Jim Cramer's Mad Money In-Depth, 3/26/08: Back to School at Penn State

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Includes: COP, DUK, ED, NKE, SUN, VLO, X
by: Miriam Metzinger

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program,Wednesday March 26. Click on a stock ticker for more analysis.

U.S. Steel (NYSE:X)

Consolidation is the key to steel's success, said Cramer, who noted there were 12 domestic steel companies in the 1980s, but only three today, and more is less when it comes to steel performance and value. U.S. Steel is one of Cramer's perennial favorites, and although it has risen 149% since January 2006, it is still attractive, since the company trades at only 11 times projected 2009 earnings. John Surma is dealing with the challenge of cheap imported steel by increasing production, and signing new contracts. The weak dollar and higher freight costs are encouraging demand for domestic steel, and Surma is not worried about a recession, since inventory is under control. The growth of the middle class in emerging market countries is also a boon to U.S. Steel; “There’s no really good way to improve life without using large amounts of steel,” Surma said.

Pitches from the Nittany Lion Fund of Penn State's Smeal College of Business: Nike (NYSE:NKE), Exelon (EX), Duke (NYSE:DUK), Con Edison (NYSE:ED), Allergan (NYSE:AGN), Raytheon (NYSE:RTN)

The Nittany Lions manage $4.5 million and have beaten the S & P 500 since the club's inception in 2005. Morgan from New Jersey likes Nike for its international exposure and catalysts. Cramer agrees, but would take some off the table. Blaine touted Exelon for its nuclear energy and high dividend. Cramer has some questions about its nuclear business, but likes the company along with Duke and Con Edison. Rebecca is bullish on Allergan on its Botox and lap-band, but Cramer says he has gotten burned before by the stock because of the embattled healthcare sector. He said he will wait and see how AGN performs the next quarter. Lee discussed Raytheon, since he expects defense spending to increase and likes the company's balance sheet and buyback. Cramer agreed and is also bullish on RTN.

Pop Quiz for Cramer: Sunoco (NYSE:SUN), Valero (NYSE:VLO), ConcoPhillips (NYSE:COP)

Karen wanted to know why oil refiners are doing poorly with oil rising in price. Cramer responded refiners are buying crude for less than they can sell it, and as long as prices are high, there are fewer profits. He likes Valero, but recommended getting natural gas exposure with COP.

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