Web Editor, "Mad Money"
On Monday’s show, Cramer offered what he called a surefire recipe for profits: Find out where the Big Money’s heading, and get there first.
Luckily, there seems to be a strategy that all the institutional investors historically follow, giving Homegamers the jump on Wall Street they need: Money managers generally review the market two months into the quarter to see what worked, then they buy those sectors and stocks for the final month. All you have to do is figure out the winners before the industry fat cats do, and then enjoy the ride up.
Or just let Cramer do the work for you. His research showed that agriculture, gold and natural gas outperformed in January and February, so the smart money should be in these sectors in March.
These picks shouldn’t surprise regular Mad Money viewers. Cramer’s been trumpeting the strength of all three sectors for a while now. Especially ag. He replaced his faith in the Four Horsemen of Tech with the Fab Five of Agriculture: Agrium , Monsanto , Mosaic , Deere and Potash . Right now, Potash is his favorite.
Potash makes the fertilizer that farmers are buying in bulk as they look to reap profits from sky-high wheat, corn and soybean prices. Fertilizer prices are way up, too. But that isn’t deterring farmers from ordering more. They’re doing whatever they can to increase their crop yields while the market’s in their favor.
Cramer likes POT because it’s one of the lowest-cost producers of potash in the industry. The company’s also one of the few with the ability to increase capacity. And the barriers to entry in the business are so high – $2.5 billion just to build a mine, let alone the additional infrastructure costs – fear of new competition is negligible.
And, of course, the fundamentals are here. Blowout quarter, raised guidance, big buyback, low multiple. In fact, if Potash at $158 traded up to a multiple that was just half its 107% earnings growth rate, Cramer said, the stock would be worth $383.
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