Cramer's Mad Money - The Nattering Nabobs of Negativity (10/14/09)

Includes: AA, APSG, DELL, ED, INTC, T
by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday October 14.

Cramer and the Bad News Bears: Intel (NASDAQ:INTC), Alcoa (NYSE:AA), Dell (NASDAQ:DELL)

Cramer lashed out at the "nattering nabobs of negativity" (a quote in honor of the late William Safire) who are "looking for excuses to hate the market." Even with the Dow at 10,000, the prophets of doom have been consistently wrong in their predictions. First, they talked of slowness in the transport sector, but transports have been "massively outperforming." While the bears said high prices for gold signaled inflation fears, the Dow reached a crucial level with gold at $1,060 an ounce. They expected misery for Alcoa, but the company reported a "bang-up quarter."

The Fed hasn't raised interest rates in spite of dour predictions. Pessimists predicated Intel would report the same problems as Dell has, but Intel saw "its largest quarter-over-quarter sales increase in 30 years,” Cramer said. Historically, Intel's strong performance has meant dramatic gains in its stock price, which Cramer thinks is headed to $25.

Mad Mail: Consolidated Edison (NYSE:ED), AT&T (NYSE:T)

When a viewer asked Cramer why the Dow didn't decline to 9,400 as he'd predicted a few weeks ago, he said investors should be prepared to use an upcoming 3-5% pullback as an opportunity to buy stocks, but he did not intend to predict exactly when that would occur.

In spite of the Dow hitting 10,000 for the first time this year, Consolidated Edison and AT&T declined. Cramer explained that as the economy gets stronger, people become worried about interest rate increases, which would hurt these two companies.

Another viewer asked how an increase in natural gas drilling would be good for investors, because the price would go down. Cramer says the scenario he was hoping for would be that with increased drilling, more people would use natural gas, and the price would go to 5-$7, but he admits that coal still has a stranglehold on Washington.

CEO William Van Vleet, Applied Signal Technology (APSG)

Applied Signal Technology, which is a pure play in the signals and communications sector, develops systems that can penetrate enemy signals over telco networks. The company is considered "best of breed" and has contracts with the CIA, NSA, and may potentially make other deals with the Army, the Marines and anonymous clients. The company has no competition and trades at 18 times next year's earnings, a cheap level, according to Cramer.

Van Vleet said his company produces technology small enough to fit into an Army backpack and its devices are used on unmanned aerial vehicles. One issue many investors have is, given the secrecy of the business, it may sometimes be difficult to discuss upcoming contracts with clients, but Van Vleet says Applied Signal Technology strives to keep the investor in the picture as much as possible.


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