Cramer’s Top 5 China Stock Picks (CEO, CHL, SSW, FMCN, BIDU, GMR)

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Stock Tickers Mentioned: CEO, CHL, SSW, FMCN, BIDU, GMR

On tonight’s MAD MONEY on CNBC, Cramer dedicated the night to China.  He’s not gung ho on Chinese stocks, but he’s willing to review some of them.  As a reminder, Cramer said he doesn’t like investing in China, he doesn’t trust China, and he thinks it is overvalued.  He thinks an imminent 8% to 10% pullback any time because it’s overheated.  After you get that pullback then you can buy the stocks, but he advises not to do so now.

As a reminder Cramer said he wouldn’t cross the river with his charitable trust to incvest there even if they pullback 20% in the market.  But Cramer does have some picks; he has 3 solid steady plays and has 2 speculative stock picks.

THE SOLID & STEADY PLAYS:

CNOOC (CEO)…China’s nationalized oil play, the number 1 offshore, a large player in Indonesia; 67% government owned. Under the production sharing, they get the mandatory rights.  As long as oil stays high this one is a winner he thinks.  ADR’s have a $45 Billion market cap; 3% dividend yield.

China Mobile (CHL)….winner in Chinese wireless market, 68% of the mobile users in China, government owns the majority.  It has been on hold because China Telecom rumors are that they might enter wireless; has 1.9% dividend; $191 Billion market cap.

Seaspan (SSW)…Shipping Vessel operator for overseas freight shipments; 6% dividend; $1.45 Billion market cap.  He likes this better than General Maritime (GMR) now. 

THE SPECULATIVE PLAYS:

Focus Media (FMCN) runs display ads all over China and now going online, which is his first pick. It advertises in cities over 1 million people.

Baidu.com (BIDU) is called the "Google of China" by many, but it is actually beating Google at its own game in China.

As a last reminder, Cramer said this is because YOU the audience keeps asking for China picks and he isn’t a big fan.  He thinks a big pullback is imminent and he wouldn’t buy until after.  He wouldn’t buy these speculative names at all right now, and would only buy these on serious pullbacks.  Consider yourself warned and informed.

Jon C. Ogg
June 13, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.