Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Friday, September 08, 2006

Cramer's MAD MONEY Recap (Sept. 8, 2006)

Cramer on tonight's MAD MONEY was actually sort of a real Crameresque show compared to his others this week (particularly yesterday's). After all, who isn't rusty after taking 10 days off on vacation.

Cramer wanted to discuss Kimberly Clark (KMB) as a name he still wants to own now. It operates in 3 segments: personal care, consumer tissue, and business-to-business supplies. He still wants to own consumer staples for the next two months. Cramer said that as oil prices have dropped the cost of its manufacturing for poly has dropped with oil. He said that KMB is using $70 to $75 oil per barrel for all of its assumptions for the rest of 2006 and the analysts are basing all of the numbers are based on that. So he hypothesized that all of the analyst estimates are too low on earnings and too high on inflationary operating costs.

KMB rose 0.6% to as high as $64.39 after-hours, up from its $0.02 gain to $64.00 at the 4:00 PM Bell. Investors should note that KMB is trading now right at the high-end of its $55.60 to $64.41 52-week trading range.

In a call-in Cramer was asked about Altria (MO), Colgate (CL), and Clorox (CLX). He said they are all good but KMB is the play for him.

In another call-in Cramer was asked about technology as someone was long Apple (AAPL). They wanted to know about switching from Apple into maybe a J&J (JNJ). Cramer said NO, he likes AAPL and he likes KMB as a pair to hold together.

In a new segment called "LET's GO TO THE TAPE," Cramer reviewed Deere (DE) as a name that rose from August 15 to September. He said as the company lowered guidance the initial $3 drop in the stock it then ran straight up until recently.

He also looked at the put options buying traffic during the conference call. He said people were worried that DE was a housing stock, but it has many other strengths. He said it is a winner from ethanol and that the company was giving conservative guidance. He said the company had very low inventory. The long-term investors came in and bought up the stock and created a short squeeze for short-term traders.

He wants to review other situations where a stock turns around and recovers even when the news looks bad.

He wants to find aggressive short interest and put buying on options expiration week. he said that this causes a short squeeze. He also wants to look at companies that have given conservative guidance and he wants to look at companies where the street has misinterpreted what type of company it is.

OK it's the Lightning Round time, so we're outta here.

Have a great weekend. Booyah!

Jon C. Ogg
September 8, 2006
 Subscribe

Powered by Blogger