Cramer's Mad Money - The Next Bank of America (6/12/09)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday June 12

Huntington Bancshares (NASDAQ:HBAN)

It wasn't long ago that many feared Bank of America was doomed to the fate of nationalization. Now that BAC is back on its feet, Cramer suggests investing in a financial with a higher risk and return. Huntington Bancshares is showing strength after making a secondary offering many feared would merely dilute its shares. However, the secondary offering has been successful in raising capital for the bank, and HBAN already had $324 million to show for its $3.60 a share offering. In addition, the company is saving $100 million through cutbacks and is raising the dividend. Huntington is benefiting from insider buying as well.

Revenge of the Nerd Stocks: Abbot Labs (NYSE:ABT), Baxter International (NYSE:BAX), Clorox (NYSE:CLX), Verizon (NYSE:VZ), AT&T (NYSE:T), Home Depot (NYSE:HD)

Cramer declared the revenge of the nerd stocks, those names that have been performing well as The Street has "yawned in their faces." Defensive stocks rallied not just because of Clorox's raised dividend or because J.P Morgan upgraded Baxter, but because of oil's rise above the $72 level and the fact that investors have yet to hear any really good news. When gas prices were at $4.50 a gallon, defensive stocks performed well, and may repeat this trend. Home Depot's comment that the economic environment was merely "less bad" expresses the feelings of cautious consumers who want to see more proof before they believe in a recovery. Until then, the "nerd" stocks may run the show.

TriQuint Semiconductor (TQNT)

While Cramer's favorite seminconductor is still Qualcomm, and he admits that TriQuint is a third-tier company, he still thinks TQNT has significant upside potential. TriQuint makes components for smartphones and wireless networks and has exposure to Apple's iPhone; the company makes $3 for every unit sold. TriQuint can also benefit from China's stimulus package. The company reported a worse-than-expected quarter in April, but raise its second-quarter guidance because of increased demand. Cramer predicts revenue growth of 18% to 26%, and notes the balance sheet is solid and the company has plenty of cash. Cramer urges investors to get in early and buy TriQuint.

Wall of Shame: UAL Corp Glen Tilton (UAUA)

While Cramer has vowed never to recommend an airline anyway, he thinks United Airline's parent company UAL deserves special mention, given the poor execution of CEO Glen Tilton. The company's share price in February was $35 and has fallen to $3.83, an 89% decline. While other airlines have also seen their share prices drop, the fall has only been around 60% for these other companies. The money saved by cost-cutting is being used to repair older planes rather than grow the fleet, and Tilton's attempts to save or sell the company have failed.


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