Trading the Lowe's Quarter
Lowe’sbetter-than-expected earnings helped push the market higher on Monday, with the Dow up 218 points and the S&P 500 up 25 points just before the close. Cramer offered two picks as plays off the quarter.
Management at Lowe’s , the home-improvement retailer, said gardening and painting were strong, so Cramer recommended Scotts Miracle-Gro and Sherwin-Williams for investors looking to trade that strength. While the Mad Money host also wanted to endorse Masco, the company is overexposed to indoor cabinetry, a business that Lowe’s said was not performing well right now.
Lowe’s isn’t the only reason for the market's rise, though, Cramer said. He pointed to Goldman Sachs’ upgrade of Bank of America. This company is “tremendously resilient,” having suffered enormously during the credit crisis, but still the stock has jumped almost 10% on Monday. When BAC is up, Cramer said, usually the market is as well.
Natural gas stocks are “exploding” on Monday, despite the fact that the season for buying this group is ending. One of Cramer’s favorites, Anadarko Petroleum, has dipped below its recent secondary offering price of $45 and change, but seemed to be regaining its losses during today’s rally. If the stock can once again break through that offering price, Cramer said, he thinks APC could add another $3 or $4 in upside on top of that.
Lastly, Cramer likes Bucyrus International as a play on India’s recent elections. The previous government’s slow-moving bureaucracy had dampened BUCY’s coal-mining machinery business in that country, so there’s a good chance that new leadership could get things moving again.
“If that [bureaucracy] comes to an end,” Cramer said, “then this would be the stock to buy.”
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