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Monday, 01/07/08
Posted 01/07/08, 11:59
pm |
(Scroll down to see Jim's
comments below) |
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Today's date:
Monday, 01/07/08 |
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Dow Jones: |
12,827 |
+ 27 |
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NASDAQ: |
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2,499 |
-
5 |
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S&P 500: |
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1,416 |
+ 4 |
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Opening Segment 1
Title: |
'Yield Of Dreams'
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. . . .
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Featured Stock(s): |
Altria Group Inc. (MO*)
Verizon Communications Inc.
(VZ)
Bristol-Myers Squibb
Co. (BMY)
Dow Chemical Co. (DOW)
See Opening Segment 2,
below...
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JJC: After a
week in which the Dow lost
461 points... a just
savage beating... there's
one thing we always do on
Mad Money... we try to
think optimistically... we
sift through the rubble
for things we can back the
truck up...
Stocks that went down
through no fault of their
own, simply because they
were caught in the
crossfire...
When we did this almost a
year ago, we looked for
growth. We made you
a fortune. It was
the week of March 6th...
after the huge downturn at
the beginning of that
month...
. . . .
.
And we found four growth
stocks, because growth was
what was working then...
Those four stocks...
General Cable (BGC),
First Solar (FSLR),
Chemed (CHE),
and
Akamai (AKAM)...
are up an average of - get
this - 100%, compared to
1.5% for the S&P 500,
since the last time we
sifted through the rubble.
I call that
outperformance...
We're going to do the same
thing we did last year.
Only the market has
changed...
We're no longer focused
entirely on growth now...
In this market, we're
looking for stocks that
can perform, even in the
face of the 'they know
nothing' Fed...
We're looking for a blend
of capital appreciation
and capital
preservation...
We're also dealing with an
environment where
treasuries - that's the
U.S. government bonds -
have an enormous rally...
Since treasuries have
rallied, the yield -
that's what you get from
owning the bond - on the
10-year is just 3.87% now.
And, with the 28% ordinary
income tax you pay on that
yield, you get to keep a
paltry 2.79%.
Now, smart shoppers you
know are going to look in
other aisles... stock
aisles... for better
bargains.
So now we're looking for
stocks that have good
growth, strong secular
trends at their backs, or
- or maybe all of them -
catalysts that can propel
them higher... and most
importantly, dividends...
dividends that make them
more appealing than
treasuries...
. . . .
.
So again, what we're
saying... bonds represent
very little value because
the yields are so low...
we've now done a sift
through... We
did a very big screen for
all the stocks that have
come down, and have now
found stocks with good
dividends that far exceed
the return of bonds here,
after taxes...
I've got four of these
great bargain stocks...
particularly for those of
you who want a mixture of
preservation of capital
and capital
appreciation...
And they are...
Dow Chemical (DOW)...
a stock I've never
recommended on this show
ever...
Bristol-Myers (BMY),
another stock that I've
never recommended ever...
Verizon
(VZ),
which I've off and on
again recommended against
AT&T Inc. (T)...
I like VZ more than T...
and...
Altria (MO*),
which I own for
my charitable trust... and, boy,
was that stock smokin'
today.
. . . .
.
All of these stocks have
higher yields than what
you'd get from a 10-year
treasury, before taxes...
All of these companies
have had consistent growth
too...
. . . .
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The Bottom Line!:
After a big
selloff, we pick among the
rubble for good value and,
right now, I believe that
means, again,
Altria (MO*),
Verizon
(VZ),
Bristol-Myers (BMY),
and Dow Chemical (DOW)...
[See Jim's 2nd Opening
Segment stock picks
below... ]
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See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
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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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MO* |
77.23 |
78.12 |
Altria Group Inc. (MO*)
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VZ |
43.35 |
43.36 |
Verizon Communications Inc.
(VZ)
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BMY |
26.04 |
26.44 |
Bristol-Myers Squibb Co.
(BMY)
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DOW |
37.18 |
37.75 |
Dow Chemical Co. (DOW)
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Final Segment
2 Title: |
'Petro
Active' |
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. . . .
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Featured
Stock(s): |
Petrobras
Energia
Participaciones
S.A. (PZE)
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JJC: I've got
an under-covered,
under-exposed little Latin
American energy play for
you...
I am going to say it up
front... it is risky.
But the reward could be
big...
And the stock is...
Petrobras
Energia (PZE).
This is not to be confused
with its parent company,
Petroleo Brasileiro
(PBR)...
Now that was confused last
month and, in an erroneous
report, PZE went up, about
a big oil find that should
have spiked PBR...
So now it's come back
down, and I want to bring
it to your attention...
PZE is an oil and gas
exploration and production
company that's majority
controlled by PBR.
PZE operates in
Argentina... their biggest
country by far... 66% of
their production...
Venezuela, Peru, Ecuador,
Bolivia... that's the rest
of their stuff.
These aren't the most
stable countries, and not
all of them are what you'd
necessarily call friendly
to capitalism, but the
slightest bit of economic
liberalization in any of
them could send this stock
a lot higher...
Look, after the last
election in Venezuela, I'm
thinking they're going
more our way... I'm
not worried about Hugo
Chavez (President of
Venezuela) picking on them
at all, because PZE is a
fellow Latin American
company, and Chavez, as
angry as he is, has a
Pan-Latin-American
ideology...
PZE also has
petro-chemical refining,
transport and electricity
operations in Argentina,
Brazil and Ecuador.
These are developing
countries that are putting
through infrastructure and
PZE's the play.
. . . .
.
I will not hide the bad
here...
PZE is a subsidiary of
another company...
In Mad Money, in
Cramerica, we tend not to
favor subsidiaries... we
like the parent... but PBR
could pose as a big
brother, and help them out
with their technological
know-how...
They're exposed to the
riskier parts of Latin
America... more reward...
and they're not exploring
in Brazil, which is where
their parent company is
totally kicking butt all
over town.
PZE's operating in
countries where energy
prices have been highly
regulated with price
controls and export taxes.
That said, high oil is
high oil... and even the
most confiscatory
socialists... can only do
so much to eat into PZE's
profits.
. . . .
.
The thing that I like most
about PZE is that it's
under-covered. Only
five analysts are on the
stock, with only one -
Merrill Lynch - rating it
a buy. Three
holds and a sell... That
takes out a lot of the
risk. Only Merrill
could downgrade it.
The other guys could all
upgrade it. This is
an under-the-radar stock,
and those always have huge
potential to make you the
big bucks...
PZE's also seen some signs
of improvement in
Argentina... Pricing
has gotten stronger,
especially in their
Argentine refining
business...
We're also starting to see
demand for Argentine
energy companies, which
PZE definitely counts
as... Two-thirds of
their business is in
Argentina... so the
Argentine energy sector is
heating up. It could
make a comeback. PZE
is a great way to play
it... buy, buy, buy!
. . . .
.
Do I like this stock as
much as I like PBR?...
No way.
PZE is far more risky, but
most people will write it
off as being too risky,
because its assets are all
in countries where,
frankly, we don't really
want much exposure...
I think that's wrong
though. It's a new
world out here...
It's a new world...
If these countries become
the least bit more
capitalistic, this stock
should soar.
. . . .
.
The Bottom Line!:
Just like they say at
another network... you
report, I decide... Oh no,
they don't say it, they
just do it...
Petrobras Energia
Participaciones S.A. (PZE)
is an energy company
that's not for the faint
of heart. But, if
you can tolerate the risk,
I think it pays off real
big, off the pin action of
Latin America.
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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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PZE |
15.75 |
16.23 |
Petrobras Energia
Participaciones S.A. (PZE)
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