Challenging Cramer (Dec 7, 2006)
On Cramer’s video today he noted many sectors. Financials are up, presuming that employment will be weak tomorrow and that the gains today are borrowing against gains tomorrow. BA, IR, CAT are all impressive right now in cyclicals. His $5.00 picks: Denny’s (DENN) major turn; Rite-Aid (RAD) as told the merger will go through and the union problems will be resolved and RAD going to $6.00; noted LVLT again from last night about the CEO sticking his out calling for 25% growth. Chevron (CVX) big buyback that people don’t like, but that’s ridiculous according to Cramer.
MY OWN take versus CRAMER’S on two other stock issues he noted today:
Cramer noted he thinks KB Home (KBH) is for sale (while he was commenting on a sector downgrade today, which he thought was a worthless call). He and others have noted this one and other homebuilders. To me personally KBH is the most vulnerable of the entire homebuilder group to an acquisition whether they want one or not since the founder/CEO had to be allowed to be booted after he got caught with his hand in the options cookie jar.
Sysco (SYY) is also a good slow growth earner according to Cramer to own here and now. On a personal note, my own take is thta SYY is probably vulnerable right now as far as I can tell. The stock is going to have a tone of overhang at $38+ and again at $40 or less it has already run massively after breaking under $30 for the summer. It needs a breather and it is also is going to share some risk in all these trans fat foods as they are the #1 or #2 major food supplier in most metro areas around the US. At $36.70 and at a 52-week high this may need a breather before longs want to start piling in.
Jon C. Ogg
December 7, 2006