Segment 1: Second half of 2008 Forecast
Cramer said that he is glad that he can put the first half of the year behind him, and that it is time to look ahead to see how to make some money. There is a Medicare bill making its way through Congress that you can profit from, despite the fact that it can be a waste of taxpayer money. He will spend one segment each day this week recommending a company that can profit from this bill, and that healthcare is a good place to invest because it is not sensitive to the economic environment.
Cramer took phone calls on the following stocks:
Medical Properties Trust (MPW): Cramer thinks that this is a great REIT because of its properties and its high yield.
Medco Health (MHS): Cramer said that he has become less bullish on this stock because of increased competition from CVS (CVS) and UnitedHealth (UNH), and said to sell on any jumps in the stock price.
Segment 2: Profit from Medicare, Part 1
The first stock Cramer recommended in this week long segment is Fresenius Medical Care (FMS). Cramer likes it because he thinks dialysis providers will be given a nice windfall in the new Medicare bill by a new inflation based index for dialysis services, plus guaranteed yearly increases. FMS has a duopoly with DaVita (DVA), but Cramer likes Fresenius better because it has more size, and therefore more pricing power. It also is the only integrated dialysis provider in the world, and is expanding internationally, with a growth rate of over 20% overseas. The final reason he is bullish is that he thinks the earnings estimates are too low, giving the stock an easy target to beat over the next few quarters.
Cramer took phone calls on the following stocks:
Medtronic (MDT): Cramer said that he has not recommended this stock in a while, but he is now bullish because it has beat earnings estimates for the last 2 quarters.
Schering Plough (SGP): Cramer said that he doesn't think the stock is a takeover target, but he likes it anyway.
Segment 3: Lightning Round!
American Oriental (AOB): Cramer is bearish on this stock, along with every other Chinese stock.
Visa (V): Cramer said to take profits in this stock, and that he likes Mastercard (MA) better.
Tata Motors (TTM): Cramer said to take profits at $19, and is staying out of India right now.
Yingli Green (YGE): Cramer said that this is another Chinese stock to avoid.
BJ's Restaurants (BJRI): Cramer doesn't like restaurant stocks right now because of the potential recession.
Rex Energy (REXX): Cramer said that this is his most speculative play on the Marcellus Shale, but he is still bullish. He also recommended Chesapeake Energy (CHK) as a less speculative choice.
Canadian Solar (CSIQ): Cramer thinks this stock is going lower. He said to buy First Solar (FSLR) if you are interested in a solar play.
Con Ed (ED): Cramer thinks that this stock is way too low, since it has a 6% dividend yield right now. He wants to buy it uner $40.
Segment 4: How to Avoid the Bond Bullies
Cramer said that people are saying how cheap General Motors (GM) and Ford (F) are right now, and Cramer disagrees because they both have taken on too much debt. Both companies have a book value of around zero, and he thinks that the equity holders could lose out to the bond holders at some point if they are unable to pay back all that debt. Cramer learned this lesson in the past with Bethlehem Steel, when its common stock was canceled suddenly by the bond holders (aka bond bullies), leaving shareholders with nothing. Cramer added that he thinks Ambac (ABK) and MBIA (MBI) are in the same position, and that Citigroup (C), Wachovia (WB), Bank of America (BAC), and other financials could be in trouble as well.
Segment 5: Interview with CenturyTel (CTL) CEO Glen Post
Cramer said that this CEO looks out for shareholders, and that he is happy that the company increased the dividend by 10 times, and is continuing to buy back stock. Cramer asked why the stock fell as low as it has, and Post said that he doesn't know why, but he feels that they are undervalued because of their strong cash flow and solid growth. Cramer likes the company, and it bullish on the stock.
Segment 6: Sudden Death!
Corning (GLW): Cramer is bearish.
Nike (NKE): Cramer is bullish.
Research in Motion (RIMM): Cramer is bullish.
