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Thursday, 04/10/08
Posted 04/10/08, 10:49
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Thursday, 04/10/08 |
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Dow Jones: |
12,581 |
+ 54 |
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NASDAQ: |
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2,351 |
+ 29 |
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S&P 500: |
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1,360 |
+ 6 |
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Opening Segment 1
Title: |
'From Russia With
Love'
'Drink It In'
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. . . .
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Featured Stock(s): |
Central European
Distribution Corp. (CEDC)
See CEDC's official
website
here.
See the Yahoo!
Finance profile for
CEDC
here.
See Opening Segment 2,
below...
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC: So
far, I've given you three
just fantastic Russian
stocks... so it's time to
branch out to a new
country... because the
whole region is just as
hot as a Stalin pipe
organ...
Practically every one of
these countries is
experiencing rapid
economic growth...
incomes are rising and
people are buying more of
everything...
So, tonight, we're moving
to Poland!...
With 6% GDP growth and a
new government... one that
adheres strictly to the
principals of governance
of, by and for the
corporation... that's
privatizing government
assets and government
taxes... not to mention a
currency that's become as
strong as the dollar is
weak, I'd rather own a bad
stock of a Polish company,
than a decent American
one...
But which stock?...
How about a name that's so
stereotypically Eastern
Europe that you have to
believe a lot of fund
managers will buy it as a
proxy for the region, when
they catch onto my
theme... and we are early,
okay?...
I'm talking about
Central European
Distribution Corp. (CEDC)...
. . . .
.
It's the #1 producer of
Vodka, in a country that
really knows how to make
vodka... Poland.
In addition to being the
top importer of foreign
booze, it's the top
alcohol distributor in
both Poland and Hungary...
CEDC is more of a play on
drinking in Eastern
Europe. It's a
play on classier drinking
in Europe, more
importantly...
See, as people make more
money in Poland, they
upgrade from the $8... to
the more expensive brands
that CEDC distributes...
Think SKYE Vodka...
or, if you're a cognac
man, they distribute
REMY... Brandy
lover, perhaps?... They
distribute St. Remy...
If you're like me, you
like your scotch... CEDC
is Glen Fiddich...
How about beer?...
Guinness... Corona... I'm
just naming the most
recognizable brands that
CEDC distributes...
because, all told, the
company distributes 900
different ones...
. . . .
.
The reason to love... CEDC
is that they're conquering
the Russian vodka market.
They bought 85% of the
company that makes the
top-selling premium vodka
in Russia... It's
called Parliament Vodka...
The brand is only 2% of
the whole Russian vodka
market, but it fits with
the liquor upgrade
story...
Since the Russians are
capitalists now, they're
practically required to
buy the top brand of vodka
whenever they can afford
it, so that everyone
around will know they've
got money... Conspicuous
consumption is the beating
heart of capitalism... and
CEDC is the booze the
Russians want to
conspicuously consume...
. . . .
.
Best of all, we know we're
getting into CEDC early...
How can I tell?...
Even though seven analysts
already cover the stock,
not a single one is from a
major bank. The
stock has attracted zero
attention from the
analysts who really
matter, and that's a great
indicator that hardly
anybody knows about it
yet...
As CEDC picks up coverage
from the major investment
houses, this stock should
go a lot higher...
. . . .
.
The stock trades at just
22x expected 2009
earnings... Don't
blink... "just" is because
it's a multiple that's
very cheap. This has
got 24% long-term growth.
Every one of these stocks
that I've mentioned has
doubled the typical growth
of an American stock...
sometimes tripled.
Here's the bottom line...
. . . .
.
The Bottom Line!:
Central European
Distribution Corp. (CEDC)
is selling booze in
Poland... in Russia...
in Hungary... It's
the market leader in
Poland. It's got the
most prestigious brands in
Russia... but,
honestly, think about
it... They're
selling Russians vodka.
What more do you need to
know?
[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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Most popular
investing books ordered:
(click any book to see at
Amazon.com) |
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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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CEDC |
61.19 |
na |
Central European Distribution
Corp. (CEDC)
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Mutual-Fund-Holdings.com
NEW RESOURCE!
See Ken Heebner's CGM
Focus Fund
Top 25 holdings - The No.
3 Top-Performing Mutual
Fund in 2007
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Final Segment 1
Title: |
'No Stock Left
Behind' |
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. . . .
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Featured Stock(s): |
Baker Hughes Inc. (BHI)
See BHI's official
website
here.
See the Yahoo!
Finance profile for
BHI
here.
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC: I'm
talking about the "Ketchup
Trade"... where you take a
sector that's been going
higher... You find a
stock that's lagged the
group... and, if you
believe it can catch up
with its peers, you buy
it...
I love these plays,
because they're a great
way to take an area, where
you've already made money,
and do it all over again
with your Ketchup stock...
In this environment, where
caution is king, Ketchup
Stocks are relatively safe
buys, because their
Ketchup status means they
have relatively lower
valuations than the other
stocks in a hot group...
That doesn't mean they
can't go lower...
It does usually mean that
declines will be less
frequent and slower
because, on a relative
basis to their cohort,
they're so cheap...
My next Ketchup pick is Baker Hughes Inc. (BHI)...
an oil service stock that
I have not recommended on
this show at all... no.
And you know I've
recommended a lot of them,
but not this one...
But it's time...
. . . .
.
BHI has a long and proud
history... This is
the company where old
Howard Hughes' money came
from... but lately,
that proud, high-quality
history has been
tarnished, and it shows in
the stock.
Everybody who's watched
the show more than once
knows that I'm a big fan
of the oil service stocks
since the show started,
frankly... and since
January 22nd, they've
rallied terrifically in a
really crummy market...
The OIL SERVICE SECTOR
INDEX (^OSX)
is up 18% from that
date... The
Oil Services Holders (OIH)
is up 21%... These
are sector funds...
This move's been driven by
an overall better
environment for the
sector... obviously, with
oil at $110 (a barrel),
right...
With drilling increasing
everywhere, and with North
American land drilling,
which had been the
albatross... the
millstone, if you like...
around the neck of this
group, and it's no longer,
okay...
. . . .
.
Now, I mean, look...
I screw up... but my
endless praise of
agriculture, steel,
mineral and oil and gas
companies has been spot
on... so I have some
Cramerican cred (i.e.,
credibility) going on here
when we talk about BHI...
Unfortunately, BHI hasn't
been invited to the oil
service party... Get
this... It's only up
3% since January 22nd...
That wasn't by chance.
There are good reasons why
BHI has lagged behind...
It's not as good as the
others...
But listen... I also
think we now have some
good reasons for thinking
the stock is getting
better, and is ready to
play catch up to the
group...
. . . .
.
A stock's sector counts
for 50% of its
performance... and
oil service is, along with
ag and minerals, one of
the strongest sectors
there are... and
this is the worst house in
the best neighborhood...
Now, remember, the worst
house in a best
neighborhood... BHI... is
a lot better than the best
house in the worst
neighborhood... say
banking or brokerage.
. . . .
.
There are two big-picture
problems that has held
this one back...
One is execution... The
Street doesn't have much
confidence in BHI, because
it was less aggressive
than its peers in
penetrating foreign
markets, and so it had to
catch up with its peers on
that front too.
Now, just so you know...
Remember, long-term Cramer
recommendation and fave,
Halliburton Company (HAL),
at $29-30, got its act
together and said that it
was going to be able to
change and become more
international...
That was it...
HAL... Nobody liked it
except for us...
Remember, we were at the
University of Texas...
That stock was at $28 that
day. That was a year
ago. It's at $43.
BHI could be son of
HAL...
. . . .
.
Now, here's something that
HAL didn't have, that BHI
has though...
It's been dealing with a
deferred prosecution
agreement it made with the
Department of Justice...
relating to misconduct in
Kazakhstan, under the
Foreign Corrupt Practices
Act. BHI has said
the agreement hurts their
ability to compete
internationally... because
it limits the number of
foreign agents they can
use to facilitate their
transactions.
The agreement doesn't
expire until April of next
year but, as we get closer
and closer to expiration,
I think this issue will
exert less and less
downward pressure on the
stock. It's
basically built into the
stock...
. . . .
.
Beyond this big stuff,
there's the problem of
BHI's last quarter... one
that thoroughly under
whelmed the Street.
The company's
international revenue
growth lagged that of its
peers. BHI
said that it expects its
margins for the year to be
lower than it had
previously forecasted.
That crushed the stock.
But, now, we've got
lowered expectations.
We like that too...
Well... what is to like
about BHI proper?... With
this litany of negatives,
why do I deem it Ketchup
worthy?...
First off, BHI still has
some positives going for
it. It's a ROW-er... 58%
of its revenues come from
the rest of the world.
It's now growing all over
the globe, especially in
Brazil and Russia, where
there's some really
aggressive drilling.
Despite the tough
competition, BHI is still
ramping (i.e., growing)
its earnings at 21% a
clip... Now remember, you
don't have a lot of
companies growing at
greater than 10%. This has
got 21%.
I think a big part of this
stock's catch up will be
fueled by the recovery in
U.S. land drilling, which
has just been a total bear
market since (Hurricane)
Katrina...
BHI seems to be expecting
little to no increase in
the rig count in North
America. But things have
already changed, since the
company gave that guidance
when it reported last
quarter... Rig counts in
the U.S. are up by 83...
76 more land rigs and 7
more offshore rigs in the
U.S....
Since BHI probably based
its guidance on the
assumption of a flattish
U.S. rig count, this is
UPOD now... this is the
under-promise and
over-deliver... I think
the recovery of land
drilling in the U.S. will
mean BHI does better than
predicted, giving the
Street a piece of good
news for a change, and a
chance to upgrade...
. . . .
.
Why is land drilling so
hot?... C'mon...
Natural gas! We've
been saying that theme,
right... Natural gas
prices have increased so
much... We heard it
from Apache Corp. (APA)
this week... How
about XTO Energy Inc. (XTO*),
when Bob Simpson (CEO)
came on?... We heard
it from Chesapeake Energy Corp.
(CHK)
with our friend, Aubrey
McClellan (CEO)...
Devon Energy (DVN)...
Don't forget
Anadarko Petroleum
(APC),
Jim Hackett (CEO)...
Remember when he said
there's going to be a lot
of drilling on our
show?...
This is fabulous for BHI,
because it makes the drill
bit and drilling fluids
used in the process...
drilling systems and
services to evaluate rock
formations and assess the
integrity of wells... This
is half their business.
It's the nuts and bolts
you need to actually
drill.
The new drilling also
benefits BHI's other
half... it's completion
and production division.
This provides construction
services for wells after
they're drilled.
And then chemicals and
pump systems needed for
production...
So, when all these
companies say they're
drilling more, that means
more demand for both sides
of BHI...
. . . .
.
We also know that BHI has
been aggressive in its
buyback in the first two
and a half months of this
year... It's buying
shares at an average price
of $68.95. That's
only 3 points lower than
the current price and,
even though there's only
$272 million left in BHI's
buyback, it's got billions
of dollars in cash.
They could use it to start
a new buyback.
You know that stock's
going to spike when they
do that...
I believe it will happen,
if the stock goes any
lower. They've
proven they'll intervene
at around the $69 level.
That's a definite plus.
Here's the bottom line...
. . . .
.
The Bottom Line!:
Baker Hughes Inc. (BHI)
is, I think, without a
doubt, the worst oil
service company in the
best group... but, it's
benefiting from all the
same things that have
driven the rest of the oil
service stocks higher, and
it hasn't moved.
With the recovery in U.S.
land drilling, I think
that BHI, frankly... No
matter how inefficient
they were, and how poor
their execution was, I
think BHI starts catching
up.
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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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BHI |
72.76 |
na |
Baker Hughes Inc. (BHI)
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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
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
the show yourself, doing
your own homework,
and reading the text of the
comments to draw your own
conclusions. Also, data presented
on this site should not be used to
make investment decisions and
accuracy, although attempted,
cannot be guaranteed. Please
consult with your own financial
advisor for professional advice. |
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