Cramer's Mad Money - The Future Will Be Nuclear (2/19/10)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday February 19.

Editor's Note: Until February 26th, Jim Cramer will be broadcasting "Mad Money High Noon" which will air midday. There was no Lightning Round segment Friday.

CEO Interview: David Crane, NRG Energy (NYSE:NRG)

President Obama has promised $8.3 billion in federal loans to build two nuclear reactors, the first in nearly three decades. Cramer thinks the stock that could double on this development is NRG Energy (NRG). The company's nuclear power plant in Texas has been a great performer and according to David Crane, the company is looking forward to receiving federal funds that would enable an expansion from two to four units. Crane stressed the amount of capital required to develop nuclear power; "Even when the credit markets were working well, it was hard to find $8 billion," the amount to construct one nuclear power plant. Crane says his newest plant has 90% public approval and declared, "The future will be nuclear."

Devon Energy (NYSE:DVN), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), Research in Motion (RIMM), Electronic Arts (ERTS)

Cramer noted that, surprisingly, neither Wells Fargo (WFC) nor Bank of America (BAC) were affected by the Fed's announcement that it will increase interest rates. While he doesn't see a comeback on the horizon for Research in Motion (RIMM), Cramer predicts Electronic Arts (ERTS) will cash in on the social gaming trend. Devon, with 2% of its reserves going for $3 billion dollars, leaving the remainder of the company worth $100 billion, is the best play on natural gas.

What the Fed's Move Means for Stocks: Nucor (NYSE:NUE), Honeywell (NYSE:HON), Caterpillar (NYSE:CAT)

Doomsayers predicted that the Fed's surprise hike of the discount rate would bring the Dow down 200 points, but stocks were actually up on Friday. Cramer says the reason is the Fed's move was actually symbolic, since the discount rate doesn't affect most of the lending in the U.S; “Investors should care more about the federal fund rate increases because they directly affect how banks borrow and what they pay you for deposits.” This federal fund rate has not been increased at all and stocks are not usually affected until it is increased several times. Cramer thinks the hike in the discount rate is actually a sign that employment is getting better and is a vote of confidence for the economy. He would consider buying Nucor (NUE), Honeywell (HON) and Caterpillar (CAT).

CEO Interview: Don Wood, Federal Realty Investment Trust (NYSE:FRT), Simon Property (NYSE:SPG), General Growth Properties (GGWPQ.PK)

While the talk on The Street is about Simon Property's (SPG) $10 billion takeover bid on General Growth Properties, (GGWPQ), Cramer wanted to get the news on commercial real estate from Don Wood, CEO of Federal Realty Investment Trust (FRT). Wood says Federal Realty has been successful in a risky industry because it buys only quality properties in safe, densely populated areas rather than taking gambles on cheaper properties in troubled areas. Not only has the company been able to protect against downside but has seen significant upside.

When asked about the deal between Simon Property and Growth Properties, Wood says ultimately the deal will be good for Simon, but since Growth Properties has filed for bankruptcy, the details will not be simple to untangle short-term. Wood added that FRT has received $15 million in stimulus money to develop a program that will create jobs, and he expects to see the fruit of this labor in the near future.


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