Students Pick, Cramer Decides
Cramer likes to find fresh ideas for Mad Money when he’s visiting college campuses across the U.S. So when he heard that Georgia Tech’s Student Foundation Investment Committee was clobbering the Dow and S&P, he knew where to look.
Mike from Ohio helps run the $807,000 fund, which is up 16% so far this year. As cell phones become a new appendage on people in Europe, America and Asia, Nokia has the most to gain, he said. Mike said he knows that Cramer had recommendedMotorola on the potential for Carl Icahn to break up the company, but Nokia is “the best company in a growing industry.” Before Nokia paid $8 billion to acquire Navteq earlier this month, the company had $8 billion in cash flows and only a billion in debt. It’s “a cash machine,” Mike said, and Cramer agreed: “I think that one’s a winner.”
Venkat from India wanted to talk up Grant Prideco GRP, but had to ask, “How could you be an oil-service company and possibly screw up in this environment?” Venkat said GRP is consolidating operations, and the company took a one-time charge for that. “Moving forward, I think they’re margins are going to get better,” Venkat said, adding that right now GRP is undervalued. Once the consolidation is done and the margins improve, Grant Prideco will get the catalyst it needs. Cramer said if that happens, GRP is a winner, but he still thinks Transocean , Halliburton , Schlumberger and National Oilwell Varco are better.
Andrew from Georgia had a pick so easy he only had a few moments with Cramer. Andrew likes J Crew on the strength of its CEO, Millard Drexler and new product lines like Crewcuts for kids. Cramer likes JCG too, saying it’s a “back the truck up stock. I think J Crew rocks.”
Cramer said he was not a fan of Fossil , but Danny from Georgia likes it. The GT student said the company carries zero long-term debt, has good return on investment and equity and is enjoying a weak dollar as half of its sales are in Europe. That nearly put Cramer to sleep because, after all, the stock is near its 52-week high, the company already pre-announced earnings to the upside and most retail is going down. Cramer said he is wary of retailers who have already run in this environment. But Fossil did blow out the quarter, and that might lead to a follow-up blowout.
Jim’s charitable trust owns Transocean.
The Georgia Tech Student Investment Fund Owns Nokia. Andrew Owns J. Crew Group.
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