Mad Mail: Is Avon Right for This Market?
Mr. Cramer: I am a 23-year-old member of the world's greatest Air Force. I grew up playing my fair share of video games and I would like to know what you think about Activision Blizzard. ATVI is responsible for publishing some of the best-selling video game titles in history, and they are releasing several highly anticipated titles over the next year. Will these product releases translate into large profits in the next quarter or has the consumer disappeared from retail markets? --Senior Airman Robert J. Hanley
Cramer says: “This stock has come down enough to make it intriguing to me…but here’s the problem: I think it’s going to be a terrible Christmas…because unemployment’s going the wrong way. So please don’t stick around. Please don’t.”
Hi Jim: I think Avon is getting unfairly sold off. I think it is a mistake to think that women will stop buying Avon because of the economic downturn. Think about it, you need MORE makeup, not less, in bad times! And…Avon is a brand people can still afford. I believe Avon will do well in recession for the same reason a retailer such as Wal-Mart will. Folks may not be willing to buy super high-end cosmetics, but they still need makeup, and Avon is an affordable brand that delivers high quality. --Tom
Cramer says: “Tom, I agree with you. The stock is down way too low. I totally believe it’s a buy…when unemployment goes up, people take second jobs. They take Avon jobs. And when Avon has more representatives, it does well. Remember, big international company – some worry that the dollar’s strong so the translation will be not great. But you have horse sense.”
Dear Jim: I'm crazy about Mad Money and will be dressing up as you for Halloween (after all, which market commentator other than yourself would anybody even recognize?). I've already bought the Mad Money coffee mug, downloaded the soundboard from the CNBC website, and grown a goatee. I was wondering what you think about some of the big employers in my area such as Lexmark, Toyota and Affiliated Computer Services, since people are likely to be asking me about them at Halloween parties. --Matt
Cramer says: “Lexmark, not doing well at all. Losing a lot of share. Toyota…autos are becoming more like airlines, in that I can’t recommend them. But I would recommend Honda over Toyota because…the yen’s made it so all Japanese cars are too expensive. But I think that Honda has more energy-efficient cars than Toyota. But I don’t want to own any of these. Affiliated, no…it was going to do a deal. The deal didn’t work out. I say stay away.”
Cramer: I recently bought Lender Processing Services, agreeing with you that users of their services would grow with the need for lender processing after the bailout or economic rescue package was passed. Since your recommendation it has dropped 30%. Why? --Gary
Cramer says: “It’s a stock. And all stocks are going down. That said, this one, I think, does great in a recession. We’re just now going into recession. I say stick with it. I say buy more.”
Jim's charitable trust owns Wal-Mart.
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