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Jim Cramer's Portfolios of the Week - 6824 views
By Roberto Pedone
Posted on June 4, 2010
According to Jim Cramer, the market needs to meet six requirements before a meaningful rally can be sustainable. On Wednesday’s “Mad Money” TV show, he said that only when these items are checked off can the market rally and can we feel safe to buy tech, retail the industrials and the accidental high-yielders.
The six requirements that Cramer wants to see are as follows: fine print on financial regulations, Spanish bank stabilization, lower unemployment, a resolution on the oil spill, a soft landing in China and European stabilization.
In regards to European stabilization, Cramer said the market needs to have a stable euro. He explained that we need to see no more downgrades of country debt and no more talk of countries dropping the euro.
He mentioned that with the oil spill in the Gulf of Mexico, the market needs to see that the spill has been contained in order for the entire oil sector to begin recovering.
Cramer warned investors to temper their enthusiasm. He said Wednesday’s rally will just be another reason to sell if the six requirements aren’t met.
Recently, Cramer found opportunity in stocks for a new bull market, strange stocks showing strength and stocks the market missed over the Memorial Day weekend. 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 posts might require a RealMoney subscription).
Cramer’s 3 Picks for a New Bull Market: Cramer has identified a new bull market in the trucking sector. On Wednesday’s “Mad Money” TV show, he said Cummins (CMI) has $1 billion in cash and trades at just 10 times earnings with a 14% long term growth rate. The Cramer’s 3 Picks for a New Bull Market portfolio includes Paccar (PCAR) and Navistar (NAV).
Cramer’s Strange Stocks Showing Strength: Cramer has noticed some strange action in the markets with stocks such as Wal-Mart (WMT) and General Mills (GIS) going up along with IBM (IBM). In a May 25 blog post, he wrote: “Weird group of stocks that are higher: the defensives, some consumer plays and some techs.” The Cramer’s Strange Stocks Showing Strength portfolio includes Goldman Sachs Group (GS) and Kohl’s (KSS).
Cramer’s BP Impact Stocks: Cramer believes that stocks such as Nabors (NBR) are being wrongly sold off due to BP’s (BP) oil spill in the Gulf of Mexico. On Tuesday’s “Mad Money” TV show, he said that not all oil service companies are created equally, and the slide in the Oil Service HOLDRs ETF (OIH) could be a great opportunity for companies such as Schlumberger (SLB). The Cramer’s BP Impact Stocks portfolio includes Patterson-UTI Energy (PTEN) and Weatherford International (WFT).
Cramer’s Not-Cheap-Enough Stocks: Cramer thinks Doug Kass’s List of stocks he’s buying is cheap but not cheap enough. In a June 2 blog post, Cramer wrote: “Exxon Mobil (XOM)? We prefer ConocoPhillips (COP) for the nat gas which has bottomed and for the restructuring.” The Cramer’s Not-Cheap-Enough Stocks portfolio includes EMC (EMC) and Prudential Financial (PRU).
Cramer’s 3 Stocks the Market Missed: Cramer thinks traders may have missed three hot stocks due to the long Memorial Day weekend. On Tuesday’s “Stop Trading!” segment, he said: “NetApp (NTAP) had the best report of any tech company with the exception of Apple (AAPL).” The Cramer’s 3 Stocks the Market Missed portfolio includes Cirrus Logic (CRUS).
Cramer’s Counter-Programming Stocks: Cramer thinks a number of stocks work in terms of a counter-program to what’s going on in the markets. In a June 1 blog post, he wrote: “Speaking of smoking, how about going long Altria (MO) and going short Phillip Morris (PM)? The MO dividend covers the PM dividend and then some, and you have to bet that Europe will hit cigarettes with some humongous taxes that we might not put on them. PM's gotÂ currency weaknessÂ and MO, by nature, has NO EUROPE WHATSOEVER.” The Cramer’s Counter-Programming Stocks portfolio includes Deere (DE) and Annaly Capital (NLY).
(Editor's note: At the time of publication and/or original publication of his posts and shows, Cramer owned Cummins, Goldman Sachs, BP, Weatherford, ConocoPhillips, EMC, Prudential, Apple and Altria for his Action Alerts PLUS charitable trust.)