Word on the Street

A lot of commercial debt is coming due and some will not be able to pay once it comes due.  Finerman talked about this and how the debt may not be able to be rolled over.  She told us to look into IYR (IYR) and Citigroup (C) to play the possible potential effects of the debt coming due.  For Adami the “low hanging fruit” is Acuity Brands (AYI) as it approaches a level where taking part of the short position seems to make sense.  If it rallies he said to look at shorting it again.  Seymour talked about JPMorgan (JPM) and Well Fargo (WFC) due to more exposure to delinquent loans and bad debt.

Finerman talked about how it was not as bad for Procter & Gamble (PG) as it could have been.  Higher end products seem to be the problem but they were hurt most from the valuation being too high.  Efficiencies and companies that still put op good numbers should be looked at according to Najarian.  He mentioned Amazon (AMZN) and Overstock (OSTK) as they have moved to become increasingly efficient surprising the market.

Seymour has started to look at gold and gold miners where the dollar export price of gold remains high.  He likes Gold Fields (GFI).  Adami chose to look at Newmont Mining (NEM) forthe price action.  Najarian on the other hand mentioned the (GDX) and (GDL) for what he called a “base across the gold miners, and well distributed.

Celgene (CELG) was highlighted by Adami as it is above the 52 week moving average and they have performed well over the past few weeks with a great debt free balance sheet.  Big Pharma that looks to be involved in stem cell research was talked about by Najarian in Merck (MRK) and Pfizer (PFE).

SolarFun (SLFN) is a stock Finerman is bearish on but not to short it.  Najarian feels looking at solar names that are above 50 day averages.  He cited First Solar (FSLR), Energy Conversion Devices (ENER) and SunTech Power (STPXL).  The opportunity in energy for Seymour is with ExxonMobil (XOM) and Najarian thinks buying puts on the stock will protect from any downside.

Question of Bonuses

Tom Gardner, the CEO and Co-Founder of Motley Fool joined the show to talk about how Wall Street executives should be compensated.  His statement to start the show was clear, “What we are looking at here are people making a lot of money while destroying their companies. The incentive plans were set up that way, they had people focusing incredibly on the short term, and it set the companies up for failure… we have to have claw backs, we have to have restitution.”  He feels that the current set up is for short term success and this allows for movement in accounting rules which gives the potential to destroy companies.  Finerman is in favor of claw backs and multi-year payouts so you can see how it works over time.  Gardner feels that the solution is with the shareholders .  To read more from Gardner we were told to read The Motley fool Million Dollar Portfolio.

Under Armour Like Kurt Warner

The Super Bowl was used by Under Armour (UA) to launch it’s new flagship product.  This year though they have decided to remove themselves from the advertising scene at the game.  Darren Rovell who is a Sports Business reporter talked to CEO of UA Kevin Plank.  They talked about the strategy moving forward.  Plank is looking at a long term strategy in a bad economy as they try not to focus on the market forces they cannot control.  Adami questioned whether Plank is the best person to run the company, and the CEO pointed to the success in the past year while pointing to the strengths in both management and execution.

Pops & Drops

Pops: Amazon.com(AMZN) +17%, iShares FTSE/XINHUA China 25 Index ETF (FXI) +3%, General Dyanamics (GD) +6% and Wells Fargo (WFC) +20%.

Drops: Caterpillar (CAT) -13%, Pfizer (PFE) -16% and SPDR Homebuilders ETF (XHB) -4%.

Bullish

Terra Nitrogen (TNH), Molson Coors (TAP) and Black & Decker (BDK).

Bearish

Nuance Communications (NUAN), Boston Beer Company (SAM), Potash (POT), Agrium (AGU), Mosaic (MOS), Hormel Foods (HRL), Dow Chemical (DOW) and Time Warner (TWX).

Overtime

Tenaris (TS) Cramer said “sell, sell, sell.”  Still going lower is Goodyear Tire & Rubber (GT).  Bullish on Apollo Group (APOL) because it is “one of the few growth stocks left.”

If January is any indication for 2009 there may be little hope for investors with the Dow losing 9% this month but Cramer doesn’t want anyone to give up.  Indicies show that a third of the S&P 500 stocks finished January higher along with a third of the S&P Mid-Cap 400.

Palm (PALM) added 150% to its share price, Shaw Group (SGR) added 36%, Google (GOOG) advanced double digits and Morgan Stanley (MS) is up 26%.  Also Walgreen (WAG), Wyeth (WYE), Symantec (SYMC), Sallie Mae (SLM), Peabody Energy (BTU), Nation Oilwell Varco (NOC) and Monsanto (MON) and along with many more returning profits to shareholders.

Cramer is not a fan of the current market though and wants us playing defensive high yielding, recession resistant stocks.  He named BP (BP), Tupperware Brands (TUP), Kraft Foods (KFT), UPS (UPS) Emerson (EMR) and Clorox (CLX).

We were told to focus on preserving capital until some stability is found in the markets and in the economy.  The talk of the good bank/bad bank plan that has been talked about much lately looks at a move toward nationalizing banks.  If the word “nationalized” is mentioned Cramer said look at Bank of America (BAC) or Citigroup (C).  A situation where good assets are being bought and sold to good banks the only ones in position to seize assets are good banks like JPMorgan (JPM) and Wells Fargo (WFC).

Cramer thinks this will work because history has shown us in the savings and loan crisis that it will.

Ken Conrad who is chairman of the Senate Budget Committee joined the show to talk with Cramer about the disappointment surrounding Obama’s stimulus plan.  Conrad feels there are a few good things but more need to be done to put people to work an fix housing.  He feels as much as $200 billion is needed to be invested especially for steel and metals industries.  When it comes to housing a $10,000 tax credit is needed offered for a limited time while allowing banks and homeowners to reset the terms of the underwater mortgages.  Last legislation that provides for investigators to dive into the collapse and prosecute was also called for.

Public support was gathered for President Obama by 12 CEOs of publicly traded companies.  On Wednesday the House passed the bill and all of these came out for support.  Cramer wondered if this came at a price to Obama?  If these that came out would benefit more?  If so are the stocks worth buying?  A special Lightning Round was put together based on Clint Eastwood’s film The Good, the bad and the ugly.

The Good:  Google (GOOG) – strong quarter with a cheap stock and a well performing company in this economy; IBM (IBM) – a buy after a strong quarter and good looking guidance for 2009; Honeywell (HON) one of the few industrials that is still doing well even though a rough 2009 is expected but Cramer remains bullish.

The Bad: Edison International (EIX) – Cramer may like utilities but only when they offer decent sized dividend yields which EIX does not you may want to go with Con Ed (ED) or Duke Energy (DUK), AT&T (T) or Verizon (VZ); Eastman Kodak (EK) – Cramer feels “a company in doubt” with layoffs, struggling hardware, a tenuous balance sheet and a dividend in doubt.

The Ugly: Motorola (MOT) – stock hurt more than any stock Cramer knows with Qualcomm (QCOM) and Research In Motion (RIMM) better picks; JetBlue (JBLU) – Cramer has never nor will he ever recommend an airline stock; Xerox (XRX) – “a complete and utter disaster” according to Cramer; Applied Materials (AMAT) – no demand for their products any longer and Cramer says they have been left behind as a company; Corning (GLW) – suffering from the lack of demand with no upcoming catalyst; Aetna (AET) – had their big run that is about to end.

The moves in the pharma market were the topic of Karen Finerman when she spoke with Dylan Ratigan today.  Roche (ROCM) is turning hostile abd cutting the bid for shares of Genentech (DNA) to $42 billion.  Attention should be paid to the story because in two weeks the tender offer will come and details of the deal will have to be disclosed.  She thinks we could see a better deal than we are hearing about now.

ETFs like XBI (XBI) or IBB (IBB) should be looked at if investing in pharmaceuticals.  This seems to be the beginning of the wave of consolidation.  A great place to hide is in Procter & Gamble (PG) but for most investors Finerman feels valuations have become too high.  Also Walmart (WMT) may have gotten a bit too expensive for her taste.

Jim told us that “the casinos are really breaking down here” on Stop Trading today.  He said of MGM (MGM) and Wynn Resorts (WYNN) “they are at critical levels” with Las Vegas Sands (LVS) trading at its offering price.

Bullish

Walmart (WMT), United Parcel (UPS), JPMorgan Chase (JPM) and Wells Fargo (WFC)

Bearish

CVRD (RIO), US Bancorp (USB) and Intuitive Surgical (ISRG).

Overtime

Cramer thinks that Berry Petroleum (BRY) may be a good speculation play with a dividend yield reaching 4%.  Travelers (TRV) was called a better play than Aegon (AEG) on insurance.  Last choose ITT (ITT) over Pentair (PNR).

Infrastructure is not going to be boosted by President Obama’s plan the way Wall Street expected.  Terex (TEX), Jacobs Engineering (JEC) and Caterpillar (CAT) should be boosted the most all all were down today giving Cramer the sense that the market was laughing at the new plan.  Technical analysis seems to agree with the market outlook.  When looking at the charts Jim agrees that TEX and JEC being in not so good shape, but he refuses to let go of CAT just yet, he called CAT a buy.

Chesapeake Energy (CHK) dropped to an intraday low of $9.84 from $74 in July.  Chairman and CEO Aubrey McClendon joined the show to explain some things to Cramer.  The push last year got lost among the bank failures, election, falling oil prices and the economy according to McClendon.  Hope is not lost with the Congress and President in favor of natural gas though.  Prices in natural gas are driven by the weather and economy, and now with rig counts continuing to drop the price should not drop much lower.  CHK is 80% hedged for 2009 at $7.50 a unit and expects assets to grow by a third in the next two years.