It’s Not Too Late to Ride the Bull
Web Editor, "Mad Money"
A rally started yesterday, with the Dow crossing 13,000, and Cramer says it’s not too late to ride the bull. The key, as with any Mad Money strategy, is doing your homework. You have to know what’s going on here. Luckily, Cramer took the time to break it down.
The Street seems to be excited most about companies like Amazon.com blowing away earnings estimates, but Cramer says it’s important to note that those estimates are incredibly low right now. The whole market is suffering from a severe depression due to the drop in housing and defaulted mortgages, and as a result analysts kept their projections low. Now, when a company reports strong numbers, the stock jumps on the “good news.”
Cramer says that companies like 3M and Amazon and Whirlpool used to deliver frustratingly inconsistent earnings are starting to even out. And with that steadying comes a revaluation, one that should send the market higher.
But you won’t make a dollar if you don’t know what’s working. Cramer recommends health stocks like Medco and CVS – even Allergan, which reports next week. Oil drillers like Transocean and Halliburton are worth a look. As long as you’re not in North American land drillers, Cramer says you should be all right.
Capital Goods still have room to move as well. Check out Emerson Electric, Caterpillar, Cummins and United Technologies. Then household names like Coke, Pepsi and Clorox should see a gain. Cramer specials like his Green Day stocks, “Benefit of the Doubt” retailers, rails and private equity targets will run, too, he says. So should Celgene and Genzyme in biotech, Boeing in aerospace and Goldman Sachs in international brokers.
Bottom Line: Household products, oil drillers, healthcare, materials, telecom, international brokers, agriculture, aerospace, biotech – these are the sectors Cramer thinks will rally the hardest. He suggests you buy.
Jim's charitable trust owns Transocean, Halliburton, Caterpillar, Goldman Sachs and Union Pacific.
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