Mad Mail: Will Verizon Break Through $30?

Jim: I'm totally confused and could really use your help! Harley-Davidson announced yesterday that their last quarter's earnings had plunged 93%, shipments of new motorcycles to their dealers had plunged, anticipated rest-of-year shipments have been revised down, and that they'll be accelerating their plant closings and starting a new round of massive layoffs! As a result, the stock's daily volume more than tripled, but the price, instead of plunging as I expected it to, surged over 8%! I don't get it! Can you explain why? How you read this? --William

Cramer says: “This is what happens at the bottom…at the bottom, strange things happen. Harley-Davidson has come down a huge amount. This is the beginning of what I think is the end of the underperformance. People want to get in ahead of that. Don’t forget – Warren Buffett bought a big stake in the company, and that’s driving a lot of buyers, too.”

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Dear Jim: Why is Frontline underperforming the sector? I've got all the shares I want, and with the exception of the small rally this week, it continues to go down while others in the sector either go up or are losing less. Should I switch from FRO to another, like Nordic American Tanker? I've been watching the show since it debuted. Thanks for helping us to make Mad Money! It's obvious that you enjoy it, which makes us very lucky. --Susan

Cramer says: “Yes, you should swap to Nordic American Tanker. Remember, that has been by far the best performer of any of the stocks in the group, and I think it will remain so. If the price of tankers goes down, they will buy more. If it goes up, they will make you a great deal of money. Remember, they have no debt.”

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Jim: I know that Verizon is one of your favorite plays. It has become one of mine since I started listening to you several months ago. While I agree with you that it is a safe play with a stable dividend, will it ever leave the confines of the $29 to $30 per share range? --Dennis

Cramer says: “[CEO] Ivan Seidenberg and I have talked about this. Here’s the problem: As long as people feel there’s going to be a big cyclical recovery, it’s going to leave Verizon in the dust. People just don’t care enough about a consistent gainer here. I say that there is room in a portfolio for a 6% yielder that’s going to be able to raise its dividend, with excellent managers. And don’t forget, the Alltel [acquisition] is going to be integrated correctly. I think Verizon’s a buy. I want you to stick with it. I want you to buy more if it goes below $29.”

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