Tonight on CNBC’s Mad Money, Jim Cramer said the S&P finally hit a new high after 7 years but he’s still saying the DJIA will still run another 1,000 points to 14,548. Real Estate is no longer competing and international markets have been winning. Cramer is reviewing all 30 DJIA picks as far as how they are going, where the multiples should be and where the stocks will go. They are all buying back stock galore and are all running great internationally. Cramer thinks these are cheap and even some of these could be acquired. This is also his ideal environment for DJIA components; here are his first six DJIA component reviews:
Alcoa (AA) is on its way to $42 if it is its own takeover, but the Alcan (AL) tie-up may make it an oligopoly and this could go to $45 on its earnings alone with the earnings momentum.
Altria (MO) is only up 10% this year with more than a 4% yield that will still split up international from domestic. MO can go to $86 on its own.
American Express (AXP) keeps delivering and it’s only 5% this year so far that is lagging MA and can go to $72.00 its own.
AIG (AIG) is still trailing too far behind and has a great business in China. It grows faster than MetLife (MET) but has a lower mutiple. He thinks at the MET multiple it could go to $81.00 instead of today’s $71.00.
AT&T (T) is one he underestimated and it can go to $45.00.
Boeing (BA) is one of the aerospace bull-market themes that can keep winning against Airbus, he thinks this can go beyond $100.00 to $105.00.
Sometimes, you can love him and sometimes you can hate him. He was right for his target in 2006, so we’ll have to see if all of these add-up right. Picking an index is one thing, but calling for 30 unique price targets at a given date for a 7+ month horizon is a bit over the top. The index call may end up being right, but you can be assured that on 30 names there will be some good hits and bad misses.
Jon C. Ogg
May 21, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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