicate trends in the way stocks move. On June 4th, the S&P 500 fell the same amount it fell in October, and the decline in October was followed by a steady rally upward. Boroden thinks the S&P 500 will not fall below 1259, but if it does, it could decline to the 1207-1214 level (a scenario Broroden and Cramer think is unlikely). According to this measured move theory, the S&P 500 could decline another 4% at the most, and it could break out upward up to 11%.

Cramer took a call:

U.S. Steel (X) is not a buy, nor are other steel stocks, since the Chinese "dumping of steel is out of control."


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