Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday June 20.
With Fed Chairman Ben Bernanke indicating that he will keep interest rates low for at least the next couple of years, stocks will continue to be the best investment. Bond rates will be so low that the advantage of dividend stocks will be obvious. Even stocks performing poorly seem to have the floor of their dividends beneath them. Procter & Gamble (PG) pre-announced that business was worse than expected, but the 3.72% dividend cushion kept the stock from dropping too low on the news. Walgreen (WAG) has opted to buy a minority stake in British pharmacy Boots, while the perception is that management should fix the domestic business before investing overseas. However, with a yield of 3.8%, there may be investors who will stay in WAG in spite of the negatives. If a stock has a strong yield, not all investors will want to sell, even if the news isn't good.
Cramer took some calls:
Bank of America (BAC) is doing the right thing by cleaning up the balance sheet, but JPMorgan (JPM) is the better stock right now. While Cramer called CEO Jamie Dimon a "loser" a couple of weeks ago, Cramer defended his statement by saying "of course, if he lost that much money, he was a loser... but now he's ready to be a winner, and it's a new season for JPM."
Procter & Gamble (PG): "I'm flabbergasted by how badly it's doing."
As summer goes into full swing, investors should keep in mind that summer is the weak season for tech. Add to this pattern the weakness in Europe; 20% of tech sales are on the Continent. In addition, there has been some tepid news coming out about the sector: Oracle (ORCL) said Europe was not so bad, but the only reason the stock rose was that earnings were not as terrible as expected. Microsoft (MSFT) now has a tablet, which is not a positive announcement for competitors Dell (DELL) and Hewlett Packard (HPQ). Apple (AAPL) has a gap in its product shift between iPhone 4 and iPhone 5. Google (GOOG) is too levered to Europe. While Cramer would not sell all of these positions, he would at least take profits in all major tech stocks apart from Apple, since it has some major catalysts signaling a strong second half of the year. In spite of the product gap, the iPhone 5 will generate excitement, along with Apple TV. Cramer thinks Microsoft's tablet is bad for Dell. He would take profits in Microsoft, wait for it to decline to $29, and then buy more.
Bill Maloney, Vice President, Statoil (STO)
Statoil (STO) is the largest offshore operator by production and has a 4.4% yield. This Norwegian company has the best of both worlds, with growing international assets and significant exposure to onshore domestic shales, like the Bakken and the Eagle Ford. This stock isn't as risky as other European stocks, since Norway has its own currency and won't necessarily be brought down by problems with the euro. When asked why the company has so much exposure to natural gas, Vice President, Bill Maloney, replied that he believes natural gas may become the fuel of choice, although things are "a bit rough at the moment" for the fuel. Cramer likes Statoil's growth and dividend.
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