Mad Money

A New Reason to Love RIO

Cramer's Southern Exposure

Don’t ever say Cramer doesn’t reiterate his stock calls. Despite criticism from some in the press, the Mad Money host constantly revisits his picks, especially when they’re going to make his viewers money.

Homegamers know Cramer touts his best plays ad nauseam. So try not to roll your eyes when we mention this one again: Vale , or RIO. The stock’s still a buy for all the same reasons: a booming Brazilian economy and huge demand for the minerals the company mines. But a new development has added to the stock’s appeal.

Vale’s attempts to buy Xstrata seems to have soured. It’s no reason for management to cheer, but it might be for investors. Usually traders use arbitrage – shorting the buyer while purchasing stock in the company being bought – to make the most money off a deal. But without that pressure, RIO is free to continue its trend up. Missing out on Xstrata, Goldman Sachs said, could push the stock as high as $57. RIO closed Thursday just above $34.

Watch the videofor more on why Cramer’s so hot on Vale and its native Brazil.

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