Cramer's Mad Money - The Hottest IPO of 2009 (9/22/09)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday September 22.

The Hottest IPO of 2009: A123 Systems (AONE), General Electric (NYSE:GE), Qualcomm (NASDAQ:QCOM), Motorola (MOT), AES (NYSE:AES), Black&Decker (BDK), Daimler (DAI)

While Cramer prefers natural gas to lithium-ion batteries, he thinks these auto batteries are hot right now and companies producing them may see the same gains as ethanol producers did over a year ago. The number of electric auto models is expected to grow from 19 to 150 by 2014 and 200 by 2020. The lithium-ion battery market may be worth a mere $31.9 million now, but it will likely be valued at close to $22 billion by 2015 and $74 billion by 2020.

While A123 isn't profitable yet, it has major backing from General Electric, Qualcomm, Motorola and AES. Its list of customers includes BMW, Delphi, Shanghai Automotive, Daimler and Volvo. It also supplies Black&Decker and Gillette with batteries for other products and provides emergency backups for electronic grids.

A123 is selling 25 million shares at $10 and $11.60, and Cramer says a good range for the stock is between $12 to $19. The absolute limit, according to Cramer, should be the mid-20s.

AT&T (NYSE:T) is on Fire, Verizon (NYSE:VZ), Apple (NASDAQ:AAPL)

AT&T has been on an upward surge since last week's Goldman Sachs Communicopia Conference, and is “a screaming buy thanks to the iPhone,” said Cramer, “not to mention the dividend and the strength of its other business.” The average revenue per user was up 26% since last year and the number of text messages has doubled year over year.

AT&T is also offering U-Verse, which can bring video to TVs, PCs and phones; Verizon is the only other company that is offering this service. Last quarter, AT&T added 248, 000 new subscribers to the service, and the current total is 1.6 million. The company has also cut costs substantially, from $9.6 billion in capital spending in 2008 to $7.4 billion; however, AT&T is going to have to purchase more towers to solve its problems with data clogging. AT&T is the "safest mobile internet play" because of its 6% dividend. Technicians like the fact that AT&T has broken its 200 day moving average and Cramer thinks the upward trend will continue.

Advice to AIG (NYSE:AIG)

AIG has been "powering higher and higher," and Cramer had some advice for the once-troubled insurer; “AIG’s management needs to take advantage of the move that ended today while it still can,” Cramer said. “That way the company won’t have to fire sale meaningful divisions that could be worth much more if people believed AIG wasn’t in short-term trouble.” Even if the short squeeze that caused the current rise in stock price is broken, AIG will still benefit, and Cramer added, “Maybe the government, meaning the taxpayer, has finally a shot at getting some of its money back.”

Coal vs. Natural Gas? Governor Rendell Decides

Pennsylvania is the hotbed of the debate over natural gas versus coal. On the one hand, Pennsylvania's bountiful Marcellus shale fields could produce thousands of jobs if natural gas becomes widely embraced as an alternative fuel. On the other hand, coal producers have traditionally been the power brokers, and coal companies claim that technology to make coal cleaner will trump the advantages of other fuels. What does Pennsylvania governor Ed Rendell think?

Governor Rendell appeared on Mad Money and told Cramer he thinks there is room for both coal and natural gas, which are both in plentiful supply, particularly in Pennsylvania. He thinks Washington should adopt natural gas as a bridge fuel. Governor Rendell was upbeat about the economy and the stimulus plan. However, he said more money should have been earmarked for infrastructure. Finally, he said the reason Pennsylvania's unemployment numbers have not risen dramatically is because of the state's diversified economy.


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