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tv   Mad Money  CNBC  May 9, 2012 11:00pm-12:00am EDT

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into useful answers. we're 78,000 people looking out for 70 million americans. that's health in numbers. unitedhealthcare. i'm jim cramer, and welcome to my world. y you need to get in the game! firms are going to go out of business and he's nuts! they're nuts! they know nothing! i always like to say there's a bull market somewhere. "mad money." you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to help you save a little money. my job is not just to entertain you but to educate and teach you. so call me at 1-800-743-cnbc. let me ask you a question. what did you do this morning at the point of maximum pain? >> the house of pain. >> at 10:30 a.m. when the dow had fallen 183 points and it looked like the end of the world, was this you?
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did you panic? did you dump everything? >> sell, sell, sell. >> or did you take a deep breath and calmly wait for a better moment to sell? something we got almost immediately as the market bottomed right then and there. dow going on to close down 97 points, s&p declining and the nasdaq losing .39. but boy, it shot right up. nasdaq was actually positive. listen, when fear abounds, you've got to have the guts, the guts to do nothing. rather than unloading stock right into the teeth of a selloff, which is almost always, always the worst time to capitulate. that's what you did. i know it is incredibly hard not to freak out when everyone around you is panicking. but maybe it feels like people lose their cool every time the
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profligate greeks rebel against the spartans among them and the rain from spain falls all over the globe, not just on the iberian plain. however, if you did sell at the bottom, maybe tonight -- cow bell. a always need more cow bell. maybe tonight you should dine in hell with the rest of the 300 and be forced to watch rex harrison beat a cockney accent out of some poor but fair lady. maybe you should do something i've been talking about. the fan of panic club that i want to set up to accommodate the throngs of people that seem addicted to selling at the bottom of any given day. or did you keep your head when everyone else is losing yours? even by sitting tight or actually doing -- i mean, get this. buying into the sale the market was throwing. as i urged you to do last night. even if you hate the market r right now, i'm simply advocating that you wait for higher prices intraday rather than dump your
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stock into today's blue light special sale. s sit tight, wait for the panic to s subside and then get a little rally like we did. a couple of rallies. sell then. i wish i could just give you all some xanax, frankly, the miracle d drug for panic attacks. but i don't even play a doctor on tv. unless a juris doctor suddenly has the ability to write prescriptions. but the reason for this selloff aren't going to be cured any time soon. i can't blame you one bit for saying to heck with the whole thing, forget it. there's always going to be selloffs even if europe gets cured. i want to circle back to something from a month ago when the fabulous rally of the first quarter was stalling out and we finally got it to decline. t the only way to immunize yourself from panic is prepare for a pullback before it happens. which is why i want to go over the stocks i told you would be terrific buys if the market declined by 5% to 8%, because
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guess what -- it's declining by 5% to 8%. i'm talking about the amazing growth stocks that almost never seem to come down, that you just never get a sale on. you're like there's never any inventory for these things. they never cut the price. when they do cut the price, you know what happens? you're too scared to buy them. exactly a month ago, i made a list of the magnificent seven growth stocks of our era, the ones you should buy when we do g get a significant pullback like this one. i suggested that before the selloff hits us, as they always do. you always get selloffs. so you might get comfortable with some of them. you might get comfortable with apple, with starbucks, with chipotle mexican grill. ross stores, allergan, lululemon. these are classic growth stocks. i like these stocks because they all have growth paths ahead of superior managements. you've seen them on the show. incredibly pro-shareholder. colossal expansion possibilities and market opportunities that are much bigger than people realize.
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yeah. they're all innovators. n not companies that sit back and l let the faltering global economy have its way with them. no, these aren't stocks with sizable dividends, another cohort which i think you know is perfect for this environment, as you will hear later in the show. they aren't so called countercyclicals like con ed, to mention growth utility that's given 7% return, or kimberly clark, the kleenex diaper paper towel maker, that hit a 52-week high today. they're terrific companies that rarely get put on sale. when it happens, i'm suggesting you do some buying. so let's go over this list of seven. first, a month ago i told you to buy the greatest growth stock of our time, apple. and sell off it has. plummeting to $570. s so what happened in the interim? apple reported its best quarter ever. i know there's a lot of chatter that iphone sales could slow because carriers are balking at
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subsidizing apple's handsets. i just came back from ctia in new orleans, the wireless conference. not long ago, sprint paid $15 billion for the privilege of selling iphones to its customer b base. just last night at the conference, ceo dan hesse told us the bet is already paying off big. if it's paying off big, what's the problem? i think it's a win-win for both. how about starbucks? f falling from $61 to $54. that looks like a viable dip to me. some are worried about european exposure. the ceo howard schultz has told you not to worry. the issue is under control. one of the major tenets is that the companies have superior managements that can deal with problems and turn them into opportunities and you've got to give them the benefit of the doubt. howard schultz gets the benefit of the doubt. he earned it.
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you want a selloff that's truly viable? how about the 40-point decline we just saw in chipotle mexican grill. this had the best quarter of all the players in the restaurant industry. chop house southeast asian kitchen, i recently dined there. a huge worldwide hit, although they've got some serious service kinks that need to be worked out. ross stores? here's a problem, but it's a high quality problem. down just three points in change. what can you do? what's it doing wrong? a domestic retailer with zero exposure to europe. gasoline has come down. what's not to like? two health care plays, now they've come down. allergan from 96 to 93. but it was widely viewed as a weak quarter. i think you've got to get a further decline on allergan. in this panic driven market,
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celgene, people perceived a slowing in company sales because it thought what many thought was a soft quarter. i know that company better than the analysts. i lived around the corner from it. i lived around the corner from the ceo. that weakness was largely caused b by one-time only concerns that i think were widely overblown. i i think it's an opportunity to buy the stock ahead of what will be a slew of positive catalysts. finally there is lululemon. just giving you 10% decline from its high. how about reporting the best quarter of all the power companies. the lulu stock got crushed as collateral damage when fossil said things. i get this. people wear fossil watches and they also work out and take yoga classes while wearing the lulu lemon anti stink pants. lulu is not exposed to europe. irrational pullback, good opportunity. i want to be crystal clear again about this.
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the market is unremittingly nasty. i'm not saying i like this market. i think it will stay that way until the europeans address their serious problems. the repercussions should not be ignored. i'm simply saying if you want out, don't sell into the panic. wait for the market to give you a better moment. if you have some actual courage, which almost no one has, i know, now you know which growth stocks have come down enough to be worth buying. here's the bottom line. panic is the natural reaction to the sell off this morning, but i need you to check that feeling of fear and do one of two very unnatural things. either sit tight and not sell and wait for a better moment to s sell, or actually yes, total heresy, do some buying. let's go to weeks in georgia. >> caller: it's been a long time, cramer, how you doing, buddy? >> i'm doing okay. i just got back from new orleans. slept about seven hours in three days. what's up?
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>> caller: ctwm, you have a distasteful sentiment toward that company. nonetheless, bed, bath and beyond, they just bought the company, acquired them. you told me in january you like bbby. do you still like bbby? >> bbby is smoking. t that was a great acquisition. the stock is up one point. this is bed bath. it's also harmon. i've got to tell you. this is one of the most consistent companies around the corner. headquartered about a minute from me. one of the most consistent retailers in the world. they've got no europe. good benefit from gasoline coming down. bed, bath & beyond is for me. let's go to check in florida. >> caller: thanks for making me a better investor. appreciate it much. but i need your help on c.o.p. and psx. combined they are down about $8 a share post-split and some of that was before the market and oil price pullback. today psx, the supposed weak sister, rebounded 8%.
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did the split fail to be a catalyst? do i sell or what? >> i play with an open hand, unlike poker face lady gaga. i have been working three days now with my staff, with ted graham. i've been working with nicole urken and cliff mason trying to put together a valuation package so the people can have it on the two pieces. i don't have it yet. i have not been able to get my arms around what it's going to be worth. you'll have to stay tuned to next week. i'm not punting. i just haven't been able to get m my arms around it, but i will. let's go to brad in california, please. brad? >> caller: boo-yah, socal. thank you for everything you do for every investor. >> thank you, chief. what's up? >> caller: nice rivalry between your nationals and the -- i love this, i love what's going on. >> it's no rivalry. we're just laying down and dying. i mean, i can't even talk about the phillies with my dad. it's too depressing.
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you got something else to talk about, i'll do it. can't be the sixers or flyers. >> caller: on a lighter note -- >> lighter note, yeah, in the market. i'm sorry. >> caller: macy's. are you as flabbergasted as i am that the investors would react the way they did after really sterling results? >> this is what the market is all about, brad. it's what it's come to. a great domestic retailer. they don't have a great april. terry lundgren is a bust. now he should be james bond and daniel craig should be the head of macy's. i think macy's -- let them cut the numbers. let them say negative things. you and i will be shopping there this weekend. i want you to buy, buy, buy. don't join the fan of panic club. that's like the mickey mouse club. although disney had a good quarter. sit tight as you look into the nasty teeth of a selloff. instead, use other people's fear to make some money. the magnificent seven, i like
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apple, starbucks, chipotle, ross, allergan, celgene, lulu lemon. which one of those is steve mcqueen and which one is yul brenner? maybe they all are. coming up, bad seed? the market mowed down scott's miracle grow after earnings, trimming the stock by 15%. should a strong spring season soon help bring this company back in bloom? find out when cramer rounds up the ceo for an exclusive interview next. and later, eog resources beat the street's expectations, but oil has been sliding steeply over the past week. now on track for its worst losing streak in two years. could this dry up eog's revenue? cramer drills down with its ceo to find out. all coming up on "mad money." miss out on some "mad money"? get your text alert today. text mm to 26221 to get cramer
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right on your phone. for more info, visit or give us a call at 1-800-743-cnbc.
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after the second ugly day in a row don't forget the market often overreacts to bad news. something that's especially true at the level of individual stocks. take yesterday, where a host of companies got torn to pieces after they reported disappointing numbers. i'm not going to defend fossil, mako surgical, rackspace or dendreon. they were all mauled by the bears. but i thought scots miracle grow, smg, that's the leading maker of lawn and garden products, right? you know them. number one. they got a 2.55% yield. pretty juicy. the stock got sent to the guillotine. $55 to $46. that's a 9% decline. what did the company do to deserve this harsh punishment? scott's miracle grow delivered a mixed quarter. revenues came in a bit light.
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it seems like maybe scott's wasn't prepared for the unseasonably warm weather this winter. strong demand forced scotts to scramble in order to get more product on the shelves. i don't know. i think people expected results to be spectacular, perfect. the quarter raised too many questions for the skeptical analysts community. really controlled the chatter around the stock. that led to the severe selloff. now stock is giving up all its gains for the year. it's a good time to start bottom fishing? let's talk to jim hagedorn, find out where his company is headed. mr. hagedorn, welcome back to "mad money." boo-yah. >> boo-yah. >> when i see a stock that gets hammered like yours did of a brand name of a product that i use, i get interested. i know that this is what i'm going to start using this summer and i'll be using it in another week. i come back, i say was it the expectations? did the analysts not understand -- were you communicating?
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if you had a do-over, do over the conference call, the press release, would you change things? >> i'd probably get in trouble for this. the answer is no. i think there was an issue, and the issue was the analysts community got way ahead of us. they saw the weather in march. >> good weather in march. >> business is great. units are up like 8%. we've taken share. lawn fertilizer, which we were really pushing hard on, we got like a million more units sold this year than last year. >> you said last week was the second-best week in the company's history. >> so people started writing the numbers up to the point where there were guys like this last week wrote it up like 50 cents over what we delivered, and i think there were a lot of people that got caught on that. >> i think that's important because i think a lot of people at home say well, wait a second, something must have really gone wrong. it is true, you talked about dave evans, the violence and demand pattern, and you mentioned a thing called -- the
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beginning of the season was freaking explosive, which made me feel that perhaps the company wasn't ready for what happened, but i couldn't really get it. >> lawn and garden is i think maybe even worse than christmas. it's one of those things where when the weather is happening and the advertising is happening and the promotions that the at the retailer is happening, stuff goes bananas and march was one of those crazy bananas months. so it is explosive in this business. so when things are really happening, they're happening. >> when things are really great, they're great. >> awesomely good. this business is explosive. we have the best supply chain in the business. and we were stressed by it. i think other people were more than stressed by it. >> well, one thing that occurred to me -- there's a theme. you decided not to so called take price, or raise prices. this confused me. why? because i don't know -- it's like kleenex for me.
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i've been a gardener for 25 years. i don't know to ask -- i only know miracle-gro. i only know kleenex. why couldn't you raise prices? you're the most trusted name. >> look, last year you know the weather was terrible. and so when we got through the season, we basically said is it the consumer, is there something else happening? it's easy to blame the weather. was there something happening? and so i just decided across the board mostly, a few items we took pricing on, that we're not taking pricing. i'm not going to add another variable to the business next year to if there is a problem with the consumer, so we stuck with pricing. we took our advertising up 50%, and it was really a move to say let's try to say can we grow the category, can we make univium go and can we take share? we've done all those things this
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year. >> the stock has gone 40 to 60 to 40. is the business itself too hard to forecast for anybody because of the weather pattern? >> you know, i think it's not for the faint of heart. we're a seasonal lawn and garden business. we're running our business for the long term. i think we've got a terrific management team and we're not chasing quarters. so if you look at -- if you read the call, listen to the call, we're doing all the things we said we were going to do. that's one of the things that i like coming with you, is everything that we've talked about, we've done. and everything we said we're going to do going into this year, we've done. we beat the first half. we're ahead of our own numbers. our view is people get out ahead of themselves. only on wall street would it be my fault that people get ahead of themselves. >> right. i think one of the things you presented in the conference call was you talked about some of the big markets and how things are really looking up, but no one seemed to care that the season moved to may.
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it's almost that they felt that because it didn't happen during april, the company is finished. >> there are a lot of people that want us to call the numbers up. the point of sale year, we're only like halfway through it. we're not calling our numbers up now. it sort of depends. may is a super critical month. it's supposed to be a great weekend of weather. >> one of the things that i think has got people perturbed is that we all garden pretty much at the same time, so like i figure well, you're advertising a lot. you're taking share because you've got the great brand name. what's difficult about it? i know i'm going to go to home depot and buy my scott's every single year right before planting season, so it should be a more regular business. >> i think it's more regular than people -- if you go back and look at five-year averages, it's not as crazy as it feels, but if people are going to manage quarter to quarter and not look at the full year, i think there's a chance they
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could get caught out different from us. >> but your advertising has been very aggressive, so i would naturally think the sales would be better than if they advertise less. >> and they are. and we're taking big-time share. so that was part of what we said. we're going to grow the category. we're going to take the lion's share of the growth and we've done that. >> now, do you think that -- the other issue about commodity volatility. now, you were hedged on commodities. and yet people acted as if they were surprised that you -- i've got to tell you, this was the oddest conference call i've heard in years. it was the oddest. >> people focus crazy on urea. we've got a really good hedging policy on it. we're not exposed on urea. we told people in the call we're taking pricing next year. >> i know. >> so we're back not to excessive pricing, but costs are up. we're going to price for that. >> i'll tell you why i feel better, because it seems like
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you're as confused as i am. >> we were disappointed. >> disappointed in the stock or disappointed in the analysts or disappointed in yourselves? >> not in myself. we own a third of the company. they're like what's happening with the business? i'm like nothing's happening with the business. the analyst community got ahead of themselves and they had to back down. that's what happened. >> i hope people at home understand when they buy scott's miracle-gro this weekend, that there is a strange disconnect between the analyst community and your company. i'm glad you were here to explain it. really terrific. i want to thank jim hagedorn, the chairman and ceo of scott's miracle-gro. you've got to listen to this conference call. it's a bizarre, otherworldly experience for a company that's pretty consistent over many years. stay with company. >> coming up. eog resources beat the street's expectations, but oil has been
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sliding steeply over the past week, now on track for its worst losing streak in two years. could this dry up eog's revenue? cramer drills down with its ceo to find out. later, dial for dollars? volatility swirls and talk of bonds is back in fashion. cramer's got two alternatives that have your profits on the line, all coming up on "mad money."
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in the environment where the price of oil seems to be in a free fall, what are we supposed to do when they post a spectacular quarter? eog posted some terrific results last night. nearly rising a buck. should we do this as an opportunity where the markets blind to eog's fabulous fundamentals because they can't see past the falling price of crude, or is it a cautionary sign that no matter how well an oil company does, the stock will never be rewarded as long as the underlying commodity seems to be going lower at the moment? it depends a great deal on your own willingness to suffer from short-term pain for what i think will be long-term gain. if there's any oil company that's worth owning here, it is eog. this firm has some of the best
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assets in north america, including acreage in the bakken and eagle ford shales, two of the biggest discoveries since prudhoe bay. eog has moved aggressively, probably more than any other company i follow. together they now account for 84% of the company's revenues. amazing transformation. even though the price of crude may be falling, eog is actually in a position to sell its own oil at a higher price than west texas intermediate. it built itself. the current price there is $112 a barrel. that's $16 above what everybody else is getting. company built its own unloading terminal in louisiana. they got that to deliver. last night eog delivered a three-cent earnings beat. get this, 47.9% rise year over year. thanks to a 49% increase in oil production and 48% increase in liquids.
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even better, eog raised its liquid production forecast from 2012 to 30% to 33%. this is the only real growth stock in the entire oil and gas business. let's talk to mark papa. he's chairman and ceo of eog resources. to learn more about the quarter. mr. papa, welcome back to "mad money." >> hey, thanks for having me again, jim. >> do you think my characterization that you are a growth company, given the fact that you keep finding more and more oil, fits, rather than just calling you some oil and gas play? >> i agree with your characterization. i mean, if any company in this sector is a growth company, we are. what's important is it's not through m and a. it's through organic growth. we're growing through the drill bit. we're finding new oil and gas and exploiting it that way, which we believe is a cheaper and higher rate of return on the methodology to grow. >> it's not just that i think -- you're an innately conservative
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guy. just a plain old fashioned conservative oil man. but you did use this term about eagleford. you said now this 800-pound gorilla is developing into a 1,000-pound gorilla. explain that to the people out there. >> yeah. simply put, we believe this is the largest oil field found in the united states since prudhoe bay and that was in 1968, and not only is it the largest oil field found since prudhoe bay, we believe it yields the best reinvestment rate of return of any current oil and gas investment that we know of in the industry right now for large assets. so it's really got a double positive whammy. and that's why we're so excited about it and we call it an 800-pound gorilla developing into a 1,000-pound gorilla. it's truly a one of a kind asset. >> you also made a point in the call, which is you're not even
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drilling as much as might be expected, because the technological improvements are happening so fast in your industry. >> yeah. what's really happening there is typically big fields tend to get bigger and we've seen improvements in productivity and pro-well reserves over just a 12-month period. we have a bit of a dilemma here. we have about an 11-year inventory of wells to drill, and some people could say well, at the rate you're going, it's going to take you 11 years to drill this up. why don't you use twice as many rigs and drill it up, say, in five or six years, but the problem is we're making better wells than we were making a year ago and we'd say let's let technology take the course here, until we really see whether technology has peaked or not. we think it hasn't peaked. we're moving at a moderate pace, but not a rapid pace to develop this particular asset. >> you make two interesting
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calls in your conference call. one is that you think that oil should be about $105. and the second is -- in other words, it's going to stay elevated. the second is you remain, i'm quoting you, very cautious on natural gas. now, there are a lot of people who feel that natural gas had a two-month high today, that it's bottomed and ready to go higher. you are taking issue with both stances, aren't you? >> yeah, we are. we were the early ones to make a bearish call on natural gas and actually change the company course on that. natural gas has probably gotten ahead of itself for this year, and we don't see an optimistic case for the rest of this year for natural gas. the best hope we see is that we have a colder than average winter this particular winter and maybe we see an upside in 2013, but not in 2012. on the oil front, we think
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markets are tighter than what's actually occurring and we think there's a lot of noise about what's going on in the eu right now and that's temporarily depressing oil prices. but we believe when the year is over, $105 for wti is likely what the average price is going to be, and indeed for the first four months, that's about what the price has averaged so far. >> when i listen to you, i always think -- there was the cover of "fortune" magazine. exxon still just using natural gas for utility. if we decided as a nation, a commitment in washington, that we were going to power everything that moves on our highways, particularly our trucks, with natural gas, we could do that within three or four years. we have that much in storage and in the ground that we don't know what to do with. >> yeah. you can easily make a pragmatic case, jim, that within, i would say ten years, we can become
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essentially north american energy independent of both oil and natural gas by turning loose our technology, really. we can significantly reduce our oil imports and the remainder of what would be oil imports, we can utilize natural gas as a transportation fuel for the rest of it. so we have the chance of a lifetime really, if we can get the proper energy policy directed, and that chance of a lifetime was generated not by any ideas that came out of washington. it was generated by companies such as eog and others, without any special tax credits, and, you know, it's ours to lose as a nation. and i feel very passionate about this. and it's just a case where all we have to do is just implement the technologies that we now
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have captured, and just let the free markets run. >> i think your passion is justified. in the meantime, i know you're going to make a lot of money for shareholders because you're the best there is. mark papa, thank you for coming on "mad money." >> appreciate your support, jim. thanks for having me. >> it's hard not to be passionate about such a bold claim, but if you listen to this conference call like i did, you will understand why mr. mark papa is doing the right thing and he's going to make you a lot of money, even if oil goes down. that's the true takeaway. stick with eog. stay with cramer. coming up, the clock is ticking. call cramer at 1-800-743-cnbc to find out how to fire away at cramer on the lightning round. can he withstand your thunderous onslaught of stocks? and later, how do your stocks stack up in a mystifying market? cramer makes sure your portfolio makes the grade. all coming up on "mad money."
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it is time!
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time for the lightning round! are you ready? time for the lightning round. i'm going to start with jeff in virginia. jeff? >> caller: boo-yah. my stock is atml. >> i've got so many other good ones right now. i'm going to send you to intel. yes, to intel because i like that yield. and you need that protection after what happened tonight. let's go to john in new york. >> caller: hey, jim. i'm calling about herbalife, hlf. it was doing great. then david einhorn made some comments about it and it went off a cliff. >> meanwhile,, herb greenberg has done some unbelievable writing about hlf, which has kept me from sticking my head into the lion's den. but the ceo, he can answer the questions. john in florida. >> caller: hi, jim.
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i'd like to know your opinion about blue nile, nile. >> too dangerous for me. up a couple bucks maybe. >> sell, sell, sell. >> wow, discretionary goods, i'm going to wait right now. that reminds me more of fossil than of tiffany. jeremy in florida. >> caller: a big boo-yah from indiana university. >> oh, man, we love kelly school of business. what's going on? >> caller: my question for you is if facebook ipo is going to affect trading on zynga. >> it's a $5 billion company. i've been staying away from all the ipos. i love the product. whether it be yelp or zynga or literally away. the only one i like is linkedin. let's go to bernie in south carolina. >> caller: hello. >> what's up?
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>> caller: jim, congratulations, i want to congratulate you on everything you do and thank you. i want to tell you i have at&t, pfizer, and progress energy as a result of what you have advised me to do. >> thank you. those are all good and you know that. >> caller: great. great. i want to know about amerigas. >> no, i do not like propane. i cannot recommend that. i think propane is well into glut. kevin in illinois. >> caller: what's up, jimbo? i wanted to ask you if i should hold or sell stock, that company is the world wrestling entertainment. >> no growth. i need growth. i think it's a great opportunity to lighten up on wwe. and that, ladies and gentlemen, is the conclusion of the lightning round! >> the lightning round is sponsored by td ameritrade.
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want to keep your head above water regardless of panic, stay diversified. that's why every wednesday for the last decade, both radio and
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now on tv, we play "am i diversified" where you call me or e-mail me or tweet me. you tell me your top five holdings and i'll tell you if your portfolio is diversified enough, maybe mix it up a little, make some changes. we're starting with a tweet today since we decided to become huge on twitter. this one is from @stevenlangcr. i'm curious to know how you handle real estate investment trusts. am i diversified? you know, let me tell you how hard this is. you know what makes this business hard? these are great companies. i mean, i think washington real estate is terrific. my friend and i go back forth on that one all the time.
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weyerhaeuser, my charitable trust did own it. had such a good run. here's the problem. i'm still not going to go -- i'm still not going to bless this because they are all real estate investment trusts and they trade together. uniquely noneurope. great group to own. terry in arkansas. terry? >> caller: boo-yah, mr. cramer. how are you today? >> i'm doing real good, terry. how about you? >> caller: i'm doing good. i need to know if i'm diversified. >> fire away. >> caller: diageo, deo, hershey, hsy, progress energy, pgn, at&t, and altria, m.o. >> if you own nothing but food stocks, and packaged food stocks, you are doing great, but that would also be not diversified. i'm going to have to do something with these. we're going to actually have to get rid of diageo, because we
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can't have two food stocks and also have a tobacco stock. they're too much alike. progress energy, absolutely terrific utility. at&t, what can i say? we're going to switch this up. we're going to take out diageo and i'm going to put in bristol myers. that way i got a little pharmaceutical and that's going to give me the diversification i need and give me a higher yield than diageo. i want to go to louis in california. >> caller: good afternoon, dr. cramer. >> i didn't know i was a doctor. i'll take it. what's up? >> caller: thank you for your sage advice and education to us at-home investors. it's been really helpful, profitable and appreciated. >> that's what i want. i had a lot of people in new orleans who watch the show, felt terrific. what's going on? >> caller: i've been concentrating in high dividend stocks. as long as they can cover the dividend without getting into the capital. my biggest percentage of
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portfolio position is cplp, capital products limited partners, a ship leasing company. two, two harbors, a mortgage reit. >> right >> caller: p.e.r. then starbucks, i've been ringing the register a little bit lately. and then finally my spec trade is veco, a semiconductor equipment manufacturer. am i diversified? >> i am so glad that you mentioned that veco was your spec trade. that is not the kind of tech name that i'm looking for right now. i want a tech with a little bit of yield. after the cisco disaster tonight, you have to be careful with tech. this capital product partners, that's too risky for me. i don't like the tanker group.
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sandridge has great yield. starbucks, classic growth company. and yes, two harbors, a real estate that i think is doing a good job. i think you almost got it. you almost got it. but be careful because veco can go lower. specs can go lower.
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i'm smitten. not a word you hear very often from a grown man, but after
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being in new orleans at the ctia international wireless conference, there's no way to avoid falling head over heels for both verizon and at&t. these two stocks remain quite cheap. maybe they'll get cheaper. most of you probably get a bill from them every month. each is a different animal. verizon, you're only getting half a wireless company. vodafone owns the other half. it's a business that has had multiple years of growth ahead of it and the up front cost of its subscriber base going from dumb phones to heavy subsidized smart phones. you'll see intense market expansion in 2013. you wish you had 100% of that, but you only get half. the rest of the company, whether we're talking about fios or land lines is now in shape to generate a ton of cash. that's one of the reasons cisco is hurting so bad. it's a win for verizon. at&t, all the wireless business and a company that's already paid the price for having to subsidize its smart phone migration.
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both companies have monster dividends. verizon yields five. let's put it all together. when we look at the most secure stocks to buy in 2012, secure, not the junior or senior growth, we want consistent growth, expanding gross margins, and most of all, no europe! thanks to the steady increase in mobile phone usage coupled with higher fees and bountiful dividends, these can both afford to pay and raise both verizon and at&t give you the first two. the third, amazing how fabulous it is to have no connection to europe whatsoever. exhibited by recent studies showing small business optimism and increases in small business loans. while we don't pick up land lines as much as we used to, but because of the triple play combinations, they are levered to new household formation. that's been absurdly low the last four years. finally, here's the really incredible thing about verizon and at&t.
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in the last year, they've won control over some of the battle with the smart phone makers. the improvement by all the other players, especially android, will keep them from having to pay exorbitant fees to apple. i'm calling it a win for apple, a win for the telco customers. you should think about sprint for the bonds of the stock to that indebted third wheel in what many will always be a two wheeler industry. these two stocks are the single best alternatives to long-term bond funds and certificate deposits, both of which have been in vogue for ages. they just make no sense versus the gigantic yields you can get from owning at&t or verizon, especially now that i've interviewed the top wireless execs at both companies and looked into the whites of their eyes. stick with cramer. [ male announcer ] this... is the at&t network.
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a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions, to bring all the right results. [ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪
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