Back when Cramer worked on Wall Street, he used to have potential employees meet him on the street corner at 4:45 A.M. and pitch him 5 stocks. If your stocks were up at the end of the week, you were hired. Sounds easy enough, right? Well, plenty tried and only one succeeded. So in the spirit of nostalgia, Cramer's having some of UT's best student money managers pitch and defend their own personal stock picks to him. These business students are involved in the McCombs MBA Investment Fund, a student-run account that's worth about $16 million. The fund impressed Cramer so much that he wanted to take on its student managers head-to-head (or longhorn-to-longhorn).
The first pitch is Schlumberger . Jed's all in on this oil services giant. He says it's got some great macroeconomic trends, impressive capital expenditures from big oil producers, and with oil still high, SLB can't lose. Cramer agrees. The company is taking share and its definitely best of breed, but it isn't cheap. Sometimes for a great company, though, you have a pay a premium, Cramer says.
Amrita is pitching Broadcom to Cramer. The company is showing double-digit growth, a diverse portfolio, improved inventory management and improved gross margins. Cramer asks about the possibility of options backdating or if there's any concern about the company's high multiple. Amrita isn't concerned. She says Broadcom cleaned up their balance sheet and she's standing by it – even with the knowledge that Cramer is seasonally weary of most tech stocks. But he does agree with the fundamental analysis of Broadcom, and he'll keep his eye on it until August when he lifts his tech moratorium.
Stacey has decided to pitch a stock that has long been loathed in Cramerica: Wal-Mart . "Are you not concerned with the look-and-feel" when you walk into a Wal-Mart, Cramer asks? Stacey says the company's store remodeling is working (he just visited a newly-renovated store in Plano, TX, and says it would blow any Costco or Target out of the water). He thinks management is finally getting refocused and, if investors are patient, they will be pleased in 12-18 months. By then, Stacey believes WMT will be back on top, and he's sticking to it.
The McCombs MBA Investment Fund owns Schlumberger, Broadcom and Wal-Mart.
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