Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Friday June 6.
Rubble Stocks: Walmart (NYSE:WMT), Brown-Forman (BF-B), Copart (NASDAQ:CPRT) and Integra Lifesciences (NASDAQ:IART)
When the going gets tough Cramer tells investors to get going and to look for bull markets. Friday’s action was the worst since March 2007, when he recommended four “rubble stocks”: General Cable, Chemed, First Solar, and Akamai. These picks increased an average of 16.4% a month after the drop. Cramer thinks picking rubble stocks will work again, and he choose Wal-Mart, Brown-Forman, Copart and Integra Lifesciences. Wal-Mart is still a great play on the declining economy and is cheap, falling 2.3% on Friday after the steady rise following its earnings report on May 13. Brown-Forman is a buy on a 1.7% dip, and the company’s international exposure protects it from domestic weakness. Copart is doing good business salvaging cars, and the company beat estimates by 8%. Copart continues to grab market share, to benefit from rising steel prices and is opening 10 to 15 new locations. Cramer would buy Copart on its 1.5% dip. Integra Lifesciences had a 22% upside surprise on Wednesday, and Cramer thinks it has further to go. The stock dipped 10 cents on Friday.
IR Makeover: Ingersoll-Rand (NYSE:IR)
Ingersoll-Rand has been liberating itself from the vicissitudes of the domestic economy by getting rid of its cyclical businesses and making the strategic secular acquisition of heating-ventilation and air-conditioning company Trane. As a result, Cramer says “This company is almost completely unrecognizable from where it was a year ago.” IR is now a “new tech” name with solutions for food spoilage (which is at a shocking 40% in Asia) and energy conservation. Its new heating and cooling systems will be in great demand domestically and abroad, and Cramer declared IR a “triple-buy” even in this dismal market.
Speculation Friday; Exide Technologies (XIDE), Ener1 (NASDAQ:HEV)
Energized by the 4.6% rise in his May 21st battery pick, EnerSys, Cramer decided to recommend other stocks in the sector, but admitted they are a bit more risky. Initially Cramer was worried about recommending Exide Technologies because of its exposure to the auto industry, but the stock is up 10%, and Cramer thinks it has farther to go, especially since only one analyst covers it. Cramer says Exide’s lithium ion batteries are the future of the industry, and likes its overseas growth, particularly in India, where it has doubled production. HEV is more speculative, and has no products yet on the market, but should make an announcement by the end of the year. The company is currently producing lithium-ion batteries for hybrid cars and has a deal in the offing with a Norwegian car company. Cramer urged viewers to do their own research before buying.
A viewer asked Cramer if he should be bullish on KO because of the Olympics and Cramer says he wouldn’t use the Summer Games as a catalyst. Instead, Cramer likes Coke because, “They have the raw costs under control, and it’s a huge international company with a big buyback.” While Cramer is still bullish on Brazilian stocks he notes they have been punished lately but adds they are usually the first to recover. He would continue to buy GFA and other Brazilian names.
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