April 6, 2006
"CATCHING SOME ZZ's"
"SHOPPING WITH FD!!"
and the LIGHTNING ROUND!!!
A Recap of CNBC's 'Mad Money w/Jim Cramer'.
Updated Daily. Always Free!
Like what you see? Click here to Bookmark this site!
o n i g h t ' s D i s c u s s i o n ' s
'Catching Some ZZ's'
Hey! You want to know the next hot IPO? We're on it man, it's Sealy! Yeah, soon to trade under the symbol 'ZZ'.
I think it will price tonight. The bankers have already set the range of $14-$16 a share.
Now, this IPO, because it's a great brand name, is massively oversubscribed. You're not going to get in.
But, hey, you could have made Mad Money buying IPO’s in the aftermarket, when I recommended them before.
And, today, you've got another shot of doing it again. Let's go over the record.
Just to give you my IPO credentials: I nailed that CMG. I nailed that UARM. I nailed IRBT on the pullback. And I nailed that doughnut company, THI.
Today, I'm picking Sealy (ZZ), the #1 maker of mattresses in the world. I think it's time to take your money out of that first national bank of Sealy - where I know you've been hiding it - and put it into the stock of Sealy.
The IPO is being priced from $14-$16 in the aftermarket. I'm giving you my distinguished permission to pay up to $18 for it. And, if it comes under that, yeah, we be backing up the truck.
The stock is worth - and I think goes to - $20.
And I think it'll go to $20. It'll probably overshoot $20, because the trading will be stupid and chaotic. But, if you hang on over 20, you're really playing Russian roulette with a shotgun.
I think it deserves to trade at 18x forward earnings and, on $1.15 a share in 2007, $20 and change.
It's a dirty little secret on Wall St. That the bankers who underwrite these deals generally cover the stock. I think they're going to give ZZ good coverage, up to $20, too. Not because they're corrupt, but because of those numbers I just threw at you.
It's good up to $20.
That 2% dividend ZZ will be paying should be great downside insurance. The bankers and the numbers should insure that you get the upside!
But listen carefully here. Buy ZZ at $18. No, don't buy it at $18.50-18.75. Just let it go; we'll catch the next one. Sell it when it breaks above $20.
You hang on past that and you're playing with your life. I know $2 looks like small potatoes, but it should be a quick, easy, painless 10% gain.
If you hold onto the stock, or if you pay up for it, I condemn what you're doing!
Bottom line!: Sealy (ZZ) - I think it's a great buy - up to $18 - and a great sell, once it's above $20
Open up your copy of today's Wall Street Journal. You're going to see a little teeny 3 inch story, on p. d6 'Settlement With Poland Clears BPH Bank Acquisition'.
Let's translate that total understatement into total Cramerspeak! The Journal is telling you to buy Unicredit. It's making Unicredit a triple buy to the power of three.
It trades under UC.IM in Milan (Italy).
UC, which is originally an Italian bank, where they're #2, with 10% of the market; is also the #1 bank in Austria, #2 in Germany. It owns the second largest bank in Poland. BPH bank is the third largest bank in Poland and, as soon as the deal closes, UC will own the #1 bank in the great country of Poland.
Why do we even care about Poland? Look, polish jokes aside, let me tell you something: Poland is the fastest growing real estate market in Europe.
It's just on fire. The housing business, mortgages, commercial lending - they are the strongest in Europe! Buy, buy, buy!
UC has the big presence in Germany, Italy and Austria. All those formerly axis-affiliated countries are stagnating. Paddles - clear - nothing.
Just like the axis 60 years ago, uc wants to expand east, but because eastern and central Europe are where all the growth is.
That's why I think UC is so great here.
Eastern European countries may be poor, but that may change very soon. Now, you can't play in eastern Europe without UC so, if you want exposure to this growth, why not buy uc.
This thing doesn't have any momentum. It sells at just 10x earnings. Hey, there is no bank left in this country that sells that cheaply, and this bank is growing much faster than any of the banks in this country.
The bottom line: I need you to pimp over to Europe and buy yourself some Unicredit (UC.IM), because they're taking over eastern Europe, and eastern Europe is where the growth is!
‘Department Store Dollars'
I think it's time for you to buy FD, as it takes out its two-year high, right here.
You know why I want you to take a hard look at FD? It's because, sometimes, you need to be a follower, not a leader.
Bill Stiritz, he's a member of the board at FD - he just bought 280,000 in the open market. He just dropped down 20 big ones.
It's an incredible commitment from an incredible guy.
Listen, I don't endorse just following somebody around like a mindless zombie but, if you did what Stiritz did, you'd stand an awfully good chance of making some Mad Money.
I know, we try not to look at insider buying, or dwell on it, on this show. That's because a lot of corrupt people on top will try to paint the tape with these little purchases.
But, listen, that's not what's going on here. Not at all. And this isn't just some little purchase! This is a back up the truck, 'mon-back, $20 million buy! It has got to be one of the biggest pieces of insider buying I can remember.
And, it's from Bill Stiritz who is - I'm ready to proclaim - the man with the Midas touch!
In the last five years, this guy has generated a triple as chairman of RAH. He's also chairman of ENR, where he did a lot of insider buying, and he gave you another triple over the last five years.
Stiritz has an excellent track record. So, if he's buying $20 million of FD - up here, up here in the 70's - you know he sees another great opportunity, and we're getting on board with him!
Even though Stiritz has a great track record, you still have to do some homework.
Seeing Stiritz do the insider buying, I regard that a source of inspiration. But you don't buy a stock on inspiration, you buy it on homework.
So, let's see. FD - 12% growth. Very easy integration ahead of it, now that it owns May Dept. Stores. Sells at 16x earnings? Wait a second - that's one and a third times growth? That's ridiculously cheap - that's back up the truck cheap - for the premier dept. Store in the country? Makes no sense to me.
FD will be doing better, because now they've got much more heft to deal with suppliers. They can play suppliers off. You've got to do business with FD. And, they can start to shut down stores that are underperforming or competing with each other, and then sell some of that real estate.
How can you not get behind this company? When they can now take their decent, newly-acquired brands, like Lord & Taylor and Filenes, and turn them into great brands like Macy's and Bloomingdales.
So, you've got a premium retailer that sells at a real discount and now has the backing of a guy that has maximum credibility, Bill Stiritz.
Today, you get lucky, because they just reported flat numbers, so the stock isn't nearly as high as I thought it would be, had they blown them away, although it was still up.
You've got a great chance to buy FD, because easter comes late this year. That means the comparisons to last year right now are ridiculously hard. Easter was early last year. Now, it'll push things out further into April, when it's warmer, and that should give you the bigger numbers then.
The bottom line!: you've got to think about buying FD - before the big numbers start rolling in; before Wall St. Starts valuing it fairly; before everybody knows about what Bill Stiritz is up to!