3/20/2006



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3/17/2006

Lightning Round 3.16.06

3.16.06
bull
Bullish:

CHK (CHESAPEAKE ENERGY CP) AAPL (APPLE COMPUTER, INC. ) LIFC (LIFECELL CORPORATION ) ETP (ENERGY TRANSFER PRNT)
PALM (PALM, INC. ) AVA (AVISTA CORP) BBBB (BLACKBOARD INC. ) PTIE (PAIN THERAPEUTICS )
KLIC (KULICKE AND SOFFA INDUSTRIES, INC. ) CTXS (CITRIX SYSTEMS, INC. ) AW (ALLIED WASTE IND INC) AMTD (TD AMERITRADE HOLDING CORPORATION )
SCHW (CHARLES SCHWAB CORPORATION (THE) ) ET (E*TRADE FINL CORP BTU (PEABODY ENERGY CORP) SSCC (SMURFIT-STONE CONTAINER CORPORATION )
ARNA (ARENA PHARMACEUTICALS, INC. ) COST (COSTCO WHOLESALE CORPORATION ) PWAV (POWERWAVE TECHNOLOGIES, INC. )

bear
Bearish:

BMRN (BIOMARIN PHARMACEUTICAL INC. )
GPS (GAP INC) INTC (INTEL CORPORATION ) TRLG (TRUE RELIGION APPAREL, INC.

3/16/2006

(TXT) message

(TXT)

Sometimes you get a stock that stands astride multiple bull markets - three of them at a time. You get confused and you look for a pure play on each one. Or you can try to make some mad money, and dive right into it.

Right now, we've got a bull market in helicopters, a bull market in private jets, and a bull market in tanks.

Do you know that only one stock that encompasses these three businesses? One stock that would be worth owning for any of them? But to me is a must own. A triple buy given its position in all three businesses.

And the stock - I remember when it was such a terrible company. - the stock is Textron (TXT)!

Upgraded by Lehman Bros. Today.

When you think of the manufacturing renaissance, you need to be thinking of (TXT)!

I want to just take this company. One bull market at a time.

Let's start with helicopters! Their helicopter company. - it's called 'bell helicopter' and it's spent about two decades doing absolutely nothing.

Now, (TXT) is saying that revenues should double between 2004 and 2010. The helicopter business is so good for two reasons that you rarely hear mentioned in the same sentence: oil drilling and the global war on terror.

Helicopters are making money off of oil, because the oil rigs are out in the ocean. And you can only get there with helicopters - there aren't any bridges.

Helicopters also happen to be very good at eliminating terrorists and guerillas.

Right now, the army's refitting (TXT) - which is very well placed. (TXT) has received a contract to build 383 new ARH aircraft for the U.S. army.

Now, let's talk planes. (TXT) owns Cessna. They're the biggest maker of small-to-medium sized jets by market share.

There are two trends pushing this business higher. The first is all these companies in America leasing jets in timeshare fashion. If they couldn't own just a chunk of jet, they hate taking commercial aero. They hate the small seats.

The other trend comes out of 'BRIC' (Brazil, Russia, India and China): we've been talking about BRIC for a year now. People are starting to get rich enough in those countries now, that the first thing they do when they get to be on the Forbes billionaire list, is they go buy a Cessna!

Then, the last business we like at (TXT): tank turrets. Thank you Lycoming. This Company. Has a whole industrial segment. It's the tank turrets that are bull mode. Why do we have a bull market for tank gear? Thank you Iraq.

So, what's the bottom line?!: you've got a company with three businesses that are just smokin'! Why should you buy it now? Just like Illinois tool, I think (TXT) will pre-announce better-than-expected earnings cause of these three bull markets, and the stock will pop. You need to be in it ahead of time. Buy some (TXT), why don't you?!

Cerveza Power Play!

(FMX)


I know I always tell you to never, ever own a bottler. But right now, I'm changing my anti-bottling stance.

I don't want you to own bottlers in the U.S., but if you pimp to Mexico, there's a bottler that I think you've just got to own.

FMX stands for Mexican economic development, and it may be one of the best beverage plays in the world. And you know I like that Diageo (DEO). You know I like the INBEV (INB.BR). But this one is joining that - let's call it a triumph irate.

This co. is the world's no. 2 Coke bottler and it's getting bigger because, in Mexico, they've got a big poor developing co. And they love coke.

I take FMX over pep, and I'll tell you why. Pep's a great co. Solid stock. Good management. But it doesn't have anything like the kind of growth that FMX is sitting on.

And, remember, we are growth addicts on Wall Street. If you only get one takeaway on Jim Cramer's Mad Money, it is that we will pay anything - there is no price that momentum investors will stop paying in order to get growth.

That's why I think FMX will make you money!

To be honest, it's not just about Coca-Cola, this FMX. See, FMX - second largest brewer in Mexico. I'm sure you've had one of these, huh - Dos Equis.

I know beer in America is not in good shape but beer in Mexico is another story. Witness the fact that Mexican beer sales were up 8.4% in the qtr. Wow!

High single digits may not sound great to you, but this is a beverage co. We're talking about. When I saw that figure, I said 'stop trading!'

Then, there's the icing on the cake. FMX runs the largest chain of convenience stores in Latin American., Oxxo, and guess what beers and wines they feature? Can you imagine if bud owned 7-eleven? That's why FMX has what I think is a hammer lock on the kind of quick-to-get beer that every convenience store sells so much of. that's why it's worth owning.

The bottom line!: you've got to go to Mexico to find a brewer or a bottler that I like, and the co. is FMX!

Mad Money: 3.16.06

Opening Discussion:
Brocade (BRCD)


If you really want to understand why a stock trades the way it does, you need to know its history.

There's just so much irrational sentiment that gets attached to a stock because of the way it's treated people in the past.

Figure out what that sentiment is, and you've got a big edge on the people who aren't paying attention to this kind of thing - or at least the people who don't want to acknowledge that they're trading around their emotions.

Brocade (BRCD) is one of these stocks that is so tainted that it's difficult to mention it to people. You know (BRCD). Or maybe you don't.

They're a big maker of network storage devices. Especially network switches, where they're number one by market share.

I think you should buy (BRCD) right now!

But, before you do, let's have an understanding. Let's figure out the taint. See, (BRCD) trades at a nasty discount - a big one - to its peer group.

(BRCD) trades at 21x earnings, compared to 25x earnings for its peers. (BRCD) trades at twice sales; similar companies are trading at 3x sales. (BRCD) is cheap. You're getting a deal if you buy it here, because it trades at a discount to what I think are very bad reasons.

Last year, (BRCD) had to restate 3 years of their earnings because they weren't accounting for options expenses. That hurt everybody who was in the stock.

But it's not why (BRCD)'s tainted. The stock's bad history goes back a lot longer than that. Yeah, it goes back to the stewardship of greg reyes.

I was still trading at my hedge fund when (BRCD) created all that enmity that now surrounds it. And, in fact, I owned (BRCD), so I'm well-placed to understand the irrational hatred that pretty much defines (BRCD) right now.

(Train wreck sound effect)...that's what people think about (BRCD). I'm going to change that in this segment for you.

You can read about this in my first book, 'confessions of a street addict'.

I was holding onto (BRCD) at $160. I watched the stock slide down to $140 in after-hours. This was a sickening decline for me. I was up 36% in a year when the market was down. So this was just a big blotch on an otherwise great year, and I was shamed and shameful, because I was completely nuts.

Now, I decided to cut my losses and sell (BRCD), even though I would be selling at a loss. Remember this, your first loss is your best loss.

After I sold (BRCD), you know what? The thing just plummeted. It plummeted all the way from $160 to $140 to $130 - I don't have enough time in the segment to tell you it all. Single digits, and that's where it remains.

It had massive problems internally with the SEC

You don't let your losses kill you. It's better to be saved by a small loss, than wiped out by a big one, because you're afraid to sell a bad cost below your cost basis.

A lot of people got burned by this one - a lot of people. This was the ultimate nasdaq house of pain. And a lot of other people saw it happen. That's why (BRCD) is so tainted right now.

You know what will get rid of the taint? When they beat they beat the numbers on their next earnings report in may. And I am telling you - right here, right now, on mad money - that will happen!

Numbers will always beat sentiment in the same way that scissors beats paper. At the end of the day, it just might take you a long time to get there.

Now, why do I think they'll beat the numbers? Let's talk substance and not just emotion.

They make network storage products, and we've got just an unbelievable bull market that has started in the last six months, in network storage. After four long years of bear market, network storage is on fire!

Networks are getting bigger and they've got more and more data to deal with. It's that simple. It's so simple that MCDATA, which does network storage - and may I just say, that I have historically thought that mcdata was really an awful co.

So simple that network appliance (NTAP) just beat their estimates. Hey, this business is really good when all those companies are beating, and where these guys go, (BRCD) will follow.

They're still the market leader in network switches. I can't believe, after all the damage they did, it's still the darn market leader!

They don't just have new products. They've got new management that you can trust, that you can bank on!

The chairman's a guy named david house. Hey, remember him? I do. I knew him from the old days at intel. The guy should be running Intel - he's that good. Instead, he's the chairman of (BRCD).

What's that mean? How about sell your INTC already - buy (BRCD)! Buy, buy, buy!

There's one last reason to get behind the stock: the whole network industry is consolidating. People keep talking about (BRCD) as a takeover target. Possibly even bought by CSCO, who just bought Scientific Atlanta. (BRCD)'s that cheap.

Remember, we only speculate on takeovers where the fundamentals are improving. And they're improving at (BRCD)!

The bottom line!: (BRCD) should be trading higher than it is. Their earnings in may, or maybe a takeover bid, should break that taint! I think you've got to get into (BRCD) before then!

Final remark (BRCD): If you pay up to $6, I think you're fine.