Cramer on Friday warned investors against buying National Beverage, saying the carbonated-drink business isn’t all that hot right now.
Last week, Tim in Washington asked about FIZZ and its recently announced $1.35 special dividend. While that amounts to an 11% yield at the stock’s present level, Cramer said, it’s too late for new buyers to collect it. National Beverage does generate a lot of cash and has a history of special dividends, but Cramer would rather see investors own Pepsico .
PEP offers a stable, regular 3% yield. Also, the company’s diversified business – Frito-Lay, Quaker Oats and substantial international opportunities – allows Pepsico to sidestep the trouble in carbonated beverages. Cramer also thinks Wall Street is underplaying the savings from its bottling acquisitions.
Bottom line: “Swap out of the Fizz,” Cramer said, “and swap into the real thing, PEP.”
Dear Jim: I know you say to only play takeovers if the fundamentals are good, and last Friday it was reported that BlackRock has an 11% stake in Take-Two Interactive Software . That goes along with Carl Icahn's recent 11% stake and Harbinger Capital's 7%. I know TTWO has performed miserably, but with those three owning 30% of the company, do you see an opportunity? –Eric in Indianapolis
Cramer says: “No…It’s just not a good company…There’ll have Grand Theft Auto come out later this year and maybe we’ll revisit it again then…”
Dear Jim: A 3-D booyah to ya. I just saw Avatar in 3-D, and I must say this movie is groundbreaking. I feel it will lure in more people to go see future 3-D movies. With an increase in 3-D movies coming out and ESPN and the Discover Channel announcing 3-D cable networks for 2011, I feel this growing trend deserves some more attention. I think it’s time for a 3-D Entertainment Index for 2010. I want to get in early before the revolution begins, if it hasn’t already. Thanks for making me a smarter investor. –Michael in Parsippany, N.J.
Cramer Says: “This is one of those, Michael, where the revolution will not be televised. You cannot make an index. There are no pure plays. I don’t want you in this. Some people might regard IMAX as a play. But you know what? I don’t like IMAX. It’s gone up way, way too much.”
Cramer’s Charitable Trust Owns Pepsico.
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