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Wednesday, 01/09/08
Posted 01/09/08, 11:18
pm |
(Scroll down to see Jim's
comments below) |
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Today's date:
Wednesday, 01/09/08 |
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Dow Jones: |
12,735 |
+ 146 |
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NASDAQ: |
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2,474 |
+ 34 |
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S&P 500: |
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1,409 |
+ 18 |
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Opening Segment 1
Title: |
'Know The Drill'
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. . . .
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Featured Stock(s): |
FMC Technologies, Inc.
(FTI)
See FTI's website
here.
Yahoo! Finance profile for FTI
here.
Google News search for FTI news
here.
See Opening Segment 2,
below...
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JJC: I always
stress opportunity on this
show... always...
opportunity to find stocks
that will work on the
fundamentals, and get a
real boost, if things
actually go right... and
that's what happened
today...
. . . .
.
That's why we return to
the same themes over and
over and over again...
agriculture...
infrastructure...
healthcare...
And, most importantly,
oil... because we're
running out of oil...
And that's part of the
angle we're playing today,
because I found a stock
that wasn't up that I
thought should have
been... and also because
of a January celebration
of Christmas...
Last night, StatOil, the
big Norwegian oil and gas
monster, tells us it's
running short of oil... I
mean, they're a big oil
company and they don't
have any oil... They
say they won't reach
production levels that
analysts had expected in
2010 and 2012... and
they're capital
expenditures to keep the
oil flowing is much higher
than expected... they have
to be.
They've got to drill.
If you're an oil company,
you need oil..
Hey, BP plc (BP)...
same thing. The
stock was down the worst
in five years... Why?...
Analysts are chattering...
they're running out of
oil...
What do BP and StatOil
have in common, other than
they're over there?...
They need to drill, and
they're both part of Paz
Floor... it's the name of
an oilfield... a gigantic
oilfield off of Angola...
an offshore project.
StatOil owns 23% of this
project. BP owns
16%.
If you ask me, there's one
way to play it... and that
is... FMC Technologies,
Inc. (FTI)!
. . . .
.
This is the ultimate tech
drilling company.
FTI a big contract for Paz
Floor just the other day.
But, of course, the
market's selling off... No
one's paying attention to
anything, right? No
one's paying any attention
to anything good...
The contract was totally
out of the blue, but it
makes a lot of sense...
This is a stock - one of a
bare handful of stocks -
that this market has not
been able to keep down...
Kind of remarkable.
The stock has held up.
It's just $6.50 below its
52-week-high... that it
hit in October, at the end
of October, and it's well
up for the year so far...
Now, in Cramerica, we
think oil's going to $125
this year, and the
producers of oil need to
spend more and more money
investing more heavily in
technology, than they ever
had to before. Oil..
tech... what a combo.
Better than PCs... Better
than semis...
They need to use the tech
just to replace the
maturing fields, and a lot
more than that... if they
want to grow.
So, what's FTI's place in
the foodchain?... What do
they actually do?...
. . . .
.
Well, this is a company
that makes... Sub-sea
trees... They're
machines that you put on
top of underwater oil
wells after you finish
drilling that regulates
the flow of oil and gas,
and also to inject the
chemicals, water, gas and
other liquids needed to
keep a well flowing
healthily...
You need one of these
trees for every well!...
FTI is the largest maker
of (these) trees...
controlling about 40% of
the market for them.
They're next biggest
competitor is Cameron
International Corporation
(CAM),
which has 30% of the
market.
In a world where oil is
going to $125, and
reserves are depleting,
companies need to drill
more in offshore, nutty
locations like Angola...
FTI should be practically
printing money! And
they pretty much are...
They're winning these big
contracts like the Paz
Floor field in Angola...
that was for 49 trees.
$980 million. Hey,
money grows on these
trees... a much larger
amount of money than
anyone thought.
FTI was also one of two
companies awarded a
sub-sea equipment and
services contract, from
the struggling StatOil...
The whole thing could be
worth $2.6 billion to $4.4
billion...
There are more sub-sea
contracts coming, which
should keep the stock
going higher.
. . . .
.
Over the next 15 months,
there are at least 12
sub-sea contracts for
trees that are going to be
coming, and every one of
them is going to be worth
millions...
. . . .
.
Given FTI's pre-eminence
in the sub-sea tree
market, and the need for
these trees, it's not
outrageously optimistic to
expect them to get more
big wins... and those big
contracts don't include
the big Petroleo
Brasileiro (PBR)
find... that's the
offshore Tupee oil
field... that is so big,
but it's going to use
every bit of technology
that we have. It's
very hard to get to.
FTI is a great play, but I
don't want you to get the
impression it's going to
be easy to make a lot of
money right now.
We had a nice day today,
but you know I'm
emphasizing caution
everyday on the show...
We're really oversold.
The market bounces... it
hit the August low of
12,500... it bounced...
but I think emphasizing
capital protection -
because the economy's in
terrible shape - is the
right thing to do...
Who knows if the Fed
notices... They're
concerned about inflation
in food and oil... Hey,
this is a great play on
them. They kind of
exclude all the real
problems...
. . . .
.
Now, I wouldn't be
recommending this stock,
if I didn't believe it
also had some downside
protection... I've
got two things going for
it that should protect the
stock from falling, okay?
First, they've got a
gigantic buyback... Even
though it's an oil service
stock, it's got 14 million
shares left to buy - 11%
of the stock outstanding.
Pretty big, right?...
That's your cushion, if
for some reason the
insanity of this market
starts to bring down
high-quality members of
the oil patch...
The second piece of
protection is that, even
though the stock is $6.50
off its high, it's still
pretty cheap, trading at
22x earnings with a 20%
growth rate... You know my
rule of thumb... if the
price-to-earnings (i.e.,
the P/E) is lower than the
growth rate, and the
fundamentals are sound,
then you've got a real
cheap, cheap, cheap stock
- buy, buy, buy!...
I should also mention that
FTI plans on spinning off
their legacy business by
the middle of the year...
it's the old food
machinery business and
airport recs... They
can sell it for a nice
chunk of change.
Management expects they're
worth anywhere between
8-11x their earnings
before income, taxes, and
depreciation... It's
a $650 to an $800-900
million legacy business...
That spinoff will make FTI
into the pure play in oil
and tech that we all want,
you and me...
. . . .
.
The Bottom Line!:
Oil's still
working... the market's
looking a little better...
FMC Technologies, Inc.
(FTI)
is the best way to play
the next round for
deep-water contracts for
all these gigantic oil
companies that are
disappointing people,
because they're not
finding enough oil.
[See Jim's 2nd Opening
Segment stock picks
below... ]
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See all of tonight's stocks'
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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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FTI |
61.26 |
62.28 |
FMC Technologies, Inc. (FTI)
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Final Segment
2 Title: |
'On The
Line'....
Special Interview
Eric R. Dinallo,
Superintendent
New York State
Insurance
Commission |
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. . . .
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Featured
Stock(s): |
No specific
stock picks...
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Jim's comments BEFORE
the interview:
At the fulcrum of the
weakness of this market
are companies that insure
gigantic structured
product, meaning these
kind of bizarre
instruments that we know
are collapsing, like
CDOs... collateralized
debt obligations... and
also insure municipal
bonds for, perhaps, you,
me, for little guys too...
people that own municipal
bonds.
Now, these companies are
regulated by the SEC
(i.e., Securities and
Exchange Commission), but
they're also regulated by
the most important state,
when it comes to
insurance, and that's New
York State. And I
think there are real
problems with this
group...
We know that there is -
from a disclosure
statement today we got
from
MBIA Inc. (MBI)...
there is an inquiry open
from New York State about
the disclosure problems at
MBI, and I also know that
New York State's insurance
superintendent has invited
Warren Buffett
in to open up a new - you
might have seen it in The
New York Times - a new
insurance company that
actually doesn't have any
of these liabilities...
So, that's why I'm so
thrilled to have Eric
Dinallo. He is a guy
who worked with Elliot
Spitzer, when Elliot was
the AG (attorney general)
of New York State... He's
done a superior job
everywhere he's been, and
I'm thrilled to have him
on Mad Money...
. . . .
.
Jim's comments AFTER
the interview:
Eric Dinallo's the most
important and powerful
man, in the insurance
business, in the country.
New York State - not the
SEC - New York State does
the lion's share of the
work... You heard what he
said... I'm concerned.
I don't think
Buffett's
buying any of these
companies. I think
he could be trying to
insure some of them, but
at the highest rate
possible... Why
would he want to buy them,
if he's trying to put them
out of business?
Dinallo knows what he's
talking about. And
now I hope you do too.
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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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na |
na |
na |
na
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na |
na |
na |
na
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Go to the LIGHTNING ROUND 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
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stocks. |
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Important disclaimer: This site is
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thumbs up or thumbs down
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interpreted by us as accurately as
possible. Some comments have been
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and extraneous material omitted. Please rely on watching
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