Is Cisco Out of the Doghouse?
Web Editor, "Mad Money"
For Monday’s “Mad Mail,” Ernie asked why Nordic American Tanker , which seems solid on all levels, was lagging its peers. Was this a broken stock or a broken company? Cramer said that while he likes the company, the industry itself is suffering from a glut of ships. That has forced down the prices Nordic American would typically charged for its services, thereby cutting into profits. Investors, therefore, should avoid the stock—at least for now.
“When we finally put away all these new ships and rates go up,” Cramer said, “maybe then.”
Mike wondered if recent analyst upgrades of Cisco Systems , and the pop in share price on Monday, would make Cramer change his mind about the stock. His answer?
“I’ve got, like, 499 stocks in the S&P 500 I’d rather own than Cisco,” Cramer said.
He said “Mad Money” viewers, and his charitable trust, lost money because Cramer had been so bullish on the stock. But Cisco disappointed one too many times, so he won’t get behind it now.
Vinay has been tracking Transocean since the BP spill last spring, and he noted how well the stock has performing. Did Cramer think RIG could sustain its speedy recovery? “Yes, it can,” he said. “It’s an excellent company.” Cramer said he likes a lot of the oil-service names right now.
Bob in Nevada questioned whether optionsXpress will be able to maintain its healthy balance sheet given the enormous $4.50-a-share special dividend plans to pay. Cramer said he had been telling Homegamers to buy the stock specifically for that dividend, that the company continues to outperform and that he remains bullish on OXPS.
“The naysayers were just unbelievably wrong,” Cramer said.
Rick asked why Motricity fell last week while the market was soaring. Cramer said he wasn’t sure, especially as the stock seems to be working its way back up.
“Sometimes just strange things happen to stocks,” Cramer said. “I wish I had an explanation—I don’t.”
And lastly, Anna in Alabama wanted to know how much exposure to the solar industry MEMC Electronics had. With so many people down on the sector, she was questioning her buy. But Cramer said WFR is cheap, and he’s predicting good things for the company in 2011. He recommended sticking with it.
MEMC “reminds me very much of NVIDIA at $10-$11, where everybody doubted me,” Cramer said, “and the stock is now at $14 and change.”
When this story published, Cramer's charitable trust owned Cisco Systems.
Call Cramer: 1-800-743-CNBC
Questions for Cramer? firstname.lastname@example.org
Questions, comments, suggestions for the Mad Money website? email@example.com