Cramer's Mad Money - Stay Away From The Sucker Trade (11/1/12)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday November 1.

Stay Away From The Sucker Trade. Stocks mentioned: Nike (NKE), Michael Kors (KORS), Estee Lauder (EL)

The sucker trade recently has been to short or at least be gloomy about retail. In spite of economic uncertainty, the consumer has been out buying, and the shorts have been the losers on this trade. One reason the bears have been losing is they assume that if some retailers, like Nike (NKE), are having challenges with pricing, that all footwear stocks are going to be bad. “Gloom is not a strategy,” Cramer said of those who short the entire retail sector.

Cramer took some calls:

Michael Kors is a buy, because not only is it doing well in the U.S., but it is also a strong performer in Europe.

Estee Lauder is not a stock Cramer wants to recommend.

CEO Interview: Sam Thomas, Chart Industries (GTLS)

With the price of oil rising and people feeling the pinch post-Hurricane Sandy after long lines to buy gasoline, there might be a stronger call to adopt natural gas as a bridge fuel in the U.S. Chart Industries (GTLS) makes the technology that turns regular gas into liquefied natural gas that can be exported, and it reported revenues that rose 23% year over year, but saw an 8 cent earnings miss. CEO Sam Thomas explained that business overseas was weak, but added that it takes time to make a major transition to exporting natural gas. Demand and infrastructure are important prerequisites to the natural gas adoption and export. When asked about building an additional export terminal, Thomas replied that the demand has to be stronger before another terminal can be built. Cramer thinks the challenges faced by Chart are “temporarily putting the industry on hold,” and the results of the election might provide more clarity for Chart’s story.

CEO Interview: David Henry, Kimco Realty (KIM)

Kimco Realty (KIM) is a REIT that owns and operates shopping centers, and recently, it reported a strong quarter. Revenues and earnings were higher than expected, and Kimco increased guidance. CEO David Henry discussed the strong year for the company, including the 10.5% dividend increase and nearly full occupancy rates; “Everything is flashing green now. The industry itself is recovering nicely.” Kimco is getting out of lower quality shopping centers and is increasing its exposure to higher-renters. Since the company is well-diversified, it shouldn’t be too negatively affected by closures due to the hurricane on the East Coast. One trend working in Kimco’s favor is the rapid expansion of many retailers and the their concern about lack of space due the dearth of construction. Cramer congratulated the CEO on a strong quarter and said, “You know how much I like growth.”

Is China Bottoming? Cummins (CMI), Joy Global (JOY), Caterpillar (CAT), Eaton (ETN), Peabody (BTU)

The Dow was up 136 on Thursday, only a few days after Hurricane Sandy devastated the East Coast. While there has been speculation that damage from the storm might stimulate infrastructure and construction, these trends are long-term, and was not the reason industrials moved up on Thursday. The Chinese PMI Report came in at 50.2, up from 49.8 the previous month. While the earnings reports so far this season had been indicating that the domestic situation was strong, Europe was weak but stabilizing and the main worries were about China, so the good news from China created a powerful upside for industrials. Stocks that rose on Thursday, thanks to China, include Cummins (CMI), Joy Global (JOY), Caterpillar (CAT), Eaton (ETN) and Peabody (BTU). Cramer thinks there may be more upside ahead for these stocks if there is continued strength in China.

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