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Friday, October 27, 2006

Cramer on MAD MONEY: Likes LOW, CAT, PMTI

Tonight on Jim Cramer's MAD MONEY, Cramer said that Lowe's (LOW) has bottomed, and he thinks you have to buy. He said that their earnings are 3 weeks away.

He said that the SEC went to REG FD in 2000, and that took away all the advantage of hedge funds. He said you can now look at it the same way a hedge fund would. You have to work bottom up and see how the suppliers are doing what they senfd there. Top down you have to look at the strength of the consumer and their spending.

He said a lot of hedge funds got short LOW when Stanley Works discussed high inventories. He thinks that may be a mistake. He said Black & Decker rose $4.00 on strong earnings, and they reported slim inventories.

He said on month ago Masco also gave cautious numbers, as did American Standard, and as did Sherwin Williams. He said that Fortune Brands came out and said the remodelling market was still doing well and that they gave a good signal.

On the macro part, he said his checks with homebuilders make it look like the worst has been seen. He also said you don't have to have a bottom in homebuilders alone to buy LOW.

He thinks Lowe's (LOW) has bottomed out and now needs to play catch-up to the rest of retail. Lowe's (LOW) closed down 0.98% at $30.34 today, but was back up to $30.67 after he discussed LOW in after-hours trading. Its 52-week trading range is $26.15 to $34.85.

Cramer also said he thinks Caterpillar (CAT) has bottomed out and that is a Buy.

Cramer then went over an old idea that is still working. Sometimes good ones at highs keep going. He went over Palomar Medical Tech (PMTI). He has been positive on this numerous times and he thinks the vanity of today is driving this. He said he has been on it since $34.00 andnow it is $48. He said if you have been there the whole time you could take some off the table. He said the shorts didn't cover either.

Cramer thinks the new laser will get FDA approval for home use, and the bears do not think the FDA will approve it. He said they also get back-streams of revenues from competitors after the won patent cases against them. He said trades at 30 times earnings and has over 30% growth.

He says that even 30% above his initial call he thinks this can make you mad money.

Jon C. Ogg
October 27, 2006
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