Bald is beautiful on Wall Street, Cramer said.
But he's not talking about Sy Sperling bald. The Mad Money host was referring to company earnings that look good superficially, but can't be sustained. In genuine Wall Street gibberish, a quarter like that is said to "have hair on it."
Exxon Mobile's [XOM
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] last report is a perfect example. The oil giant announced a $2.16 a share profit, 21 cents above the $1.95 estimate, and then the stock dropped. Why? A closer look showed that one-time gains boosted the company's numbers by over $1 billion. Take that away, and Exxon beat by only 5 cents -- and some of that EPS growth came from coporate finance and stock buybacks, which is not was investors want from an oil company.
But that's not the only reason Wall Street's coughing up fur balls. Exxon only grew production volume 1% year-over-year. Not to mention, Exxon spends more on buybacks than it does replacing its reserves, Cramer said, and for an oil company, reserves are "everything." Now he's thinking a February analyst meeting is going to show just how little Exxon put into finding new oil.
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So forget about Exxon and its hairy earnings. Go bald with Apache [APA
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] instead, Cramer said. APA has 9% to 12% production growth and great reserve replacement.
"I just see no reason to own the Exxons of the world."
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