Stop Trading!: Buy Joy Global
Cramer reiterated his bullish call on Joy Global during Wednesday’s Stop Trading, calling the company “a great Obama play.”
President-Elect Barack Obama’s expected infrastructure-based stimulus plan should drive business for Joy Global , Cramer said, as should the recent trend in reflation. Minerals and the Baltic Freight Index have been making positive moves, which should bode well for this mining-equipment and infrastructure name.
“There are a lot of reasons to think that Joy Global is going to do OK – not great,” Cramer said, “but not nearly as badly as the bears think.”
Joy Global was up about 14% Wednesday after reporting a 70% increase in fourth-quarter profit.
Joy Global CEO and President Michael Sutherlin during his “Street Signs” interview mentioned the trouble inherent in coordinating actions between the government and the private sector. He said that while businesses are better at allocating capital than Washington, it’s Washington that has the money needed to stimulate the economy. The difficulty is getting these two bodies to work together productively.
Cramer agreed, but pointed out he has more faith in the Obama administration’s ability to connect government and business than he does President George W. Bush’s team. Cramer also said that he’d like to see some private-sector solutions to the financial crisis we’re in. Let business-healthy insurers buy their struggling peers, he said, and create a trading desk that encourages the buying and selling of collateralized debt obligations, which have wreaked such havoc in the market.
“We need to see the private sector throughout,” Cramer said, but in the end “we have to take what we can get – it’s better than nothing.”
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