Jim Cramer's Mad Money In-Depth, 4/3/08: King of Beers Dethroned

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program,Thursday April 3. Click on a stock ticker for more analysis.

First Solar (FSLR)

While Cramer’s backing of FSLR has met with some controversy, not least because the solar sector has been volatile, Cramer stands behind his long-standing recommendation and gave his thesis on why First Solar is best-of-breed. The company does not need subsidies for expensive silicon technology, but uses film-based panels instead. Although silicon is more efficient now, film technology is catching up and is cheaper. In addition, FSLR can mass produce its panels and sell them for industrial use, thus freeing the company from the capricious consumer and housing. Cramer says FSLR’s panel technology could be what Intel’s Pentium technology was in the 90s, and it could make mincemeat out of the competition. All three Presidential candidates have backed solar as a clean energy alternative and with oil at $100 a barrel, there is a huge incentive to invest in solar. CEO Michael Ahearn has already had talks with utility companies and has been drumming up “initial relationships and some pilot projects.”

Sell Block: Anheuser-Busch (BUD), Molson Coors (TAP)

Cramer advised selling BUD and buying TAP. Although BUD has 47% market share, TAP’s deal with SABMiller will enable the company to bring up its share from 29%. TAP is cheaper, since its growth rate is 12.5% while BUD’s growth is at 8.2%, although both trade at 15 times 2009 earnings. 55% of TAP’s business is international, while BUD lags in global growth at just 7%.

CPFL Energy (CPL)

Cramer likes CPL because it is a natural utility monopoly in Brazil, which has a GDP growth rate of 5.6% and a middle class that keeps consuming more electricity. CPL has 13% of the market and grows at 16% a year. The company adds customers at 5.2% a year and is planning to double its electric capacity in the next five years. CPL’s dividend is a generous 7.8% yield.

Mad Mail: Ebay (EBAY), Valero (VLO)

A caller asked why Ebay had a higher valuation than VLO when the latter company has higher earnings per share. Cramer called this a “classically brilliant question” and said stocks are valued according to the future and not the present. VLO is losing money on each barrel of oil and EBAY is growing profits, hence its Merrill Lynch upgrade.

Final Points: Research in Motion (RIMM), U.S. Steel (X)

Cramer clarified his recommendation of RIMM, saying he would wait for a dip before buying. However, he would still buy X although it is up 13 points

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