Jim Cramer's Mad Money Episode Recaps

TheCramerReport.com's Mad Money Recap – August 24, 2009

Submitted by just another Cramerholic on Tue, 08/25/2009 - 05:58.

Segment 1: The Right Kind of Speculation

Cramer said that there are a lot of people who are just jumping on the hottest thing in the market right now, which is not a good thing. He said this froth was the reason that the market gave back all of its gains today. Cramer said that a lot of the speculation has been in Citigroup (C), Freddie Mac (FRE), Fannie Mae (FNM), and XM Sirius (SIRI). Cramer thinks Citigroup is up too much, FRE and FNM probably don’t have any value for shareholders, and SIRI is basically a lottery ticket, so buying them is not good speculation. He recommended Fifth Third Bancorp (X), Huntington Bancshares (HBAN), and Regions Financial (RF) as speculative banking stocks. Also, he likes RF Micro Devices (RFMD), Triquint Semiconductor (TQNT), ADC Telecommunications (ADCT), Tellabs (TLAB), ON Semiconductor (ONNN), and Cypress Semiconductor (CY) as mobile internet plays, but said to stay away from Level 3 Communications (LVLT) because of its bad balance sheet. However, his favorite speculative stock right now is AMD (AMD) because of an upgrade, its solid execution, and an undervalued stock.

Cramer took phone calls on the following stocks:

SuperValu (SVU): Cramer is bearish on this stock.

Kroger (KR): Cramer said he would rather own Whole Foods (WFMI).

Segment 2: Interview with Anadarko Petroleum (APC) CEO Jim Hackett

Cramer said that natural gas stocks are moving higher, even as inventories rise and prices fall, because people believe that Washington DC is going to push natural gas as a cleaner fuel. He thinks that Anadarko Petroleum is one of the best natural gas growth stocks because it has several new finds, it has hedged its natural gas at over $4, and has plenty of cash. He wanted to talk to the CEO to get his opinion on the future of natural gas. Here is a summary of the interview:

1. Cramer asked why the stock is doing so well with natural gas under $3, and the CEO said that he agrees that it is due to a belief that the U.S. government is going to promote natural gas as a fuel.

2. Cramer asked how clean coal has been favored over natural gas in the past, and the CEO said it is due to the large amount of coal reserves we have in the U.S., but we also have a large amount of natural gas.

3. Cramer asked about the reasons for the large swings in natural gas prices, and the CEO said that they happen, but a price of $5 - $7 per BTU is equivalent to $30 - $40 per barrel, which is a good price.

4. Cramer asked about the ability of the U.S. to be an exporter of natural gas and become energy independent, and the CEO said that both of those are possible.

5. Cramer asked about the energy bill in the House, and the CEO said that they weren’t selling natural gas hard enough initially because they thought the fuel would sell itself, but they realized that was a mistake and have garnered a lot of support for natural gas in the Senate.

6. Cramer asked about their production schedule, and the CEO said that things are right on schedule and continue to explore for more natural gas.

Cramer ended by saying that some natural gas stocks could double if natural gas is chosen as the fuel of the future by the government.

Segment 3: The Discount King, Part 1

Cramer said that he is looking for the best discount retail stock this week, and he started off by analyzing TJX (TJX). The company owns TJ Maxx, Marshalls, Home Goods, and AJ Wright, and has been doing well selling castoffs from other retail stores at a low price, with same store sales up 4% last quarter, while many retailers had a decline in same store sales. Also, their inventories were down, they have plenty of cash on hand, are buying back stock, and are opening more stores this year. However, the stock is already up 64% this year and 15 of the 20 analysts covering the stock are rating it a buy, so Cramer doesn’t think it has much upside. Also, he thinks they will have a hard time finding low cost inventory later this year as the fortunes of other retailers improve, and he said that the company had the same negative outlook on the conference call when they cut guidance for the rest of the year, so he is bearish on this stock.

Cramer took phone calls on the following stocks:

Stein Mart (SMRT): Cramer said to take profits because the stock is up over 900% this year.

Dick’s Sporting Goods (DKS): Cramer is bullish on this stock.

Segment 4: Lightning Round!

Banco Santander (STD): Cramer said this stock is good, but Banco Bilbao (BBV) is better.

Rockwell Holdings (ROC): Cramer said he has to do some homework on this stock and come back to it.

Hudson City Bancorp (HCBK): Cramer recommended Citigroup (C) right now because it is more aggressive than HCBK.

Sony (SNE): Cramer is bearish on this stock, and said that he would buy Taiwan Semiconductor (TSM) or Corning (GLW) instead.

Suntech Power (STP): Cramer said this sector will be out of favor until oil gets back to $80, and that his favorite in the sector is First Solar (FSLR).

Segment 5: Mad Money Mail

People’s United Financial (PBCT): Cramer is bullish on this stock because it will benefit from the failures at other banks, and said New Alliance (NAL) is in the same position.

Flowserve (FLS): Cramer said that this is an excellent company along with General Cable (BGC), but he still isn’t convinced that Obama really supports nuclear.

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