Say Si to Sociedad - Cramer's Mad Money (6/16/08)

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Monday June 16.

Not Quite a Done Deal: XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI)

Cramer’s campaign for the merger between XM Satellite Radio and Sirius might finally be drawing to a close as FCC Chairman Kevin Martin gave his support for the deal. However, the drama will continue and the vote will be tight as five commissioners make the decision. The issue is not about choice, Cramer explained, because people can just download music. Since XMSR is unlikely to survive without the merger, it is a question of whether satellite radio will survive at all. Cramer thinks the combined entity will be a good long-term play and will form a powerhouse that will give terrestrial radio a run for its money.

Chile’s Triple Play: Sociedad Quimica (SQM) Chile’s economy is red hot, and Cramer noted the country’s GDP growth is more than twice that of the U.S. and the Chilean peso has gained 8% against the dollar. SQM is not just a play on Chile but has ag exposure and produces potassium nitrate fertilizer which is cheaper than potash. The company is also growing its lithium business by 40%, which will mean more exposure to lithium batteries used for cars. The Street is nervous about the company because 62% of it is owned by Potash and Julio Ponce, but Cramer is not intimidated; “I think you should say sí to Socieded Quimica,” Cramer said.

Dang Yang: Yahoo (YHOO) Joe Nocera, New York Times columnist and author of the new book Good Guys and Bad Guys appeared on Mad Money and suggested Cramer replace AIG’s CEO Martin Sullivan, who was dismissed recently, with Yahoo’s Jerry Yang on Cramer’s Wall of Shame. The company hasn’t had a new idea in five, six or seven years, said Nocera, it is getting its lunch eaten by Google and it turned down Microsoft’s buyout offer out of spite, heedless of Yahoo shareholders. Nocera added if Icahn were to walk away, the stock would collapse and Yang’s days are numbered. Cramer gave his support on Nocera’s bearish view on Yahoo.

Mad Mail: Precision Castparts (PCP), Ram Energy (RAME) A viewer questioned Cramer’s wildcat pick Ram Energy, because it has a $351 million debt. Cramer says the company is “drilling like crazy” and if it needs to take some debt for that, so be it. Cramer told another viewer to stick with Precision Castparts.

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Comments

[User 168418]

I support Martin for swinging for the merger of sirius and XM, but it would have been best if all the commissioners made decison for approval or not before having a press release of any kind since they as a group have to approve by at lease a 3 to 2 yote. A little more time and it should be over and the merger will go thru.