Jim Cramer's Mad Money: 4/1/08: Rose-Colored Rally

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program,Tuesday April 1. Click on a stock ticker for more analysis.

Lehman Brothers (LEH)

Donning rose-colored glasses, Cramer told viewers to enjoy to current rally, but to beware of the shorts who take advantage of the repeal of the uptick rule to pick up a “Gatling gun” and demolish any stock they choose. Lehman Brothers routed the bears yesterday with its surprise secondary offering, which raised $4 billion in capital. "Up until now," Cramer said, "the financials have been running on credit and credit is a lousy weapon in this war,” but now LEH has a weapon against the bears. However, the bears could attack the market at any time, especially without the protection of the uptick rule.

Applied Materials (AMAT)

Although Cramer has not been thrilled with semiconductors, particularly AMAT, he now likes the stock because of its underreported connection with solar energy. Not only is the company producing solar panels for houses, but is set to be the “Henry Ford of solar” and mass-produce the panels for solar facilities. CEO Mike Splinter said that solar is “the greatest opportunity the company has had in many years,” and Cramer compares AMAT to Cypress Semiconductor before its successful spinoff of Sunpower. Cramer sees as much as a 50% upside in the stock.

Nabors Industries (NBR), Transocean (RIG), Chesapeake Energy (CHK)

Another stock Cramer has disliked until now is NBR, which has performed poorly but is a buy because “we are at the beginning of a new land rush in natural gas," said Cramer. The company may have another down quarter before it bottoms, as its 89 idle drilling rigs are put to use by major players such as Chesapeake Energy. NBR stands to make a “killing” when these rigs are finally contracted out and may even replace RIG as Cramer’s pet oil and gas driller. Cramer noted NBR’s valuation at just 9.1 times earnings makes it the least expensive in the sector. When it turns around, Nabors could reach $48, a 40% gain.

CEO Interview: David Snow, Medco Health Solutions (MHS)

In spite of downgrades, David Snow said Medco has a perfect bill of health after a “phenomenal” sales year with $90 billion of drugs going off patent by 2015, $5 billion in sales of new businesses and a 5% increase in guidance. Although the stock has declined 11% since Cramer recommended it in September, MHS should see an upside, according to Snow; “Every year, someone finds something to worry about, and we work our way through it. We are going to do that again.” Cramer agrees with David Snow and called MHS

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