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Jul.21
7:37 PM ET
Tuesday, 21 Jul 2009
Mad Mail: Will Verizon Break Through $30?

Jim: I'm totally confused and could really use your help! Harley-Davidson [HOG  Loading...      ()   ] 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.”

          ___

Dear Jim: Why is Frontline [FRO  Loading...      ()   ] 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 [NAT  Loading...      ()   ]? 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.”

          ___

Jim: I know that Verizon [VZ  Loading...      ()   ] 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.”

Call Cramer: 1-800-743-CNBC

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Current DateTime: 02:29:06 22 Nov 2009
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