Cramer: A Trade on New-Home Sales
Buy Centex, Cramer said during Monday’s Stop Trading!. He likes the stock ahead of the company’s Aug. 18 merger with Pulte Homes .
While the market cheered the June new-home-sales number, Cramer took note of one region in particular, the Midwest, which jumped 40%. The move was “incredible,” he said, and the heartland is Centex’s breadbox.
“These numbers show that that region is back,” Cramer said.
In finance, the Mad Money host called Capital One Financial’s stock is a “battleground.” COF saw a “gigantic rebound last week,” a sign that some investors think the worst is over. But at the same time there is a “huge” buyer of September 29 puts. The credit-card company has shot back to about $30 from $20, and it appears that some people are betting against a continued move higher. Cramer predicted a pullback before COF makes its next leg up in share price.
Cramer praised Agilent Technologies for buying Varian. He likened it to similar deals by Bristol-Myers Squibb , Johnson & Johnson and even First Niagara , whose stocks increased in value post-acquisition. More M&A is likely, he said, when other companies see this kind of positive response from the market.
Lastly, Cramer called Eaton “overbought.” While ETN one of his favorite stocks, it’s too expensive right now.
“Let’s wait for a pullback,” he said.
Watch the video to find out why Cramer said that buying this latest US Treasurys auction is a “sucker’s bet.”
Cramer's charitable trust owns Bristol-Myers Squibb.
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