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Monday, August 21, 2006

Cramer's MAD MONEY (August 21, 2006) "Shortages"

Main Stock Tickers: NOV, SQM, AHS

This evening on Jim Cramer's MAD MONEY, Cramer wanted to review shortages in various sectors and how they could make you money. Cramer wanted you to look for companies that can grow earnings because of pricing power rather than companies whose earnings multiples may expand because of the environment like Pepsi (PEP) and P&G (PG). He reviewed three areas where there are large shortages:

-Oil Rigs for drillers;

-Lithium for batteries;

-the best is a Personnel shortage in nursing;

He said there is a large Rig shortage, as there just aren't any more rigs even if you found a huge oilfield. Day rates have been rising and that there are just no more rigs around if extra finds come up. National Oilwell Varco (NOV) was Cramer's favorite way to play the drillers because their rigs can be moved around more rapidly. He said it is a steal.

He also said there is a lithium storage after the Dell recall of 4.1 million batteries. Cramer said the Chemical & Mining Co of Chile (Sociedad Quimica) (SQM) is the way to play this. In a Q&A Cramer said that China BAK Batter (CBAK) was not really the way to play it because they were in China.

Cramer's favorite area that is in short supply is the shortage in nursing personnel. Cramer said AMN Healthcare Services (AHS) is the company that helps recruit and place nurses, and they should be able to raise prices many times.

Jon C. Ogg
August 21, 2006
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