Cramer on Monday revisited Cloud Peak Energy, whose IPO he recommended back in November. While the stock didn’t take off as he expected, an upgrade today from Credit Suisse warrants another look.
Cloud Peak opened at $14.50 on Nov. 20, 50 cents below it’s offering price. But that is because investors worried that the money being raised was going to parent company Rio Tinto . The sell-off, though, gives Mad Money viewers an opportunity to buy the stock at a discount.
And Cramer does still likes Cloud Peak. The company operates in the Powder River Basin, mining the region’s low-sulfur coal. The area allows for easy access to the Western coasts where it’s easy to ship to China. The cleaner coal is cheaper for the US utilities to burn because they do not have to purchase more expensive scrubbers.
Cramer agrees with the Credit Suisse report that the best time to buy a mining company is when inventories are high and prices are low. Cloud Peak is also cheap versus its competitors, trading at 28% discount to the average coal stock. Cramer thinks you should consider buying Cloud Peak after it reports earnings, as long as the results look good.
Dear Jim: Because of you, this 66-year-old grandmother is taking care of her own finances and doing very well. I do have a suggestion though. When you send the emails with the action you take for your portfolio, it would help if you give us a price limit to buy and sell. We are not always able to buy and sell at your price. Case in point: Fluor I am trying to buy it, but it looks like I am chasing it constantly. Is it too late to buy? The price has been skyrocketing right before I have a chance to put an order in. Thank you very much. –Domnica
Cramer says: “I think it’s a terrific stock. It’s one of my favorites… So, I think it’s OK to buy.”
Hey Jim: A Lone Star State, just graduated from the University of North Texas, booyah. My question is about Starbucks. I got in after a story you did a while back and it's up 35%. While I believe they still have some room to run past their recent 52-week high, I’m nervous to give up the gains. What are your thoughts? –Tom in Dallas
Cramer says: “Here’s the deal, you’re nervous to give up the gains, take half off. You’re nervousness is right. You have a big gain; don’t turn it into a loss.”
Jim: Happy Booyah New Year! I just read over “Cramer’s 9 New Dividend Plays” on MadMoney.CNBC.com and was happy to see I already own a few of your picks. Your influence on us Homegamers is immeasurable! On your dividend play list, you include Emerson Electric , with a yield of 3.1%, but I have recently inherited a position in another energy company, PPL Corp., with a 4.3% yield. Considering PPL's higher yield, do you recommend holding onto PPL or swapping some of my position for EMR? Thanks for all of your hard work in helping us get back to even and beyond! –Joe in Southampton, N.J.
Cramer says: “PPL is a very…slow moving stock. Emerson on the other hand is a terrific cyclical company that is having a rebound. I would prefer you be with Emerson. PPL doesn’t have the growth I would like.”
Cramer's charitable trust owns Emerson Electric and Fluor.
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