Cramer's Mad Money - Fluor is Flourishing (11/24/09)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday November 24.

Off the Charts: Fluor (NYSE:FLR), Jacobs Engineering (NYSE:JEC)

Infrastructure is back, thanks to the U.S. Stimulus kicking in and increasing demand from China. Cramer took a look at both the fundamentals and the technical data for Fluor (FLR) and Jacob's Engineering (JEC). According to the charts, Fluor seems to be finished declining and is ready to break out. However, Jacobs Engineering is returning to its July lows on high-volume trading and could drop from $36 to $30.

The fundamentals agree with the technical analysis. Fluor has more international exposure than JEC, which means that it will benefit from the lower dollar and Chinese demand. In fact, Fluor just signed a deal with China National Offshore. In addition, Fluor's business model depends more on building (which leads to more growth) while Jacobs Engineering is more focused on maintenance. Both Fluor and Jacob's Engineering missed their quarters, Fluor's miss was less dramatic. Fluor's multiple is 12 and Jacob's is 13; the latter has a higher growth rate, but Cramer thinks Fluor is "better positioned" since its multiple's historic high is 18.

CEO Interview: Emmanuel Chirico, Phillips-Van Heusen (NYSE:PVH)

Phillips-Van Heusen (PVH) is Cramer's pick for the holiday shopping season. He called the company, "the perfect mix of retail and wholesale," since PVH makes its own products and licenses its own brands. Emmanuel Chirico calls Phillips-Van Heusen a "portfolio company" because it targets different customers in different markets, from high-end to discount.

Brand recognition is a big part of the company's success; Van Heusen has 45% market share for mens' dress shirts, and Chirico envisions similarly growing its other products. Chirico discussed cost-cutting measures, such as closing down some slower stores and taking advantage of lower rents to open new stores. PVH reported an impressive quarter recently; it beat estimates by 21%, raised guidance and reported a 6% increase in same store sales. However the stock failed to rise on the news, even though it is up 197% from March lows. With the stock trading at just 1 times its growth rate, Cramer thinks Phillips-Van Heusen still has more room to run.

Mad Mail: Chesapeake Energy (NYSE:CHK), Cloud Peak Energy (NYSE:CLD), Burlington Northern (BNI).

Chesapeake CEO Aubrey McClendon sent Cramer an e-mail that his company has created 1,765 new jobs with a salary of $60,000. "It's all about jobs, jobs, jobs!" wrote McClendon. Cramer agreed. When a viewer asked Cramer if he should hold onto Cloud Peak Energy (CLD) after buying the IPO, Cramer replied that the company probably has the cleanest coal in the country. "Coal is not likely to go away. I wish it were. But it isn't," as indicated by Warren Buffett's purchase of Burlington Northern (BNI).

Ford (NYSE:F), Stanley Works (NYSE:SWK), Bristol Myers (NYSE:BMY), WellPoint (WLP), Emerson Electric (NYSE:EMR), UPS (NYSE:UPS), Dell (NASDAQ:DELL), Costco (NASDAQ:COST)

The bears once again were explaining away the rally; on Tuesday, the Dow closed only 17 points lower after starting the day nearly 100 points off. Of all the theories put forward, including a short squeeze or wishful thinking on the part of investors, Cramer preferred the simplest explanation: "things are getting better, not worse."

In spite of slowness in the financial sector because of outstanding TARP debts and high unemployment, many companies are doing well. Ford (F) is at a two-year high, Costco (COST) is at a 52-week high, Stanley Works (SWK) is benefiting from the trend of home improvement. The weak dollar has been good for Emerson Electric (EMR), and healthcare is not so scary now that it seems that Obama's proposals are going to be merely a shadow of the original plans. This is good news for WellPoint (WLP) and Bristol Myers (BMY). Cramer thinks agriculture will be the next sector to experience a bull market. 'I just want to report that contrary to everything you hear, there are lots of good things happening."


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