Washington Mutual’s newly raised $7 billion capitaldidn’t impress Wall Street. The stock’s down about 10% Tuesday despite the news. Even still, Cramer said during Stop Trading!, WM should be “dramatically lower.”
“This stock is radically mispriced,” he said. Washington Mutual “should be between $9 and $10 – max.”
Buyers propping up WaMu – Novice investors following institutional money? Investors who believe the stock’s bottomed? – might be ignoring the poor terms under which the TPG deal was struck and the delusion of the stock, Cramer said. (Watch David Faber’s report for the full story.)
The only reason to own Washington Mutual – a possible premium offer from Wells Fargo – won’t happen now, Cramer said, so the stock’s off his buy list.
WaMu is just one of Wall Street’s valuation mistakes, the Mad Money host said, adding that he’s seen a lot of bad stock pricing lately. This market’s seen overcorrections in both directions, and right now we’re in a “no man's land where we go lower.”
Cramer reiterated bullish calls on his favorite fertilizer stocks: Mosaic, Agrium, Chemical & Mining Co. of Chile and Potash.
Lastly, Cramer dubbed Apple his “absolute favorite tech stock,” but said AAPL needs “new iterations of the iPhone to get this thing moving.”
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