CEO Interview: Jim Hagedorn, Scott's Miracle Grow (SMG)
Cramer felt Scott's Miracle Grow is a company that has gotten unfairly beaten up after a good quarter; because it didn't raise guidance, investors began a huge selloff which Cramer thinks was overdone, especially since so many Americans have caught the gardening bug. He invited CEO Jim Hagedorn to discuss why the stock price has dropped an additional 5 points since the initial decline two weeks ago.
Hagedorn thinks his company is still being punished for not having raised guidance in spite of strong sales and a 45% increase in shipments to retailers in May. Currency conversion problems account for only a 5% dip in earnings. While most brands are selling well, Hagedorn admits his high-end Smith & Hawken gardening supplies and furniture are not really suitable for the economic situation, and said he plans to make some changes. Cramer thinks Scott's Miracle Grow is headed higher.
Underdog Days: Bank of New York Mellon (BK), Ford (F), Anadarko Petroleum (APC), U.S. Bancorp (USB)
Tuesday's rapid decline followed by a successful finish for the Dow 50 points up proves that this is an underdog market, according to Cramer who says he is one of the few voices in the financial media that welcome intraday declines, which would otherwise signal volatility; "We love comebacks, we love underdogs, we love tenacity," he said.
The equity offerings of Bank of New York Mellon and Anadarko Petroleum are not bearish signs, but provide yet more opportunities for more investors to jump into the market. At first, prices for BK and USB's offerings fell, but it soon became apparent that was an opportunity to "swoop up and buy." Cramer would trade Ford's offering in a similar fashion; avoid buying it at the outset, but wait for the price to fall amid panic and then buy. He also criticized "pullbackers" who advocate waiting for stocks to fall through the floor before buying. Instead, he recommended picking up stocks on modest intraday declines.
Off the Charts: Goldman Sachs (GS)
Cramer squared off with technician Rick Bensignor over whether or not to buy Goldman after it's substantial run from $47 to $140. According to Bensignor, the chart indicates Goldman is a sell with resistance at $140 and fewer buyers as the stock rises. Cramer says he doesn't mind if Goldman's price rises or falls for the short-term, it is still a buy on its fundamentals. Goldman is an essential force in the financial world and will continue to take market share as companies seek its advice. While Goldman looks expensive, it is actually trading at a discount to historical levels and taking into account its large book value.
Cramer's Outrage: Stop the Nobel Prize Winners!
"Somebody, please, stop the Nobel Prize winners! These guys have become completely toxic to the market!” cried Cramer. The focus of his criticism is Nobel Prize Winner is Paul Krugman and others who said there will be a long, slow recovery and maybe even a "lost generation" before a real upturn. Cramer reiterated this is not the 1980s in Japan. Instead of PhDs, what is really needed are doctors who know how to handle life and death emergencies. Ben Bernanke and Tim Geithner have finally gotten with the program; confidence is needed to get the market back on track; "The best way to diagnose a problem is treating it."
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