Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Tuesday October 10.
Kimberly-Clark (NYSE:KMB), Altria (NYSE:MO), Black & Decker (BDK), Ingersoll Rand (NYSE:IR), American Standard (ASD), Cisco (NASDAQ:CSCO), Oracle (NYSE:ORCL), Hewlett-Packard (NYSE:HPQ), UAL (UAUA), Continental Airlines (NYSE:CAL) and Lennar (NYSE:LEN)
Because of the recent improvement in the economy, Cramer is making a 180 degree turn and suggests dropping consumer staples and picking up technology, financial and cyclical stocks. Signs that the market is becoming a safer place according to Cramer include the success of retail with the exception of Wal-Mart and the possibility that housing has reached a bottom is on the way up. While Cramer recommends hanging on to KMB and MO he would pick up BDK, IR and ASD. In tech, CSCO, ORCL and HPQ "should treat you well," and he would buy the airline stocks UAL and CAL. Cramer picked LEN as his favorite homebuilding stock and when a caller asked about oil, he said that its decline is not a sign of the economy's health and that oil should not be considered cyclical.
Cabela's (NYSE:CAB), Taser (TASR), Smith & Wesson (SWHC), West Marine (WAMR)
Cramer outlined three ways of determining whether a company is doing better than its stock; "if management has gotten its act together," if the company has corrected its mistakes and if the stock is excessively hated. "If you really want to make money, you have to find a stock that is absolutely despised," Cramer added and gives CAB, a hunting and fishing company as a prime example. CAB got off to a poor start and is despised by analysts while it is at a turning point. With the fall in the price of gas, Cramer predicts that same-store sales will improve and that CAB will benefit from a new inventory system. The company shows signs of growing, since it plans to add more stores in 2007. Cramer who sees a potential short-squeeze and also likes the stock because it is cheap. On a side note, Cramer told a caller that he would not endorse TASR, but would stay with SWHC and take half off the table, because of its recent gain. He told an investor in WAMR that he was "playing with fire" and would get rid of the stock gradually before next summer.
Related: Miriam Metzinger discusses Taser's jump in revenue resulting from new orders.
U.S. Steel (NYSE:X)
X jumped 7 points higher and some suggest that a negative article in the New York Times created the downturn that preceded the sudden rise. Cramer dismisses this theory and says that any news reported by the press is already common knowledge on The Street. Cramer went on to discuss the feeling one has when it is too late to sell a stock and it starts feeling like a buy. "That's not when you panic ... That's when you should be buying," he said and urged investors to do substantial homework rather than relying on headlines.
Related: The Market Participant comments on last week's jump in metals and mining.
Special Guests: Kendall Gammon and Eddie Kennison of the Kansas City Chiefs discuss Washington Mutual (NYSE:WM), Pfizer (NYSE:PFE), Microsoft (NASDAQ:MSFT), Berkshire Hathaway (NYSE:BRK.A), Morgan Stanley Institutional U.S. Real Estate fund (MUTF:MSUSX), the William Blair & Co. International Growth fund (WGIBX) and The Growth Fund of America (MUTF:AGTHX)
Cramer invited onto his show Kansas City Chiefs players Kendall Gammon and Eddie Kennison both of whom have completed the NFL Business and Entrepreneurial Program at Harvard University and are "bringing their drive to win in football to investing in stocks." Gammon comented on the importance of asking the right questions and invests with a view toward a five-year time horizon. His picks include WM, PFE MSFT and BRK.A. Kennison's investments include MSUSX, WGIBX and AGTHX.
More: Cramer's latest stock picks, including: Mad Money Recap, Lightening Round, Stop Trading and his Radio Show.
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