April 5, 2006
and the LIGHTNING ROUND!!!
A Recap of CNBC's 'Mad Money w/Jim Cramer'.
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o n i g h t ' s D i s c u s s i o n ' s
Celgene Corp (CELG)
Countrywide Financial Corp (CFC)
Netflix Inc (NFLX)
Georgia Gulf Corporation (GGC)
Cephalon Inc (CEPH)
United States Steel (X)
AK Steel (AKS)
Red Hat (RHAT)
Emcore Corporation (EMKR)
Henry Schein Inc (HSIC)
PetroQuest Energy Inc (PQ)
Blockbuster Inc (BBI)
Movie Gallery Inc (MOVI)
Bema Gold Corporation (BGO)
VA Software (LNUX)
Pacific Ethanol Inc (PEIX)
I gave you titanium, and you had a chance to make some mad money in the Allegheny Tech (ATI). I tossed out ceramics - said there was money to be made in Ceredyne (CRDN); two thumbs up!
We've practically been coining money in the zinc, in the copper, in the iron ore. Hey, in the gold, with the Rio Tinto (RTP), the BHP, the Anglo-American (AAUK).
Why am I telling you about these? Why am I telling you about how right I've been on these materials? Cramer be smart? It's not because I'm full of myself. It's not because I want you to think that I'm brilliant. Remember, Cramer only ever gloats in order to move copies of the book, Jim Cramer's real money, sane investing in an insane world.
I'm telling you this, because I want you to listen to me right now, so you can try to make some mad money.
I've got a mineral pin action winner. All I care about on this show is turning you into a fat-cat, capitalist plutocrat!
I was right on these other metals, and today, I've got the next one for you. Are you ready, skee-daddy!?
You need to experience the wonders of beryllium! I am convinced that beryllium is the next titanium!
Now, when you want the beryllium, there's almost literally one place for you to go - there's really only one aisle in the supermarket for beryllium...
Brush Engineered Materials (BW)!
The reason for this, is that BW is the only integrated supplier of beryllium on earth. Hey, monopolies; how much do we love monopolies on mad money?
And, BW owns the only active bertrandite ore mine in the developed world. It's in Utah! Bertrandite - for those of you who didn't major in chemistry - is a type of beryllium.
Sociedad Chemica (SQM) has the lithium monopoly, and you know we love SQM here on mad money! BW is pretty much the same thing, but with beryllium.
BW makes a lot of things out of beryllium which, by the way, is one of the lightest metals in the world.
They've got a metals segment, a microelectronics segment. Beryllium is the thing these two businesses have in common.
Let me tell you why Cramer likes it though. Let me give you the beryllium sales pitch!
BW makes 39% of its money from telco and computer parts. Beryllium is very conductive, and because it's very stable, it makes good computer parts.
That's not the business Cramer loves. No, no way. I'm into beryllium for the aerospace business! All aboard!
Right now, we've still got years left on this aerospace cycle. But a lot of the traditional plays have been exploited; starting to look a little sluggish.
That's why I think beryllium is the next place to be; it is relatively, and I say - let me caveat that, because it's up a little - it's relatively unexploited.
First of all, incredibly light. The lighter the aircraft, the less fuel you need and the faster it can go, which is why titanium, which is light compared to steel, has been doing well.
Beryllium, my good friends, is a lot lighter! It's also incredibly stable across a wide range of temperatures, so you can use it to make spacecraft that are going to be exposed to intense heat on re-entry.
BW has the aerospace and defense angle here, and the demand for beryllium - it's going up across the board!
That's why this is the next resource/metals stock to own.
This is at least a $26 stock, maybe more, masquerading as a $23 stock, because they've got the market for this stuff totally cornered.
There's something else. If you want a play on global, thermonuclear war, BW is also for you. Not a lot of people know this, but you have to wrap beryllium around the plutonium, around a nuclear bomb, if you want it to be spectacular.
The bottom line!: if you listened to me on titanium... if you bought my act on zinc... if you agreed with me on copper... if you sided with me on iron or gold... then you know I'm money in the bank! That's why I think you should listen to me on beryllium, and buy some BW!
We like KRY because we like gold, and it's the cheapest gold mine on earth. This is a two-part story. Part one is about gold. Part two is about hugo chavez.
Gold keeps going higher because of demand from india and china. Gold actually cost a few bucks more in india than the world price. Isn't that unbelievable. That's because demand is so strong in that country.
Now, this demand is ostensibly for jewelry, but that's not the reality. In china and india, they are buying 24k gold. Hmm, think about that. You don't use 24k gold for jewelry, oh no. It's too weak and too soft.
It's actually being bought as a hedge against the fiscal profligacy and potentially communist natures of the chinese and indian governments.
The citizens of these countries don't trust their governments not to run a massive inflationary budget. So they're pouring all their newly-accumulated wealth into 24k gold. It's a hedge ladies and gentlemen.
Meanwhile, all the major gold co.s are producing flat out! And they can't replace their reserves. A bullish situation.
That's why - that's why I like gold now. The demand is huge. The supply is diminishing.
Now, why do we still like KRY?
When I told you to get behind this stock, it was a total gamble. I mean they have the largest unmined deposit of gold in the world.
Hey but, jeez, it's in venezuela - sworn opponent of these united states. And the big question was whether or not hugo chavez would let them mine it. House of pain if he says no. House of pleasure if he says yes. This - sell, sell, sell! - if he said no.
The question you've got to ask yourself right now, is why shouldn't we ring the register? For a quick 75% gain? That's better than a sharp stick in the eye, as we say on wall street.
But I think KRY is only going higher - much, much higher! Not only that, even though the stock is up more than a buck, from where I last recommended it, I think it's even more compelling now - more compelling - than it was back in january.
This stock could go up three or four times from where it is right now! Let me tell you why this could be the big story for 2006, now that ATI was already the big story.
Wall street does not know how to handle communist strong men like Hugo Chavez. The street is still valuing this stock like Chavez might not let the guys at KRY mine! That's pure foolishness.
Last week, KRY got permission from the Venezuelan mineral bureau to mine. Now there's only one more board that stands in the way; one more board that needs to approve it - the environmental commission, and wink, wink - I think their approval is imminent!
You've got to understand that Chavez wants this mine as much as KRY does. He gave them the total concession; everything they wanted - the total lease.
I know, the press in America is just wildly anti-Chavez. But do you know he's got actually a pretty good record with business.
But just look at the record: for the six years that he's been in power, you've had no nationalizations, no confiscations, and a lot of companies, including gold companies, have been happily developing mines in Venezuela. It's a veritable house of pleasure there.
If Chavez wanted to confiscate the gold, he would have done it last week.
So, what happens when the environmental ministry gives KRY to get up and running? I think it will be the cheapest gold mine on earth. How cheap?
Their reserves will be valued at $67 dollars an ounce, compared to $257 an ounce of a similar compilation of mines. These numbers courtesy of wellington west of Canada - best of breed gold broker, up in the area of Newfoundland.
This is an absolutely ridiculous disparity that cannot be maintained! Somehow, the gap between KRY and the peers will have to close.
They've got 13.6 million ounces of gold. That's 300,000 ounces a year for 43 years!
I think either the market will take KRY up to where it belongs, at 4 times where it is now - right now, when they start producing in 20 months - or, and you know on Cramer's mad money, we do not speculate unless the fundamentals are good - I think KRY will get a bid from another gold mine. Because I think all the companies that run gold mines know how undervalued this co. Is and they're just sitting around waiting for Chavez to do up or down.
Both Hecla and Gold Fields are in Venezuela, and they love doing business with the Chavez man. And I think that they'd love to buy KRY for three or four times where it is now, now that the heavy lifting's been done.
How 'bout a bottom line?: I think you get into KRY before the environmental industry approves and this stock pops! Buy, buy, buy! Once they start producing, this stock either should go up three- or four-fold, or the major gold companies should buy it at near the price, because it's just too attractive not to gobble up!
As they say on Mad Money, you can't afford to miss it!