Segment 1: In JP Morgan (JPM) We Trust
Cramer is happy to see that JPM reported a great quarter today, and said that CEO Jamie Dimon’s statement that the worst is behind the bank should end all the worries about the next potential wave of foreclosures and home equity losses. He explained that the exact same thing happened during the banking crisis of 1991 where Wells Fargo (WFC) came out and said that the worst problems were over, and anyone who listened made a nice profit. He thinks that things are improving in the financial sector, and could be in the best of the market as well.
Cramer took phone calls on the following stocks:
Allied Irish Banks (AIB): Cramer is bearish on this bank, and said to stay away from all Irish, Icelandic, and Swedish banks.
Segment 2: Interview with Xilinx (XLNX) CEO Moshe Gavrielov
Cramer had this CEO on the show because he recommended it on the show, but it has been flat while the semiconductor sector has been hot, and he wanted to find out why the company lowered guidance for the rest of the year when many other companies are doing well. He thinks it could be possible that the expectations were too high for their new wireless chip line, and now people are selling because they are disappointed. Cramer began the interview by asking if the problems with the quarter were due to supply issues with their new chips, and the CEO said that supply issues were a problem, and they probably would have exceeded estimates without these problems, but they are behind the company now. Cramer then asked how problems occur in the chip manufacturing process, and the CEO said that the process is very complex and they want to deliver high quality products to their customers. Cramer’s next question was about the reported decline in sales to all of their major end markets, and the CEO said that they have a very diverse customer base, and more businesses are moving towards their products. Cramer’s last question was about their sales in Asia compared to the past, and the CEO said that they have diversified from selling to North American telecommunications companies to many sectors across the world. Cramer ended by saying that he is still bullish because they have fixed their supply issues.
Segment 3: Sell Block
Cramer put Nokia (NOK) and Dell (DELL) in the Sell Block because they are inferior companies, and he doesn’t want people to extrapolate their poor results out to good companies like Apple (AAPL). He thinks that Apple is beating Nokia in the mobile phone market, and that is the cause of Nokia’s problems, not an industry-wide problem.
Cramer took phone calls on the following stocks:
ADC Telecommunications (ADCT): Cramer is bullish on this stock as a wireless telecom play.
MEMC Electronics (WFR): Cramer is bearish on this stock and said to by AMD (AMD) instead.
Segment 4: Lightning Round!
Noven Pharmaceuticals (NOVN): Cramer said to sell this stock because it is being bought out, so there is no upside.
Arch Coal (ACI): Cramer is bearish because Obama doesn’t like coal and it already had a big bullish move, and said the only coal stock he will recommend right now is Peabody Energy (BTU).
NCR (NCR): Cramer is bearish on this stock.
DryShips (DRYS): Cramer is bearish on this stock, and said to buy Nordic American Tanker (NAT) instead.
Gannett (GCI): Cramer is bullish after they reported a great quarter.
United Parcel Service (UPS): Cramer is bullish on this stock as well as Federal Express (FDX).
Segment 5: Eureka Moment
Cramer borrowed an idea from two asset managers and explained how to best handle all the warrants that the banks gave to the government when they bought TARP funds. Right now, it is difficult to determine their value, but David Bunting and Brett Hair explained that the best way to determine the value is for the government to sell them at public auction, ensuring that the taxpayers get the best value, and gives the banks the ability to buy them and get them off their books if they pay market value. If another buyer purchases the warrants, they can hold them until expiration or trade them, just like the auctions that the government already runs for treasuries on a regular basis.
