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Thursday, 04/03/08
Posted 04/03/08, 11:52
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Thursday, 04/03/08 |
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Dow Jones: |
12,626 |
+ 20 |
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NASDAQ: |
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2,363 |
+ 1 |
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S&P 500: |
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1,369 |
+ 1 |
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Opening Segment 1
Title: |
'Bright Idea'
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. . . .
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Featured Stock(s): |
First Solar, Inc. (FSLR)
See FSLR's official
website
here.
See the Yahoo!
Finance profile for FSLR
here.
See Opening Segment 2,
below...
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC: Of
all the stocks I have
championed on this show...
of all the recommendations
I have stuck with...
through thick and thin...
none has been as
controversial as
First Solar (FSLR)!
Night after night, I get
asked about all sorts of
solar companies in the
Lightning Round...
SunPower (SPWR)...
LDK Solar Co.Ltd. (LDK)...
Evergreen Solar Inc. (ESLR)...
JA Solar (JASO)...
and so many other Chinese
solars... Canadian
solars... and I say,
forget it Jake... It's
FSLR.
And, while I endorsed
Applied Materials (AMAT)
as a hybrid play on solar,
to meet popular demand, I
still do not like it
nearly as much as FSLR.
. . . .
.
In light of the decline
today in
MEMC Electronic Materials
(WFR),
which I gave you a
heads-up on last week... a
company that makes silicon
wafers for solar... a
decline that initially
sent down anything
solar... this is the
time... right now... to
explain why I like FSLR,
and why I think you should
buy it... and buy it
aggressively on any
weakness.
. . . .
.
First, unlike any of the
other solar companies,
FSLR apparently does not
need government subsidies
to make money... It's
profitable...
That's because the rest of
the (solar) companies use
a silicon-based material,
that is far more expensive
and complicated to
produce, than FSLR's
cadmium telluride film
technology.
The cost of silicon is
enormous, and it's not
getting cheaper, while
FSLR continues to make its
own technology less
expensive, bringing down
the cost...
And, even though solar
panels are - on the
surface - more efficient
at producing electricity
by area, FSLR's technology
seems to be catching up.
Very close in efficiency
ratios...
They basically have the
same amount of power right
now, but FSLR's is coming
down (a good thing)...
coming down in cost...
Some day, FSLR's
technology could become as
efficient as silicon, by
area... It
doesn't matter though...
What matters is that it's
cost is already
tremendously more
efficient.
You need to understand
this. It means that
silicon will never be as
cheap as thin film.
So the world is going to
go to thin film.
. . . .
.
Second...
FSLR can mass-produce its
panels at a very low
cost... and the company is
driving down the cost of a
unit of energy, known as a
"cost per watt", to a
price that, over time,
could be as low as oil, or
even coal.
Why does that matter?
Because that means their
panels are for industrial
use... not meant for the
consumer.
. . . .
.
We heard
Cypress Semiconductor (CY)
CEO, T.J. Rodgers, who
helped start
SunPower (SPWR)
- which is owned by CY -
talk about how the
consumer has pulled back
from the discretionary
spending that was driving
solar sales. They're
not putting those ugly
things on roofs anymore.
They can't afford it...
It's like home theater...
it's something else you
don't have to do...
FSLR's customers are
utilities... Those giant
ones you trade... the
utes... which use their
panels to help produce
energy at a time called
"peak demand"...
Now we're hearing that
FSLR is having discussions
with the big boys in the
electricity production
game...
Just today, FSLR's CEO,
Michael Ahearn, told us,
"we are having multiple
discussions. And
what we are trying to get
to this year are some
initial relationships, and
some pilot projects."
That's huge for FSLR!
Right now, it doesn't have
any business in the United
States...
I don't expect FSLR to
replace coal or oil or
natural gas right now, for
what is known as baseline
use... everyday use.
It is already cheap enough
to serve utilities around
the globe without
subsidies. You don't
need a strong economy to
propel (FSLR's) sales.
. . . .
.
FSLR has the proprietary
technology that no one
else has... one that it
can mass produce...
FSLR can put up plants
rapidly to mass produce
its panels in a quantity
that can meet world
demand. You can't
duplicate thin film
technology, just like you
couldn't duplicate
Intel (INTC)'s
thin film technology...
. . . .
.
Now, what does it mean?
I believe this company,
FSLR, is in the early
stages of being the next
Intel... When
I was at my hedge fund, I
made Intel a core position
in 1989, telling people
that it could supplant not
only all semiconductor
companies, but also big
iron companies... IBM,
Unisys, Data General,
Digital Equipment... by
making PCs smarter than
the large machines.
I think FSLR will do the
same... It's going to do
the same to all other
companies in the solar
industry, including the
ones all you skee-daddies
keep calling me about in
the
Lightning Round...
I think it could be like
Intel, which doubled and
doubled and doubled
again... as it came to
dominance.
Ride it... ride it... ride
it.
. . . .
.
Fourth...
FSLR, unlike all other
means of energy, doesn't
leave any footprint.
It's panels last 25 years,
and then they're
recyclable. It
doesn't need vast fields -
think wind... or
refineries, or stinky
power plants... to work...
Utilities fix their panels
on the roofs of commercial
properties... They
contract with utilities.
They're under intense
pressure worldwide to cut
their carbon use.
Just last week, Southern
California Edison (owned
by Edison International
(EIX))
announced their new solar
initiative to install $875
million worth of rooftop
solar panels. I
think only FSLR can meet
the specifications of that
SoCal Ed project...
and they're the largest
utility in the most
important and progressive
state, when it comes to
solar.
. . . .
.
Finally...
Every candidate - McCain,
Obama, Clinton... they've
all endorsed solar as the
best way to go for the
future. That
means years and years of
FSLR orders. And,
right now, it doesn't even
sell into the U.S. yet...
. . . .
.
[See Jim's previous
extensive comments and
argument to buy FSLR
here.]
. . . .
.
The Bottom Line!:
I'm not going to go into
talking about estimates or
valuation... I am just
going to say that
First Solar, Inc. (FSLR)
is the long-term winner.
I think everyone else is
the loser, and I will be
embracing FSLR all year,
as the single-best way to
play green energy...
something that's
imperative, in an era,
where the world is trying
to reduce carbon
emissions, and oil trades
at $100 a barrel.
[See Jim's 2nd Opening
Segment stock picks
below... ]
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See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
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Most popular
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
■ |
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Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
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FSLR |
251.60 |
256.00 |
First Solar, Inc. (FSLR)
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Mutual-Fund-Holdings.com
NEW RESOURCE!
See Ken Heebner's CGM
Focus Fund
Top 25 holdings - The No.
3 Top-Performing Mutual
Fund in 2007
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Opening Segment 2
Title: |
'The Sell Block'
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. . . .
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Featured Stock(s): |
Anheuser-Busch
Companies Inc. (BUD)
Molson Coors Brewing Company
(TAP)
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC: For
tonight's Sell Block, I'm
giving you another pairs
trade... like we did
last week with
Urban Outfitters (URBN)
and
Liz Claiborne Inc. (LIZ)...
This is how the pros do
it... As a
matter of fact, too many
hedge funds do it this
way, which is why there's
so much volatility.
You take a sector, and you
buy the best stock...
while selling or shorting
the worst one.
. . . .
.
Today, I've got the
ultimate beer pairs
trade...
First of all, we heard
from Constellation
Brands Inc. (STZ)
that just reported and
said the beer business is
getting better...
Hmm... so that's a light
bulb that goes off in my
head...
But we want to do a
sophisticated beer trade,
where we buy the best beer
stock, and sell one we
think is going lower...
That's why I believe it's
time to sell the King,
Anheuser-Busch (BUD)...
and buy the new king, Molson Coors (TAP)!
. . . .
.
The #1 reason is that TAP
has now teamed with SAB
Miller to form a joint
venture that could take
down even the mighty BUD.
The two companies are
going to combine their
U.S. subsidiaries into a
joint venture called
Miller Coors, that will
make TAP much more
competitive than BUD...
. . . .
.
The combined Coors and
Miller will have about 29%
market share. Okay,
okay... I know... still
way below BUD's 48%
share... but now at least
you'll have a shot, right?
Coors alone was only 11%.
This is a huge deal...
In terms of cost savings,
I'm looking at $500
million shaved by 2011.
That's about 42% that
should get realized by
TAP.
I call this the ultimate
tag team and, for this
reason alone, I would be
buying TAP...
. . . .
.
Together, these companies
have what I would call
"heft"... They
finally will have enough
money to advertise much
more aggressively, and
then take share from the
king...
I believe this should
happen soon, and you need
to be in ahead of when it
starts happening.
But there's more going on
here...
. . . .
.
First valuation...
Both TAP and BUD trade at
15x expected 2009
earnings, but TAP has a
much higher long-term
growth rate... 12.3%
compared to BUD's pathetic
8.2%. That makes TAP
the cheaper stock by
far...
Then there's the
rest-of-world (i.e.,
ROW) exposure.
TAP is a real ROW-er...
55% of its revenues come
from outside the U.S.
BUD only gets 7% from ROW.
Again, this fact alone
justifies buying TAP over
BUD.
. . . .
.
But why sell BUD?...
The TAP/SAB Miller tag
team... is one reason.
I think BUD also has some
internal woes. It's
not a bad company, but
it's facing problems with
its biggest investment, in
Grupo Modello. BUD
owns nearly 50% of this
company, Mexico's #1
brewer. You probably
know it as Corona...
It's getting hit by lower
U.S. sales, as people pare
back on more expensive
imports and buy the cheap
stuff. A slowing
economy...
The other thing is... I
don't really care that
much for BUD... it can't
much bigger. The
King already dominates the
U.S. market. It just
doesn't have enough growth
to get the same multiple
as TAP.
. . . .
.
In a situation like this,
especially where there's a
huge positive catalyst
coming for the long part
of the pair... I
think you should have to
buy TAP and sell BUD.
The main reason I would do
this as a pairs trade, is
that the biggest risk to
owning any beer stock
right now is the raw costs
of glass, aluminum and,
most important, grains...
Because of our president's
ridiculous food-for-oil
campaign, using corn-based
ethanol, all grains are
being bid up.
Anyway, selling BUD versus
TAP eliminates the
commodity risk. I
think TAP can start
catching up to BUD
domestically, while taking
in big cost savings,
thanks to its big deal
with SAB Miller, which
just happened... and
it will keep kicking BUD's
butt internationally, as
it is already a much
better
ROW-er...
. . . .
.
The Bottom Line!:
If you want to sell like
the pros, and trade like
them, don't just sell
Anheuser-Busch
Companies Inc. (BUD)...
Buy Molson Coors Brewing Company
(TAP)
too!...
. . . .
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
■ |
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Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
|
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BUD |
48.42 |
na |
Anheuser-Busch
Companies Inc. (BUD)
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TAP |
53.79 |
na |
Molson Coors Brewing Company
(TAP)
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Go to the LIGHTNING ROUND from
tonight's show
here >>
See current quotes on Yahoo!
Finance from
tonight's show stocks
here >> |
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Symbol keys: |
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A Charitable Trust stock.
- An asterisk next to a
stock symbol indicates that
Jim mentioned it is a stock
that he manages within
his
charitable trust portfolio.
You can see the complete
portfolio
of stocks
here >> |
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Thumbs up - indicates
he would buy the stock or,
at the very least, not sell
the stock. We do our
best to interpret Jim's
opinion on stocks, as we
think it is indicated by his
comments during the show.
Please read his comments to
decide for yourself. |
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Thumbs down -
indicates he has said not to
buy or to sell the stock,
based on his comments
We do our best to interpret
Jim's opinion on stocks, as
we think it is indicated by
his comments during the
show. Please read his
comments to decide for
yourself. |
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Back up the truck -
indicated by Jim, when he
says the stock is so good,
that he would do a
'mon-back' on the stock...
In other words, this is the
sound someone would say to a
truck driver, "Come on
back... " as he is "backing
up the truck" to load up on
his cargo. Translation
for buying stocks:
This recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point. |
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Stumped. - Of the
2,000+ stocks that Jim
Cramer has in his head, for
which he has an informed
opinion, he sometimes comes
across a caller with a stock
he does not know well enough
to opine on... He then
indicates he is stumped and
will have to come back to
it, after he does some
homework of his own on
the stock. This
usually occurs during the
Lightning Round, when Jim
does not know in advance who
is calling, or what their
stock question is about. |
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Definitions of key phrases
used by Jim, known as
"Cramerisms": |
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Definition: 'Pull the
trigger' is Jim's phrase for making
the decision at that point to trade -
either to 'buy' or
to 'sell' (although he
usually uses the phrase for
buying), as if to say you
should feel comfortable
enough to make the final
decision without looking
back... |
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Definition: 'Ring
the Register' is Jim's phrase for
selling a stock, and making
it a final sale, that you
should not look back on.
Put it behind you. |
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Definition: 'Let It Come In' indicates how you
may wait for it to pull back, or have the
stock price come down briefly, as your
chance (after letting it come in) to buy
the rest of your position (i.e., total
number of shares you own in that stock). |
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Definition: 'backing it up'
or 'doing a 'mon-back' is Jim's
phrase for the metaphor of backing up a
truck to load up on a stock by buying
it. 'Mon-back is short for the
imaginary worker saying, 'Come on
back...' as the truck is backing up to
receive its load... Notice that we use
the little truck icon to indicate where
Jim has mentioned this.
Translation for buying
stocks: This
recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point. |
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See more
"Cramerisms" & other
financial phrases
here >> |
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Helpful Websites: |
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See the stocks currently
known to be in Jim Cramer's
Charitable Trust at:
jim-cramer-charitable-trust-stocks.com |
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See the stocks currently
known to be in Warren
Buffett's portfolio
of
stocks at:
warren-buffett-portfolio.com |
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Stock Homework 101:
This is an excellent
upcoming site that provides
resources and links to help
you do that homework that
Jim Cramer recommends after
hearing his suggestions...
StockHomework101.com
This site is coming soon.
Thank you. |
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FastMoneyRecap:
This site will be a quick
summary of recommendations
made by the great Fast Money
TV show crew, that will
offer you a unique service,
to compare their picks to
Jim Cramer's past comments
about those stocks.
Fast Money Recap - Trades
for next day...
Compare these picks to Jim's
comments for the same
stocks. |
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© 2005-2007 MadMoneyRecap.com ■
Important disclaimer: This site is
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Cramer, and is not associated with
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broadcasts. Please note that all
thumbs up or thumbs down
indicators are not always clearly
indicated on the show and are
interpreted by us as accurately as
possible. Some comments have been
edited for brevity and clarity,
and extraneous material omitted. Please rely on watching
the show yourself, doing
your own homework,
and reading the text of the
comments to draw your own
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on this site should not be used to
make investment decisions and
accuracy, although attempted,
cannot be guaranteed. Please
consult with your own financial
advisor for professional advice. |
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