Cramer Sticks With Tech

Cramer calls it “Tech Alive” and you can watch his clip at their site.

Cramer noted something interesting today, and it is dead right.  At least I think so.  He said something to the tune of “Altera lowered and the stock is up, what does that indicate…..”  I was personally very surprised today when I was going back over updates and saw that ALTR shares were UP after the company widened out its prior 2-5% sequential revenue drop to a new range of a 5-7% drop.

This also makes me look at the Goldman Sachs downgrade of Novellus (NVLS) this morning.  NVLS is down 4% on the day becase Goldman took its already-weak rating of a Neutral and took it even lower crummy SELL rating.  I am not saying his call is crummy, but companies sure think it is crummy when they come to work to see that Goldman Sachs issued a SELL rating on them.  Analysts also hate issuing a SELL rating because they are pointing out a real negative as the entire focus.  This downgrade was actually after the stock was at a 52-week high, so it isn’t as though the world is coming to and end there.  The downgrade is attributed due to weakening fundamentals and extended valuation, as well as early-stage weakness in NAND and a thought that M&A speculation surrounding it is not credible.  My opinion is that there isn’t anything new here and if there is still another 5% to 15% room left in upside for select chip leaders, then you probably only have tertiary weakness and other “valuation downgrades” from other brokers.  NVLS already made its mid-quarter comments, so using the same ALTR theory may be the way here.

OK, well I deviated from Cramer so let me get back to him and his cerebral matter.  Cramer said Oracle (ORCL) shouldn’t be down as much as it is and there is very limited downside risk in tech stocks.  He notes you could see investors buying these just because of a perceived “limited downside” even if they don’t think the names are going to instantly rise.

Cramer keyed in on Housing by saying the housing rally is finally spreading to Ingersoll Rand (IR) and Cat (CAT) etc as they haven’t been able to advance, but they are now because builders are seeing 6% mortgage rates again and they can return to stronger regional areas like Texas for new contruction.

Lastly, Cramer thinks all of the brokerage firm stocks (He didn’t name them but brokers like GS, MER, BSC, MS, etc.) estimates from the analysts that cover other brokerage stocks on Wall Street are just too low and you gotta buy the stocks before they go in and start raising estimates across the board.

Jon C. Ogg
December 6, 2006