Segment 1: Cause for Celebration
Cramer said that the bull market is one year old, since the stock market hit its lowest close of the previous bear market at 6547 on March 9, 2009, but people still don’t like stocks right now. He thinks this 61% move is a reason to celebrate, and he looked back at all the negativity in the news and anti-business rhetoric from Obama that sent the stock market to those levels, and explained that the bottom was put in place when Obama stopped attacking business, it became clear that the banks were not going to be nationalized, the Chinese stimulus kicked in, and balance sheets improved with the secondary offerings at higher prices.
Segment 2: Interview with Noble Energy (NBL) CEO Charles Davidson
Cramer said that the natural gas sector had a big win in Colorado last week when the state government required Xcel Energy to retrofit some of their coal plants so they can run on natural gas and reduce emissions. He said that NBL has natural gas assets that are the equivalent of 53 billion barrels of oil, and just acquired more gas reserves in the Rockies, so it should be in good position to take advantage of Colorado’s new requirements. The company also has assets in Israel, West Africa, the Gulf of Mexico, and Texas. Here is a summary of the interview.
1. Cramer asked about the decision in Colorado to require one of its utilities to use natural gas to generate electricity, and the CEO said that legislation like this needs to happen more often as people realize the abundance of natural gas available in the U.S.
2. Cramer asked if the company has any regrets about its strategy because they were more bearish on natural gas during the last conference call, and the CEO said that decisions like the one made in Colorado make him feel better about their strategy.
3. Cramer asked if more utilities will try to sign long term agreements now that natural gas is becoming more abundant, and the CEO said that he hopes others will follow Colorado’s lead.
4. Cramer asked about their partnership with Israel, and the CEO said that his company made a huge find there last year, so the country is moving towards generating all of their electricity from natural gas and make themselves energy independent.
5. Cramer asked how quickly the U.S. could convert their vehicles to natural gas, and the CEO said that Israel is planning to use more electric cars, which will be indirectly powered by natural gas, they could use natural gas in their transportation system as well, and that their battery technology is a few years away from being used.
6. Cramer asked if companies are going to take action to move to a cleaner fuel like natural gas before the EPA starts shutting down the dirtiest coal plants, and the CEO said that there is no reason to keep operating the dirtiest plants when there is an abundance of natural gas in the U.S.
7. Cramer asked why the U.S. has not embraced natural gas yet, and the CEO said that all these huge finds have happened so quickly, but word is getting out now.
Cramer ended by saying that he is bullish on this stock because the natural gas sector is still undervalued.
Segment 3: On the Right Foot
Cramer said that shoes stocks are hot right now, and he likes Skechers USA (SKX) because Nordstrom (JWN) is saying that their products are selling well, and that is the store that tipped Cramer off about Decker Outdoors (DECK) over the holidays. The company has a brand that is popular with young women, had a great fourth quarter, gave a very bullish forecast on their conference call, increased same store sales by 17.4% last quarter, and decreased inventory by 14.2% over the last year. Also, the company feels that sales could increase 30% in the first half of 2010 as they open 25 – 30 new stores around the world, and they are leading a new market segment with their Shape Up and Tone Up shoes that provide exercise and make women’s legs look better. The only downside is that the stock is near its 52 week high right now, but it is cheap at 9 times earnings once you remove its cash per share because the company has a 15% growth rate, so the stock should go even higher.
Segment 4: Lightning Round!
Hershey (HSY): Cramer is bearish on this stock because it already had a nice run up and he doesn’t think they have the earnings to support the current stock price.
Cisco (CSCO): Cramer is bullish, thinks the stock could go to $35 before it is expensive, and has already bought a position for his charitable trust.
Ariba (ARBA): Cramer is bullish on this stock and F5 Networks (FFIV) as internet commerce plays.
Visa (V): Cramer is bullish on this stock because he thinks they can raise their earnings estimates.
Gafisa (GFA): Cramer is very bullish on this Brazilian bank.
Fuel Systems Solutions (FSYS): Cramer is bullish on this stock because he thinks it is cheap.
Allied Irish Banks (AIB): Cramer is bearish on this stock because it is too risky, and he recommended Citigroup (C) instead.
Motorola (MOT): Cramer is bearish on this stock and recommended Apple (AAPL) instead.
Segment 5: Eureka Moment
Cramer’s Eureka Moment for today is that the investments made by the U.S. government during the financial bailout appear to actually have value, and they should set up a holding company to get the best price possible by contacting someone like Warren Buffett rather than just selling on the open market.
