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Jim Cramer's Portfolios of the Week - 10463 views
By Roberto Pedone
Posted on Feb. 5, 2010
According to Jim Cramer, dividend-paying stocks are getting cheaper. In a recent RealMoney.com blog post, he mentioned that nobody cares that Bemis (BMS), just raised its dividend, or that Kimberly Clark (KMB) is back to yielding 4% and Altria (MO) is back to 7%.
Cramer explained that on downs days like Thursday, market players don’t want to think about dividends. Instead, they focus on capital perseveration as the market trades lower. Cramer believes this can be a foolish strategy because the market is always one step from falling apart. He pointed out that if you buy a stock on its way to becoming an accidental high-yielder, one day that investment will turn out to be a good one.
Cramer feels the same way about companies that have recently reported strong earnings. Many of those stocks ran up too much too fast and didn’t give investors a chance to get in. One example he cited is Schlumberger (SLB), which ran after reporting a great quarter, because the company said the out years looked great.
Cramer told investors that yields are getting bigger, and some companies are doing much better, but their stocks are well below where they were when they reported strong numbers and bullish guidance. He said if investors buy some of these names now, the worst that can happen is you have to buy some more down a few percent.
Recently, Cramer found opportunity in stocks in bull markets now, stocks being taken down by macro-driven hedge fund managers and tech stocks hit by big mutual fund selling. Here are some Cramer highlights from over the past week as aggregated from his "Mad Money" TV show, the "Stop Trading!" segment on CNBC and his RealMoney blog posts (these blog post require a RealMoney subscription).
Cramer’s 8 Bull Markets Happening Right Now: Cramer has noticed that the following sectors left for dead are rising from the grave: media, cable, commercial real estate, housing, the regional banks, the drug stocks, autos and biotech. On Wednesday’s “Mad Money” episode, he said some stocks are working despite all predictions to the contrary. The Cramer’s 8 Bull Markets Happening Right Now portfolio includes Ford Motor (F) and The New York Times (NYT).
Marco-Minded Hedge-Fund-Created Opportunity: Cramer thinks marco hedge-fund managers are creating some buying opportunities. In a Feb. 4 blog post, he wrote: “The people who are outrageously negative -- and who can blame them with this waterfall day washing over us? -- don't want to hear this, but there are many stocks of many companies that just reported that are being destroyed because the hedge funds are plowing out of emerging markets and gold.” The Marco-Minded Hedge-Fund-Created Opportunity portfolio includes Inergy (NRGY) and Enterpriser Product (EPD).
Making Sense out Of Total Confusion: Cramer is doing his best to help investors understand this confusing market. In a Feb. 4 blot post, he wrote: “Here's my quick take on the market's inconsistency. The dollar is, perhaps mistakenly, the least-bad currency. The reason being the euro has always been an inefficient construct that didn't take into account the individual balances of individual countries.” The Making Sense out Of Total Confusion portfolio includes Goldman Sachs Group (GS) and SPDR Gold Shares (GLD).
Cramer’s Charts Remain in Charge Stocks: Cramer believes that investors need to respect the charts and money in flow into a number of stocks. In a Jan. 29 blog post, he wrote: “It is not the fundamentals. When this smoke clears, what we will see is that the charts were right in their prediction that the big money simply didn't care. At one point they will be done.” The Cramer’s Charts Remain in Charge Stocks portfolio includes Apple (AAPL) and Qualcomm (QCOM).
Cramer’s Tech Stocks Lagging the Market: Cramer thinks one or more big mutual funds have decided to sell the tech sector. On last Friday’s “Stop Trading” segment, he told viewers that you have to let these institutions do what they have to do. Once valuations get lower, it could be a good entry point. The Cramer’s Tech Stocks Lagging the Market portfolio includes Microsoft (MSFT) and SanDisk (SDNK).
Cramer’s Conundrums vs.
Conventional Wisdom Stocks: Recently, Cramer examined the market conundrums vs. conventional wisdom to see if anything makes sense. In a Feb. 1 blog post, he wrote: “Your only conclusion has to be that China can bring down materials and tech, even though the materials stocks are so directly related and the techs only obliquely involved.” The Cramer’s Conundrums vs. Conventional Wisdom Stocks portfolio includes Monsanto (MON) and Wells Fargo (WFC).
(Editor's note: At the time of publication and/or original publication of his posts and shows, Cramer owned Altria, Goldman Sachs, Apple, Qualcomm for his Action Alerts PLUS charitable trust.)