Do You Believe in Minerals? Cramer's Picks (6/4/08)

by: Miriam Metzinger

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Wednesday June 5.

On the U.S.S. Harry Truman: Eaton (NYSE:ETN), Parker-Hannifin (NYSE:PH), Emerson (NYSE:EMR)

Cramer dismissed Wednesday rise in tech stocks as a “countertrend rally,” and said tech rallied by default on the decline of commodities. He reiterated his preference for “new tech” infrastructure plays and miners; "I believe in minerals, I believe in the companies that mine them, and I believe in the companies that move them," he said. Cramer would take gains in “old tech” and buy “new tech.” He recently spent a brief vacation on the S.S. Harry Truman where he observed flow control and hydraulic power systems which are produced by companies like Eaton, Parker-Hannifin and Emerson, three stocks Cramer recommends buying.

Intel versus. Caterpillar Chemical and Mining Co. of Chile (NYSE:SQM), Caterpillar (NYSE:CAT) and Intel (NASDAQ:INTC)

Some other stocks Cramer noticed on his U.S.S. Harry Truman cruise were ion battery play SQM and Caterpillar. He discussed the difference between INTC, which rallied on Wednesday and Caterpillar. Both have a 12% growth rate, but CAT’s number, unlike Intel’s is accelerating. Intel’s success is based mainly on the failure of its main competitor, Advanced Micro Devices, whereas Caterpillar is flourishing because of strong overseas growth. Concerning oil, Cramer reminded viewers he suggested taking profits at $130. He would buy the stocks low as oil dips below $120.

CEO interview: David Aldrich, Skyworks Solutions (NASDAQ:SWKS)

Skyworks, a chip producer for wireless devices, hit its 52-week high on Wednesday, and is up 69% since Cramer’s recommendation in 2005. Aldrich told Cramer that he expects the company to hold 50% of the 3G market and 80% of Research in Motion’s Blackberry EDGE business by the end of 2008. Not only does SWKS work with the major wireless players but is also expanding into the automotive, medical and energy management industries. Skyworks uses advanced technology to produce a battery which is cheaper for the customer and does not deplete the life of the phone; ““We like complication,” Aldrich said, “because we’re trying to simplify our customer’s life so they can focus on features and not worry about the semiconductor content that makes it work.” Cramer thinks SWKS will continue to deliver, and is one of the few “old tech” stocks he likes.

Mad Mail: Ingersoll-Rand (NYSE:IR), First Solar (NASDAQ:FSLR)

A viewer asked Cramer what to own if the Fed raises interest rates, and while Cramer doesn’t think this is likely, he would own bank stocks if he thought there would be a rate hike. Another viewer asked how to play the shortage on refrigerated meat containers and Cramer says IR produces a ThermoKing brand. The stock has had a run, and Cramer isn’t sure he would buy it, but he suggested investors do homework on IR. When asked how the price of natural gas corresponds to that of oil, Cramer gave his formula: Divide the price of crude by six. They both tend to rise and fall together, although this is a bit counterintuitive. Concerning hydrogen and fuel-cell technology, Cramer said it would only be feasible if subsidized heavily. One viewer asked if Cramer’s favorite solar play, First Solar, would be negatively affected by its reliance on the rare commodity tellurium. Cramer replied; “They are locked in. They've got good prices on this material. There may be other reasons not to like First Solar, but it's not yours."

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