Before he got down to the usual business of trying to make money for Home Gamers, Cramer wanted to note what he sees as an incredibly bullish situation in the market right now. “Supply begets demand!” he says. What he means is that if there are any sizable offerings for almost any big-cap stock, they will be taken. And that’s the strategy he’s suggesting: Find out where the supply is, take it and bid it. He likens the situation to the “lifetime moves” he used to see when he was running his hedge fund; days that made 400 points on the upside seem possible. Cramer thinks we could see those days soon enough.
Cramer admits it is rare that one person can have such a profound effect on a behemoth of a company that it directly improves the bottom line. But that’s what happened at Coke and Pepsi .
Take Neville Isdell at Coke, for instance. Three years ago, he was handed an overvalued company with very little growth. Now KO has the brands he demanded, the marketing he wanted, and much-needed growth in international sales. Actually, much of the good news for Coke is coming from overseas in places like Europe, Japan and Latin America. Now the once-$38 stock is up to $51.
Cramer says that upward trend in foreign markets is one of the reasons Coke should go much higher. New products are helping, too. Coke Zero is a smash hit. Plus, the company seems to have a newfound desire to buy other businesses. Case in point, its $3 billion bid for vitamin-water maker Glaceau. Cramer thinks a continued move away from carbonated beverages should have a positive impact on the stock. So if you missed the latest pop, you might still have a chance to enjoy another one.
Then there’s Pepsi. New CEO Indra Nooyi has taken the company’s swing division, Frito-Lay, and pumped new life into it. She took what was once seen as an unhealthy food business and launched a healthier line of snacks to rebrand its image. Cramer credits this move for Pepsi’s accelerating growth of 5% to 7%.
Like Coke, Pepsi’s a ROWer – Cramer parlance for having exposure to the “Rest of the World.” He says it has international growth in the mid-teens, and he thinks it should go higher. Even better, the company has proved itself a forward-thinker. It aired the top five commercials for young people during the Super Bowl, which it took from a YouTube contest.
Two companies brought back to full vitality by two people. Cramer thinks that makes for two great buys.
Bottom Line: Cramer says Coke goes to $60, and Pepsi to $65. You might want to get on board.
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