Jim Cramer’s Sell Block – DuPont
Jim Cramer put chemical maker DuPont (DD) in his “Sell Block” Thursday after coming to the conclusion that the company is the worst in the chemical complex. He said the 6.4% dividend yield that DuPont pays out might look attractive, but in reality its not stable. The problem with DuPont, is that the company scores 59% of its profits from autos, transports, industrials and other economically sensitive sectors. The only division at DuPont that makes money is the agriculture unit. Another problem with DuPont is their pension costs, which could could amount to earnings losses of 45 cents and 58 cents next year. Cramer thinks the dividend could be at risk with 22% of the company’s profits tied to the auto sector. The company has also lowered its guidance for all of 2009. Cramer told viewers that if they want to play the chemical sector, he would rather own PPG (PPG) over Dow Chemical (DOW) or DuPont. Join the fastest growing community of small cap investors at Stockhideout.com
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