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JJC: I
know... I know today
was really bad... I
know today was one of the
worst days in a long time.
It's a cheap alcohol on my
very own dirty linoleum
floor day, if there ever
was one.
A down 395 day can really
make you feel desperate
and bearish and
hopeless...
But there is hope, and
that's why I'm here. I
know when it gets this
awful you wanna give up or
panic or just scream and
pull your hair
out...believe me, I
sympathize, days like
today are the reasons why
all my hair fell out...I
still have some here but I
guess it has to be
down-800 to make that go
away...
This may be the fifth end
of the world day we've
seen just in this very 18
months. But with oil
prices so high and the
regional banks looking
like they're rolling over
like dominoes, it's not
hard to believe that it
really might happen this
time around.
At these moments I know
many of you turn off the
TV...you want to give up.
Right now it's easy to say
it will never get
better...that you just
can't make money in the
market any more...that
it's too painful...
Today's market did this to
any sense of bullishness
out there (puts out
cigarette and steps on
bull with foot)...but I
still believe that there
is always a bull market
somewhere...
I think this moment's a
terrible time for you to
abandon ship, however
emotionally difficult that
may be to accept. And
remember, do some
arithmetic. Average
in yesterday's fantastic
gain with today's horrid
losses, and you have it
down-200 day in 48
hours...not even a sharp
stick in the eye.
I've got to tell you, the
spike of $10.75 in
oil...even I was freaked
out by it...that is,
unless you're a huge
believer in usual
suspects... And we
continue to suggest you
round them up... on any
weakness...and you didn't
get any (weakness) today,
even down 400 points...
Natural gas?... Most of
them up, because it is the
year of natural gas.
Agriculture?...
Because seeds are our best
long-term hope for
renewable energy...even
though we hate
ethanol...every time
Monsanto (MON)
comes up with a new seed,
it's like a giant oil
find.
Minerals, coal, copper all
pretty much up or flat...
And finally, of course,
the drillers, which remain
our very faves.
Everyone else is showing
you the lowlights of
today, they're running
lowlight films of the
patch with guys screaming
over there...
lowlight films of the
Israeli, Iran thing...
I want to show you the
stocks that I think will
be the highlights...not
today, but for next week,
so you can still make
money off them...
Because, after a huge sell
off, you get a short-term
buying opportunity...
in one particular group of
stocks...the stocks that
would have gone much
higher if it were not for
this overall market
selloff based on weak
financials, and oil
spiking, and worries about
a potential conflict in
the Middle East...
And these could go to
where they should have
been this week, maybe over
the next month, if recent
history repeats itself.
These wondrous stocks,
that can buck today's
bearishness, where are
they?...
They're the companies that
this very week reported
the biggest beats of the
estimates... the ones that
far exceeded expectations,
but their stocks were held
back or taken down hard by
the general tide of
oil-related negativity,
even as not one of them
had anything to do, or had
their sales curtailed, by
higher oil.
That's why I'm offering
you a game plan for next
week...
I want you to pick among
the bearish rubble to find
the high-quality bullish
stocks that would have
gone higher if it were not
for this dreaded
decline...
I've got four stocks that
fit the bill for what I
suspect will be a hard
opening on Monday...
You'll get your
prices...don't be
aggressive...don't buy
after the close...
Don't do any of those
stupid things like I saw,
by the way, in
Windstream Corporation
(WIN)
last night.
Alright, now just to
remind you that we
actually have a little
rigor on this show...that
I'm not just pulling all
this out of a bull's
mouth... How about a
little proof that our
picking-among-the-rubble
methodology works...
that you should be looking
for buys right now, in the
wake of this sickening
decline?...
After the enormous sell
off in the week of March
2007... that was nasty...
I recommended a series of
stocks
during the week of March
6th... It felt a
lot like today... stocks
that I felt would have
been up big if not for the
whole market taking a
beating.. I felt
they would have been up
big because, like these
four I'm about to give
you, these companies
reported huge estimate
beats just the very week
they were obscured by the
market. They
were
General Cable Corp. (BGC),
Chemed Corp. (CHE),
First Solar (FSLR),
and
Akamai (AKAM)...
Do you know what these
stocks were even with this
horrible market last year
and this horrible market
now...do you know what
these stocks were a month
later? They
were up an average of
16.4%, which more than
tripled the performance of
the S&P over that same
period.
It worked then, and I
believe it will work again
now...
. . . .
.
I've got four stocks I
think you should be buying
next week, maybe right
into a bearish opening...
as "picking through the
rubble" plays, these are
your game plan...
The first, and this the
most obvious one, the
one... the one that you
got a total break on today
that I didn't think you
deserved to get, because I
know you're a naysayer
about the store... The
first is
Wal-Mart (WMT*)...which
reported strong may
same-store sales just
reported the other day...
driven by some of the $600
tax rebates, grocery store
sales, but mostly because
of it's remodeling, it's
more aggressive CEO Lee
Scott, and yes, the
cheapest pricing in the
world.
Yes, WMT is a trade-down
play in a weak economy
when people are trying to
save money and spend less.
WMT is where they go. They
beat by a penny on May
13th, and the
international business is
expanding with plans to
enter Russia. You know
that the Russian
department stores won't
hold a candle to even this
WalMart.
Before WMT beat earnings,
the stock was at $58
bucks. Now, with the
stock at $58.37, after
falling 2.3% today, you're
getting what I think is a
"buy, buy, buy!"
opportunity. At a
price that's barely above
where the stock was before
they reported that blowout
month, come on... that's a
steal! Oh and, by
the way, with $4 gasoline
going to five bucks, where
you know that's headed...
I'm switching to WalMart
shopping too, and WalMart
has gotten more fun to
shop at lately, I kid you
not... Lee Scott has
got the place feeling down
right "Target-ish."
. . . .
.
The second stock I'm
recommending is a familiar
name and the name is Brown-Forman Corporation
(BF-B),
which beat by 12 cents, a
17% upside surprise when
it reported yesterday, but
everyone immediately
forgot that Jack Daniels,
Southern Comfort and
Finlandia Vodka just gave
you a fantastic earnings
report. These are
all indeed all the
necessities to have on a
dirty linoleum floor if
you were down-395 day.
It's international that's
growing... Jack grew
in the high single digits
overseas. This is the
sheik brand. I can
tell you in all the bars
that I cruise... people
actually say, "give me
Jack Daniels"...
When I went in, it was
just like give me a
bourbon. Now they identify
it by name, some of them
just call it Jack like
he's their buddy-pal,
friend. Brown Forman now
gets half of its earnings
from
ROW...the rest of the world, I think
it can go higher, as it
increases it's
international sales,
especially now with the
weak dollar helping, and
it's new marketing and
sales strategies
stabilizing it's U.S.
business. I still don't
see a lot of people
ordering Chinese bourbon
or Indian bourbon, they
just don't. They drink
American bourbon.
The stock is down 1.5%
today but still up 7.1%
from where it reported. I
believe it would have gone
much higher today, not
lower, if not for the
selloff. You don't drink
less liquor in hard times,
you drink more hard liquor
and Brown Foreman is your
HQ.
Oh and by the way, just so
we're at it, I like the
Herradura... lately
it's become my tequila of
choice.
. . . .
.
The third stock I've
picked out from this
rubble is Copart Inc. (CPRT).
This is the company that
makes money off of
salvaging cars and other
vehicles. It beat by
four cents what it
reported after the bell
Tuesday...8% upside
surprise... It was
down 1.7% today... and it
is up 5.9% from Tuesday's
close...you're not going
to get this one below
where it reported, that's
not going to happen.
It's up 16.3% from when we
had CPRT's CEO on April
23rd...and up 30% since I
first recommended it.
I think CPRT can keep
going higher because it's
a scrap play...strong
steel prices... you need
scrap...that's why
Nucor (NUE)
made their big
acquisition... Everyone
needs scrap, scrap...and
because the company's
expanding... It's
scheduled to add 10-15
locations to North America
over the next year...that
will let it collect more
salvage cars, lower towing
costs. This is the single
best play on the steel
shortages that I know of.
. . . .
.
Finally, I like Integra Lifesciences (IART).
This is a new name for me,
I have not talked about it
before...it's symbol is
IART. This is a
surgical implant medical
device stock. It beat it's
earning estimates by nine
cents when it reported on
Wednesday. That's a
mega 22% upside surprise.
The stock is only down 10
cents today... it's only
up 27 cents since it
reported... That's
ridiculous.
Integra is a demographic
play, it makes
neurosurgical and
orthopedic implants, 37%
of its business... which
I'm sure are going to be
in higher demand as my
generation ages. It
also looks like a great
obesity play, as it makes
spinal implants... and
heavier people tend to
have more back problems.
You don't stop trying to
alleviate pain just
because the economy's
slumping or gasoline is at
five bucks.
. . . .
.
The Bottom Line!:
After a big down day, I am
urging you to get off your
dirty linoleum floor...
Don't get discouraged.
Look for good deals...
companies you can get on
the cheap, thanks to the
negative action.
Pick among the rubble...
find the bull market with
me... and maybe do some
homework over the weekend
to buy
Wal-Mart (WMT*),
Brown-Forman
(BF-B),
Copart
(CPRT),
or
Integra Lifesciences (IART)...
particularly if they open
down next week.
And remember... these
companies can't disappoint
their earnings. They
just reported them!
. . . .
.
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JJC: I want
you to view the brutal
mauling that we took today
with the market down 395,
not as a reason to feel
folded, to feel
spindled... to feel
mutilated...but as an
opportunity actually to
buy a great stock...
And that stock is
Ingersoll-Rand (IR)...
which should have gone
higher today...
I mean, you're getting it
at a lower price than you
should. Do not
get me wrong. This
was a catastrophic day.
The house of pain...that's
the address...But on big
down days what do we do?
Do we jump out the
window?...Do we say (train
wreck)?... No, what
we look for is good
stocks, and we say all
aboard...and that's
exactly what I think IR is
at $42 and change.
Yesterday, IR completed
its acquisition of
TRANE...the heating
ventilation and air
conditioning HVAC
company...that was the
last piece left of the
broken up American
Standard...thank you Fred
Poses for making so much
money for everyone...
This is an acquisition
that has completed the
final step in the
transformation of IR for
the archetypal cyclical
smoke stack stock to a
strong economy... that's
what it was levered to
now...to a well how about
a kind of economy we got
after today's unemployment
number. You know, a stinky
one...
Now we have a new
technology company that's
levered to two of our big
man kind saving new tech
themes that don't need
employment to soar, don't
need oil to go down, and
those are reducing energy
consumption and solving
the global famine... the
one I believe we sort of
had a hand in creating
with our stupendously
moronic ethanol mandate
that trades 30% of our
corn which we actually eat
for 3% of our gasoline
which nobody wants.
It's a kinder, gentler IR
and one with better
earnings power. For
over a year now, IR has
been making this
transformation...selling
off capitol intensive
cyclical divisions, like
its road development
business and
Bobcat...packages
construction equipment
business that sold for
what seems now like an
unbelievably great price.
These guys are smart
guys... But the
TRANE acquisition was
meant to be the grand
finale of IR's fantastic
transformation...yes the
great transformation...
IR should no longer be
dependent on a strong
domestic economy to do
well. It's not the
kind of stock I think you
should be selling in fear
of a bad unemployment
number, or a ten dollar
spike in oil... It's
become a much more secular
growth new tech play that
needs oil to go higher to
make the most money.
Believe me, the IR of
today would be almost
unrecognizable to the IR
of a year and a half
ago...especially, by the
way, to Ingersoll and Rand
who are doubtlessly
rolling over in their
graves.
This year, 67% of IR sales
will come from climate
control technologies, and
most of that is TRANE...
Trane should account for
about 46%... just under
half of all of IR's full
year revenues. When you
hear climate control I
need you to think use less
energy...nice thought with
oil at $137 going to
Cramer price target
$150... I have
to brand these things
because, other than
bloggingstocks.com, and
other people who
completely rip me off
every day, no one else
gives me credit...
Then, industrial
technologies should be a
mere 18% of IR's sales,
and security technologies
business is the last
15%... So, IR is now
a climate control
company... with a couple
of sidelines in industrial
tech and security systems.
Why does this matter so
much?...
Because there are two
global mankind-saving,
"new tech" trends that IR
is now mostly devoted to
addressing...
Now the first one is
famine. Right now in
Asia they have a food
spoilage rate of about 40%
compared 3% in North
America and double that in
Europe... 6%.
40% of their food in Asia
goes bad, and is inedible.
That's a huge contributing
cause to the global
famine... and I'm not
talking about the food
that is inedible by
nature, like the stuff I
ate in Paris recently
which has too much cream
or is too fattening...like
the eight pounds I gained
in France. Don't
worry, I took it off on
the Harry S. Truman, the
aircraft carrier/diet
machine which has
thousands of Stairmasters.
The solution to the food
spoilage problem is the
cold chain project, the
cold chain project. I want
you to think of it like
the Silk Road inverse.
Companies are building
more and better
refrigeration technology
across Asia and in other
emerging economies to keep
food cool and reduce that
huge spoilage, which is
even worse than what we do
with ethanol. Trane
is a big part of that,
making devices that
monitor and control the
temperature of perishable
goods while they're being
stored and transported.
I want you to think of
Trane as the Marco Polo of
the cold chain...and now
it belongs to IR.
The second "new tech"
theme that IR now really
can sink its teeth into is
the need to replace the
installed base of aging
and inefficient commercial
heating, ventilation and
air conditioning systems
with modern ones that use
much less energy.
This is one of the most
efficient, cost-effective
ways for those of us in
the first world to cut
down our carbon emissions.
The combination of Trane
with IR's existing climate
control business means IR
has a lot of exposure to a
trend that not a lot of
people have recognized
yet, but which I believe
will be enormous as more
and more companies seek to
lower their carbon
emissions and energy
consumption.
And you know, under either
Obama or McCain there's
bound to be a cap and
trade system... this is
your play on that... it's
going to create even more
of an incentive for
companies to replace their
old HVAC systems with new
ones.
IR was a spewing garomy of
carbon...this one is a
carbon-saving company...
Get this... If 80% of all
commercial HVAC units in
the U.S. are due to be
replaced between 2010 and
2020, then HVAC sales
would be three to four
times larger...
I'm giving you all this
because on a down day you
need grounding...
You can't just say, wait a
second, Cramer said to buy
IR, and then it opens down
a dollar and then you sell
IR?... No. This is, what
I'm giving you now, is a
huge untold story tripled
to quadrupled the demand
of a product... I don't
have a lot of stories like
that...
And now that IR owns
Trane, its two thirds
climate control its poised
to benefit from this
coming HVAC replacement
cycle. And then, of
course, it's just the
plain old ordinary
benefits you get from any
good acquisition...
Now, there are low-ball
estimates... IR is
supposed to save $125
million this year, $300
million by 2010... I
think that's icing on the
cake. I also think
those estimates are low.
Don't worry... they won't
stick those fired
employees in thermo king
trucks and send them to
who knows where...
IR just doesn't have to
pull off that, but they
will save money from huge
head count reductions.
I know, at turn, this
sounds much less
threatening than layoffs
or mass firings.
. . . .
.
The Bottom Line!:
I think
Ingersoll-Rand (IR)
is a triple buy...
That's right...
On a down day, this
stock should have been
higher. It
didn't, because the
Trane deal just
closed. Buy,
buy, buy!...
It's a less-cyclical,
"new tech" player
that's fighting
famine, reducing
carbon emissions, and
helping us use less
energy.
Use the $137 (cost per
barrel) oil to buy oil
pumpers or oil
savers... like the
brand spanking new IR.
. . . .
.
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