Segment 1: The Least Worst Place to Invest
Cramer asked why the market is going up when there is high unemployment, huge deficits, a bad real estate market, and a weak economy, and then explained that the reason is that the U.S. market is the least bad place to invest right now. China is in a huge bubble and the country is still run by communists, Mexico doesn’t have enough businesses to invest in, the Middle East is still hurt by Dubai, and Europe is in the middle of a currency crisis. The companies in the U.S. have the best balance sheets in the world so they will be in position to take over companies in other markets, and if there are ever any job gains, the market will take off.
Cramer took phone calls on the following stocks:
Banco Santander (STD): Cramer still wants to hold on to this stock because it is cheap, but he said that hedge funds will attack it because of its connection to Spain.
Segment 2: Interview with Western Gas Partners (WES) CEO Donald Sinclair
Cramer said that this company is a subsidiary of Anadarko Petroleum (APC) that makes its money operating pipelines that transport fuel. This MLP is in a good position to profit from increased natural gas usage, has raised its dividend in 3 straight quarters, but Cramer is a little worried about their dependence on APC, so he wanted to talk to the CEO. Here is a summary of the interview.
1. Cramer asked if their distribution increases will end if APC stops giving them properties, and the CEO said that APC has been helpful, but they can go find other properties on their own if necessary.
2. Cramer asked why the company is separate from APC, and the CEO said that they are able to unlock shareholder value.
3. Cramer asked if they will ever own all of APC’s midstream assets, and the CEO said that he thinks it will happen over time.
4. Cramer asked if they will move outside of the Western U.S., and the CEO said that they take over APC’s assets, so they follow their footprint, and will move into the Marcellus Shale in the future.
5. Cramer asked if declines in energy usage will decrease their profits, and the CEO said that 70% of their gross margin is fee based, and they hedge the rest, but there is some throughput risk if companies don’t use their pipelines.
6. Cramer asked how the U.S. is moving towards increased energy independence with natural gas, and the CEO said that he doesn’t understand how we got where we are today when natural gas can provide energy independence and high paying jobs.
7. Cramer asked for a comparison to Enterprise Product Partners (EPD) and Kinder Morgan Energy Partners (KMP), and the CEO said that they became public much later than those companies, and they should have more growth than their competitors.
Cramer ended by reminding everyone that MLPs have an unusual tax structure, so you should consult a tax professional before buying.
Segment 3: Uggs Running Up
Cramer said that Deckers Outdoor (DECK) reported a huge earnings and revenue beat last week with strong same store sales, and also increased guidance for 2010. The stock has already had a big move up, but he thinks it can go even higher. He said that Wall Street was surprised by higher Uggs sales, good inventory management that allowed them to limit discounts, and much higher direct to consumer sales. He is still bullish on this stock.
Cramer took phone calls on the following stocks:
True Religion Apparel (TRLG): Cramer said to take profits and that he would not enter any new positions because the stock is up so much, but he thinks the company will continue to do well.
Under Armour (UA): Cramer would rather own Nike (NKE)
Segment 4: Lightning Round!
Office Depot (ODP): Cramer would rather own Staples (SPLS) because it has dropped so much that it looks cheap.
AT&T (T): Cramer is bullish on this stock and said he likes Verizon (VZ) as well.
Human Growth Sciences (HGSI): Cramer said this is a good speculative play, along with Dendreon (DNDN).
EnCana (ECA): Cramer is bullish on this stock as a good natural gas play.
Ford (F): Cramer is still bullish on this stock and said that buying their bonds or the Ford Preferred (F-PS) is OK also.
Hansen Natural (HANS): Cramer is bullish on this stock.
AIG (AIG): Cramer is bearish on this stock because he thinks the company is worthless.
Berkshire Hathaway (BRK-A): Cramer is bullish on this stock.
Segment 5: Am I Diversified?
Cramer reviewed caller portfolios but didn't make any specific stock picks.
