Cramer's Mad Money - What The Bulls And Bears Are Fighting About (10/11/12)

by: Miriam Metzinger
Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday October 11.
What The Bulls And The Bears Are Fighting About. Stocks discussed: Apple (NASDAQ:AAPL), eBay (NASDAQ:EBAY), FedEx (NYSE:FDX)

It isn't just political partisanship that is dividing the country, but the rivalry between the bulls and the bears, who don't seem to agree about anything. Bulls say that improved housing and strength in retail is a sign that the hopeful employment numbers are for real, while bears think the numbers are deceptive and the rally in retail can't last. Bulls see the fiscal cliff as a small hill, while bears envision an abyss. Bears say that FedEx's (FDX) guide-down is a sign of a weaker economy, while bulls point out that management predicted a stronger year ahead and the stock is back where it was before the disappointing announcement. China is a boon to some businesses, and a liability to others. Bears question every move Apple's (AAPL) management makes in the post-Steve Jobs era, while bulls think Apple isn't finished with its glory days. As long as the bears and the bulls are duking it out, the market may see quick gains and steep declines. Investors should be careful.

Cramer took a call:
eBay (EBAY) is worth more than its current price, primarily because of Paypal.
Dean Foods (NYSE:DF): Not Just About the Price of Milk

Dean Foods (DF) is not just a dairy company, but is a way to play the healthy eating trend, especially with their winning White Wave Alpro product. The company also has a large selection of dairy alternatives, such as soy, almond and coconut milk. Cramer has been suggesting that Dean Foods spin off its White Wave division, and it seems that DF listened; the stock jumped from $12-$17 on news of a White Wave IPO, a move that is expected to make $300 million for Dean Foods. The company is now planning to sell off its Morning Star business, which sells products to food service companies. The stock has pulled back since the White Wave IPO announcement to around $14. One reason for the pullback was a downgrade on concerns of rising raw costs. However, high milk inventories and Dean’s impressive market share of 38% should be an antidote to these concerns. However the issue is not the price of milk, but the value of DF’s parts; The value of its assets would make Dean Foods worth 36-46% more than it is now. Cramer thinks DF could go to $20, or at least to $18 if it doesn’t find a buyer for Morningstar. This would mean a 23% gain.

Hot Stocks for the Fourth Quarter: Sherwin Williams (NYSE:SHW), Diageo (NYSE:DEO)

Cramer continued his week-long series featuring hot momentum stocks money managers may want to buy at the year’s end, since their clients want to see recognizable, solidly performing holdings. Sherwin Williams, up 67% for the year, with one of the best-looking charts around, and Diageo, up 30% are both great stocks to buy on the 4th quarter momentum stock trade. Money managers will want to tell their clients that they played the housing rebound with Sherwin Williams, given its strong performance. Its sales grew 9% and it increased earnings per share by 31%. The stock is selling for a multiple of 19.2, with a 16% long-term growth rate.

Diageo has winning brands like Johnny Walker, Smirnoff, Bailey’s, Guinness and Captain Morgan, as well as many others. Of all the liquor stocks, they have the least exposure to Europe, 21% of the business and the greatest presence in emerging markets, which generate 40% of sales. The company has 7 of the 20 top liquor brands in the world.

CEO Interview: Sam Susser, Susser Petroleum Partners (SUSP). Other stock mentioned: Susser Holdings (NYSE:SUSS)

Susser Petroleum Partners (SUSP) is a high-yielding MLP that runs convenience stores. It yields 7.2% and generates revenues through long-term fee-based contracts. The company has significant market share in Texas and plenty of opportunities to expand. SUSP was spun off by Susser Holdings, which has restaurants on its premises, and is vulnerable to retail cycles, while SUSP, which is focused mainly on fuel distribution, is more stable. While SUSP has plans to expand rapidly, it is concentrated in Texas and neighboring states where it already has a significant footprint, but more room to grow. Cramer thinks Susser Petroleum is an ideal dividend stock to hold for the long term.


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