With the Dow down nearly 250 on Tuesday, Cramer during Stop Trading! offered up two places where investors might still put their money: the rails and master limited partnerships.
Cramer was reiterating his call from Monday that despite an overall negative view of the economy, the rails say otherwise. Demand for these companies is “strong,” he said, and the CEOs are pointing to business conditions that look “pretty good.”
“I think that the rails are all doing very well,” Cramer said, “and they’re very inexpensive.”
Norfolk Southern , “down horribly today,” Cramer said, now looks “cheap.” Just yesterday he recommended Union Pacific on the ramp-up in its business, as evidenced by an increase in the number of carloads, idle cars put back in use and workers returning from furlough.
Cramer also noted that Goldman Sachs said good things about Berkshire Hathaway , which he called “a giant rail.” Cramer thinks Berkshire is also cheap right now.
Among the master limited partnerships, which Cramer likes for their outsized dividend yields, he endorsed Kinder Morgan Energy Partners and MarkWest Energy. But investors must keep in mind that these stocks are up “artificially,” he said, because a new $1 billion mutual fund has been created that will buy only MLPs, thereby boosting their share prices.
“But the yields are so great versus the 10-year,” Cramer said, “you have to take a look at them.”
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