Jim Cramer opened his show “Mad Money” last night discussing why the US stocks has not gone down as much as other stock markets, like those in Europe for instance. He explains that while the DOW is down 1%, the S&P 500 5% and NASDAQ 2.6%, the rest of the world is faring much worse – Germany is down 15%, France 17%, the UK 8%, Japan 14% and China 23%.
Cramer says the difference is that Federal Reserve Chairman Ben Bernanke lowered interest rates enough that many stocks yield more than bonds. Cramer says that US companies are also doing their part, pulling away from being reliant on any one economy and working to keep costs lean and dividends up, making some large cap companies like Microsoft (MSFT) practically like a bond “with a little more upside.”
Here are Jim Cramer’s stock picks on his show on October 11th:
Pepsico (PEP): Cramer is looking forward to seeing what happens when Pepsico (PEP) reports its quarterly earnings results before the opening bell on Wednesday. According to CNBC, “it recently faced several number cuts and saw its earnings estimates lowered through 2013 by Goldman Sachs. There’s also been talk on the Street that Pepsi should consider either breaking up or further shaking up its management.” Cramer is bullish about it though. He looks at PEP and sees a global, high-growth company that offers a big 3.5% dividend yield. Boykin Curry’s Eagle Capital Management has the largest stake in PEP among the 300+ hedge funds we are tracking.
Nucor (NUE): Cramer is looking long on the steel company NUE. While it is facing certain issues like a weak housing market and overcapacity in the global steel industry, it offers a 4.2% dividend yield, so it is almost like the company is paying you to wait for its earnings to improve. Cramer recommends buying a small amount and holding it until the price comes down more. If it does, you could hit into a bargain (i.e. more room for profits over time). Also, if the price goes down (NUE closed Tuesday at $34.69/share), the dividend will go up – at $32.22 a share it will have a dividend yield of 4.5% and at $29 a share it will yield 5%.
Cummins (CMI): CMI is a favorite of Cramer’s. He sees CMI as a stock with strong earnings and no fall-off in orders. Cramer sees the market as trading on earnings rather than concerns over the European debt crisis, so what’s not to love. Cramer is estimating it will be an outperformer again, but just to be sure he is going “Off the Charts” with CMI. Stay tuned.
Under Armour (UA): Cramer likes this stock but he wants to see it go down a little first. UA traded at $75.27 a share at Tuesday’s close.
Veoilia Environment (VE): Cramer is bearish about VE because he thinks the stock is expensive. It closed yesterday at $14.93 a share, down 0.86% on the day.
AnnTaylor Stores (ANN): ANN closed Tuesday at $24.08 a share, down 0.82%. Cramer is bearish about this stock. There aren’t any glaring issues. It is just that he would just prefer to invest in discount retailers like Ross Stores (ROST) or TJX Companies (TJX).
Ross Stores (ROST): Again, Cramer likes ROST. It closed the day 0.81% up at $84.95 a share.
TJX Companies (TJX): Cramer is also bullish on TJX. His charitable trust is buying TJX. The stock closed Tuesday at $58.07 a share, up 0.47% on the day.
Westport Innovations (WPRT): In general, Cramer “thinks car companies, gas stations and regulators still need to get on board with using natural gas as a transportation fuel.” Still, Cramer is bullish on Westport. It was up 0.59% on the day, closing at $28.77.
Alkermes (ALKS): This is a diabetes stock that Cramer is very bullish on. It closed Tuesday trading at $15.27, down 0.59% on the day. John Burbank’s Passport Capital had a large position in ALKS at the end of June.
New Oriental Education & Technology Group (EDU): Cramer is not bullish on any Chinese stocks right now, except Baidu (BIDU). EDU closed trading at $29.57 a share yesterday, up 3.54%.
Stillwater Mining (SWC): SWC is just okay in Cramer’s book. It is his opinion that if you were going to buy a precious metals company, Randgold Resources (GOLD) or Silvercorp (SVM) would be better choices. SWC was up 3.38% on the day, trading at $9.48 a share.
Randgold Resources (GOLD): Cramer is bullish about GOLD. It closed Tuesday trading at $102 a share, up 0.62% on the day.
Silvercorp (SVM): SVM is another precious metals company Cramer is bullish about. It closed trading Tuesday at $8.76 a share, down 2.56% on the day.
Allstate (ALL): Cramer is looking at ALL the same way he looks at SWC or ANN – they are okay stocks but there are better choices in their respective industries. ALL finished down 1.09% on the day, closing trading at $24.49 a share.
Prudential (PRU): Cramer prefers PRU to ALL, primarily because PRU has better assets. Cramer’s charitable trust has PRU in its portfolio. PRU closed trading Tuesday at $49.72 a share, up 2.01% on the day.
Sprint Nextel (S): Cramer thinks this company is too low on cash to be bullish about it. Sprint Nextel closed trading at $2.38 a share, up 7.21% on the day. David Einhorn’s Greenlight Capital had a large position in S at the end of June.
