Jim Cramer's Mad Money In-Depth: 3/13/08: Blame it on RIO

by: Miriam Metzinger

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program,Thursday March 13. Click on a stock ticker for more analysis.


The four Brazilian stocks Cramer recommended the week of February 5 are up an average of 11% while the S.&P has risen only a tenth of that number in the same amount of time. Cramer called Brazil a “gold mine” while the U.S. is “pathetic.” Cramer likes RIO because it is the leading producer of iron ore and has the world’s largest deposits of nickel. The company recently made a bid for European mining company Xstrata, and while the deal doesn’t seem like it will happen, Cramer says this is a good thing because RIO will avoid arbitrage overhang that would send the stock lower. RIO is currently 4 points off of its 52-week high and Cramer would buy it on the way down. He agrees with Goldman Sachs which predicts the stock could reach $57, $23 higher than its current price.

Dow Chemical (DOW), Monsanto (NYSE:MON)

Cramer has been searching for high-dividend stocks which provide safety in a volatile market, and discussed DOW, which offers a 4.5% yield and has a history of raising its dividend. While raw costs are going higher for Dow because of the rising price of petroleum, the CEO recently raised earnings estimates. Dow has recently made a deal with Kuwait to lower oil and natural gas costs and is working with Monsanto on developing hybrid corn seeds; “As Dow becomes less of a chemical stock and more of an agriculture play, it gets more and more attractive," he said. Much of Dow’s downside is priced into the stock, but Cramer suggested viewers do their own homework before buying Dow.

Sell Block: Nokia (NYSE:NOK), Motorola (MOT), Texas Instruments (NYSE:TXN)

As much as Cramer has liked Nokia since Mad Money began, it is time to say goodbye to an old friend and to scale out of the stock as it heads up on rallies next week. Cramer discussed a Texas Instruments conference call which blamed lackluster performance on falling demand from “a large wireless customer” which Cramer thinks is Nokia. He also expects NOK to decline on increased competition from the iPhone and an ongoing price war with Motorola. He would use positive action next week as an opportunity to sell.

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