Mad Money

Cramer: 4 stocks the bears have all wrong

Four stocks in the market are the subject of intense skepticism. Jim Cramer doesn't think they should be.

They are Hain, Herbalife, Green Mountain Coffee and Alcoa. The "Mad Money' host believes there are serious bullish developments involving all four companies that he thinks should dissuade sellers.

Joerg Koch | AFP | Getty Images


Analysis published recently by a widely read business magazine called the valuation of Hain into question with the author suggesting that shares may not deserve the premium they currently command.

"If, for example, competition weighs upon hit products or Hain falls off its acquisition pace, the stock could lose its premium multiple and spill, by our estimate, roughly a third of its value," said the magazine.

Jim Cramer thinks the analysis is simply off the mark. He believes the advance in share price reflects the rapidly growing popularity of the healthy eating trend, a theme he believes will be investable for some time to come.

And Cramer believes his outlook was confirmed recently in a conversation he had with Costco CEO Craig Jellinke, who said organic and natural is here to stay.


Bears can't stop taking swipes at Herbalife after famed investor Bill Ackman revealed a short position and made a case against the stock. Essentially Ackman believes the sales model is something of a pyramid scheme and eventually the whole company will collapse as a result.

Cramer, however, isn't so sure. "Bill Stiritz, the brilliant CEO of Post Holdings, and former chairman of Ralcorp, has personally bought 6.3% of Herbalife, and he wants to get more involved to help the company bring out value," Cramer noted.

Although not as famed as Ackman, Cramer thinks Stiritz is every bit as shrewd. And if Stiritiz sees value Cramer can't help but wonder if other soon will see value, too

Green Mountain Coffee

Skeptics have talked down Green Mountain for quite some time arguing that the company faces serious challenges now that its patent on K-Cups has expired.

Although Cramer concedes any material change presents challenges, he sees many reasons to believe business is solid including the recent forecast in which the company said it expects stronger earnings in the second half of 2014.

"In this case, fundamentals seem to have turned dramatically for the better," cramer noted. "Also, Green Mountain just announced a billion dollar buyback, that's over 10% of the market cap, along with a decent dividend after it reported better than expected earnings."

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Last month Deutsche Bank downgraded Alcoa stock from hold to sell with a $5.50 price target citing a deteriorating outlook on the company's main aluminum business.

Cramer, however, thinks the downgrade misses an important point. Alcoa is moving away from being a pure aluminum play into a more profitable value added business.

It's a theme Cramer says Goldman Sachs also picked up on, when it upgraded Alcoa on November 25.

If anything Cramer believes Alcoa is a well run company that represents value. Don't forget Alcoa sells into "some very hot markets," such as the aerospace and automobile industries," he noted.

Call Cramer: 1-800-743-CNBC

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