Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program,Monday April 7. Click on a stock ticker for more analysis.
It isn’t just natural resources that make Russia a great potential investment, but companies such as MTL which use those resources are on fire, said Cramer. Mechel is working to meet increasing steel demand in the former Soviet Bloc and Asia. Cramer likes MTL’s vertical integration; the company produces 100% of the coal, 92% of the iron ore and 55% of the nickel needed to make its own steel. The company is therefore relatively immune to commodity price increases. Since MTL is only 13 points off its high, Cramer would wait five days for a dip before buying.
Formento Economico Mexicano (FMX)
While the U.S government is offering a stimulus package that doesn’t benefit business directly, Mexico has developed a more effective plan of creating generous tax rebates for businesses, reduced electricity costs and benefit payments. FMX, the largest bottler of Coca-Cola in Mexico, benefits from this legislation, and keeps its raw costs low by producing its own bottles and bottle caps. FMX distributes 70 soft drink brands and 31 beers in Latin America. It also owns the popular OXXO convenience stores which are “the perfect outlet for Formento’s products.” Cramer would wait for a pullback before buying.
Cramer started a new series called “Catch-Up Stocks” focusing on companies lagging behind their competitors in a booming sector. There is an increasing demand for cardboard from the U.S. given the falling dollar. LPX rose 25%, but TIN has been hanging back, in spite of the fact it is the better company, said Cramer. TIN reduces its raw costs by avoiding recycled products and will benefit from the fact that the U.S. has one of the largest uncut softwood forests in the world. Recently Carl Icahn, who holds a 10% stake in TIN, convinced it to spin off unprofitable financial and real estate segments, and the stock has yet to see a bounce from that move. An upgrade by Citigroup is also a sign that TIN is due for an upside.
Cramer said the XMSR/SIRI merger is still a year and 49 days overdue and urged viewers protest the delay of the merger. He told another e-mailer the best way to play Raul Castro’s reforms in Cuba is with FCX, because Fidel Castro confiscated a large mine. Another e-mailer mentioned a good way to get exposure to SABMiller is through MO, which is a good company with a strong yield. Cramer agreed.
Cramer finished Monday’s program by putting Hector Ruiz on his CEO Wall of Shame and said he prefers INTC.
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