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Thursday, 04/03/08
Posted 04/03/08, 11:52
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Thursday, 04/03/08 |
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Dow Jones: |
12,626 |
+ 20 |
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NASDAQ: |
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2,363 |
+ 1 |
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S&P 500: |
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1,369 |
+ 1 |
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Opening Segment 1
Title: |
'Power Trip'
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. . . .
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Featured Stock(s): |
CPFL Energia S.A. (CPL)
See CPL's official
website
here.
See the Yahoo!
Finance profile for CPL
here.
See Opening Segment 2,
below...
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC: At
Penn State, last
Wednesday, a student in
the fabulous Nittany Lion
Investment Fund, suggested
a stock in a class I
attended...
I vetted CPFL Energia
S.A. (CPL)...
It trades in America...
I don't recommend stocks
that trade in another
country, that don't trade
in America... it's too
risky for you...
CPL, it turns out, I think
is a great play on Brazil,
which is one of our
favorite countries... and
that is continuing to
pants the United
States, when it comes to
financial stability and
economic growth.
CPL is Brazil's largest
privately-held power
distributor... a massive
utility, with huge scale,
and a natural monopoly...
There's nothing better
than a natural monopoly...
It certainly tops this
idea of capitalist
competition... It's
too hard to set up
competing generators and
powerlines... Do you
know anybody who has two
sets of powerlines going
into their house?
In this country, we buy
utilities for stability
and for yield.
That's exactly why we do
it in Brazil...
Remember, we think Brazil
is the United States, when
we were good...
. . . .
.
I have such conviction in
the sustainability of
Brazil's economic growth,
that I think CPL is a
great, safe dividend
stock...
It pays out a 7.8% yield.
It was actually higher
last week. I've been
waiting for the stock to
come in, so I could talk
about it...
7.8%... and that's a heck
of a lot better than the
5.8% yield you get from
Consolidated Edison Inc.
(ED),
which you know is my
favorite American utility,
and that's starting to
move up at least... the
stock.
The difference is that,
while both of these
companies are stable,
CPL's a growth utility,
because Brazil's still a
growing economy...
It's consuming
ever-greater amounts of
electricity. I
consider it analogous to
where the United States
was, during the economic
expansion of the 50s and
60s...
In the old days, if the
United States sneezed,
Latin America got
Leprosy... but now I
believe that we're in a
world where the United
States can be in
recession, and Brazil's
economy can still chug
along at 5.6% GDP growth.
And that makes me want to
own the stock.
. . . .
.
CPL is concentrated in
some of the most
economically-active parts
of Brazil... the southern
states of Sao Paulo and
Rio Grande de Sol, where
it serves 5.7 million
people. This
company has a lock on 13%
of Brazil's national power
market...
The play here is simple...
. . . .
.
Brazil is a country whose
citizens are growing
wealthier rapidly... and,
as they get more money,
they demand more
electricity as they juice
up their new toys... their
dishwashers... I don't
want to own
Whirlpool Corp. (WHR),
which is the biggest
player down there, because
of U.S. risk... but
Whirlpool washers and
dryers, televisions...
iPods... you get it.
Last year's sales...
guzzling electricity...
16%... Yeah, 16% growth
from appliances
basically... they're using
a lot of juice.
That's fabulous for CPL,
the largest company
selling Brazilians
electricity...
CPL's customers... I
mean, they're adding
customers at an electric
annual rate of 2.5%, which
is well above what any
utility in the U.S. is
doing, and it plans to
double its current
electric generation
capacity over the next 5
years...
. . . .
.
I told you about the
dividend and the safety...
Let me elaborate more on
how CPL is a utility with
growth... boy, are those
hard to come by...
This company has gotten as
big as it is by carefully
purchasing local utilities
in Brazil's fragmented
market. They
generally won't do
reckless deals... they
won't pay up.
For example, this week,
Brazil's government tried
to privatize CESP, a
government-controlled
utility. CPL didn't
bid. They didn't
like it.
They don't appear to just
gobble up anything, the
way we do in this
country... This is
actually something I think
we're seeing a lot more in
Brazilian companies...
it's called discipline.
We saw it with
CVRD (RIO)
walking away...
This has to bode well for
the country's economic
future and its largest
utility.
The bottom line...
. . . .
.
The Bottom Line!:
I think CPFL Energia
S.A. (CPL)
gives you a great
combination of dividend
safety - a 7.8% yield...
Potential growth, as
Brazil's electricity
market grows... CPL
takes larger share, and a
larger slice of the
electric pile... and the
Penn State kids knew more
than Cramer.
. . . .
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Stock Snapshots - Includes
all stocks mentioned above |
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Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
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CPL |
67.48 |
na |
CPFL Energia S.A. (CPL)
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See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
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Most popular
investing books ordered:
(click any book to see at
Amazon.com) |
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Final Segment
2 Title: |
'Mad Mail'... |
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. . . .
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Featured
Stock(s): |
See comments below... |
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After this segment, you
can see Jim's
Sudden:Death picks
here... |
. . . .
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
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Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
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EBAY |
31.72 |
na |
Mad Mail
eBay Inc. (EBAY)
Q:
EBAY's stock,
with a 25 cents
EPS and
P/E ratio =
125, is steadily
gaining in
value. At
the same time,
Valero Energy Corp. (VLO)
languishes,
while sporting
an EPS equal to
$8.50+ and P/E
less than 6.0.
How can this be
rational?
Is the market
just stupid or
is it just me?
JJC:
This is a
classicly-brilliant
question, and
this is one I
struggled with
when I first got
in the
business... and
I struggle with
today...
How can you not
own a VLO, which
sells at such a
low multiple...
and how could
you ever buy
EBAY, which
sells at such a
high multiple?
And the answer
is... 2010.
We value stocks
right about now,
for what they're
going to earn in
what is known as
the "out
years"...
and right now,
VLO's margins
are going down.
They're making
less and less
money per barrel
of oil.
EBAY, as we know
from the Merrill
Lynch upgrade
today, their
numbers are
starting to
accelerate, to
go higher...
We only care
about the
future.
That current P/E
that you're
looking at, is
only on the
current
snapshot.
You've got to
look at the
future snapshot.
It's much
harder, but it's
how you make the
money.
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[
end of final segment ]
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Go to the SUDDEN:DEATH
SEGMENT from
tonight's show
here >>
See current quotes on Yahoo!
Finance from
tonight's show stocks
here >> |
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Symbol keys: |
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A Charitable Trust stock.
- An asterisk next to a
stock symbol indicates that
Jim mentioned it is a stock
that he manages within
his
charitable trust portfolio.
You can see the complete
portfolio
of stocks
here >> |
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Thumbs up - indicates
he would buy the stock or,
at the very least, not sell
the stock. We do our
best to interpret Jim's
opinion on stocks, as we
think it is indicated by his
comments during the show.
Please read his comments to
decide for yourself. |
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Thumbs down -
indicates he has said not to
buy or to sell the stock,
based on his comments
We do our best to interpret
Jim's opinion on stocks, as
we think it is indicated by
his comments during the
show. Please read his
comments to decide for
yourself. |
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Back up the truck -
indicated by Jim, when he
says the stock is so good,
that he would do a
'mon-back' on the stock...
In other words, this is the
sound someone would say to a
truck driver, "Come on
back... " as he is "backing
up the truck" to load up on
his cargo. Translation
for buying stocks:
This recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point. |
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Stumped. - Of the
2,000+ stocks that Jim
Cramer has in his head, for
which he has an informed
opinion, he sometimes comes
across a caller with a stock
he does not know well enough
to opine on... He then
indicates he is stumped and
will have to come back to
it, after he does some
homework of his own on
the stock. This
usually occurs during the
Lightning Round, when Jim
does not know in advance who
is calling, or what their
stock question is about. |
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Definitions of key phrases
used by Jim, known as
"Cramerisms": |
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Definition: 'Pull the
trigger' is Jim's phrase for making
the decision at that point to trade -
either to 'buy' or
to 'sell' (although he
usually uses the phrase for
buying), as if to say you
should feel comfortable
enough to make the final
decision without looking
back... |
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Definition: 'Ring
the Register' is Jim's phrase for
selling a stock, and making
it a final sale, that you
should not look back on.
Put it behind you. |
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Definition: 'Let It Come In' indicates how you
may wait for it to pull back, or have the
stock price come down briefly, as your
chance (after letting it come in) to buy
the rest of your position (i.e., total
number of shares you own in that stock). |
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Definition: 'backing it up'
or 'doing a 'mon-back' is Jim's
phrase for the metaphor of backing up a
truck to load up on a stock by buying
it. 'Mon-back is short for the
imaginary worker saying, 'Come on
back...' as the truck is backing up to
receive its load... Notice that we use
the little truck icon to indicate where
Jim has mentioned this.
Translation for buying
stocks: This
recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point. |
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See more
"Cramerisms" & other
financial phrases
here >> |
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Helpful Websites: |
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See the stocks currently
known to be in Jim Cramer's
Charitable Trust at:
jim-cramer-charitable-trust-stocks.com |
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See the stocks currently
known to be in Warren
Buffett's portfolio
of
stocks at:
warren-buffett-portfolio.com |
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Stock Homework 101:
This is an excellent
upcoming site that provides
resources and links to help
you do that homework that
Jim Cramer recommends after
hearing his suggestions...
StockHomework101.com
This site is coming soon.
Thank you. |
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FastMoneyRecap:
This site will be a quick
summary of recommendations
made by the great Fast Money
TV show crew, that will
offer you a unique service,
to compare their picks to
Jim Cramer's past comments
about those stocks.
Fast Money Recap - Trades
for next day...
Compare these picks to Jim's
comments for the same
stocks. |
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© 2005-2007 MadMoneyRecap.com ■
Important disclaimer: This site is
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Cramer, and is not associated with
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broadcasts. Please note that all
thumbs up or thumbs down
indicators are not always clearly
indicated on the show and are
interpreted by us as accurately as
possible. Some comments have been
edited for brevity and clarity,
and extraneous material omitted. Please rely on watching
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and reading the text of the
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cannot be guaranteed. Please
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