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[Beginning of
Cramer's
verbatim
comments for
this segment...]
Jim:
What do you do
when you think
that your
country is, lets
say, the wrong
track… when jobs
are fleeing
overseas… or
just outright
disappearing…
and our currency
is in free
fall?… You jump
ship… that is
right when it
comes to stocks,
to paraphrase
stock seer
Samuel Johnson…
patriotism is
the last refuge
of a bad
investor… if you
are worried that
Speaker of the
House and class
trader, Nancy
Pelosi is just
itching to take
an axe to big
business… or
even if you have
got no problem
with the
Democrats in
Washington… and
you recognize
that for
structural
reasons… huge
budget deficit,
snail like
economic growth,
and a
potentially
higher tax
regime… the
United States
just ain’t what
it used to be…
then you had
better get ready
to join my
foreign legion
of dividend
stocks...
All week we are
doing it… the only
way to protect
yourself from
weakness in the US
is with
international
diversification… up
to 20% of your
stocks can be
international…
making sure that you
do not have all of
your eggs in an
American stock
basket… all week I
have been listing
new members in my
foreign legion.. the
criteria, I am
looking for stocks
from countries with
healthier currencies
that belong to
companies with
strong fundamentals…
and absolutely, big
dividends… that is
why today we are
headed to Norway… a
country that could
be the polar
opposite of the
United States.. on
the one hand, it is
a socialist as they
come… but on the
other hand, it has
got a mighty budget
surplus… a big trade
surplus… and the
country itself owns
barrels upon barrels
of oil… all of which
combine to make its
currency… the
Norwegian krone,
yeah the kroner
here… one of the
safest and strongest
in the world.
That is right…
Norway is about a
lot more than
Aquavie, or Kravlox
for that matter…
although they are
both delicious… it
is coins that we
care about… now, I
do not recommend
that you actually
trade currencies… it
is too fast and too
furious… I once made
a big currency bet
at my old hedge
fund… and then went
out with my Dad to
get lunch at Burger
King… and when I
came back, the Cold
War had ended, the
world had changed,
and I lost a small
fortune… they had it
their way… but we
can still play the
weak dollar and the
stronger krone by
owning Norwegian
stocks that trade as
ADR’s on US
exchanges… because
as the krone becomes
more valuable…
relative to the
greenback… the
Norwegian ADR’s will
increase to reflect
the change in
currencies.
Is there a Norwegian
company that has
what it takes to
join the elite
Cramerican foreign
legion…
How about
StatoilHydro ASA (STO)?…
The mad Viking oil
producers… oil has
regained its place
in the trinity of
sectors that lead
this market… along
with the banks and
tech stocks..
although people are
now telling me that
Cisco was not so
hot… thanks a lot…
it could be just the
oil stock that you
need to fill out
your portfolio with
some nice
Scandinavian flavor
to boot.
Statoil, the sixth
largest European oil
company, the worlds
largest off shore
driller… I think
Transocean Inc. (RIG)
is cheap here… has
all of the things
that I like to see
in an oil company…
production growth, a
high drilling
success rate when it
searches for new
oil, relatively low
production costs,
and more exposure to
most to higher oil
prices… you know I
think they are going
higher… along with a
notoriously B.I.G.
juicy 4.4% yield…
yesterday the
company reported
what I thought was a
solid quarter with a
positive long term
outlook… Statoil
should see steady 4%
volume growth… I
know it is an
integrated natural
gas, they are
throwing off a much
bigger vibe…but
stick with me… they
are going to have
that growth thru
2012... that is
pretty strong for a
large oil company
with a lot of mature
fields… and they do
have mature fields…
but Statoil can do
it simply because it
is great at finding
new oil… not just in
its backyard by the
way… 75% of that
growth will be
coming from growth
outside of Norway.
So far the company
has already made 30
new discoveries in
2009... it has got a
70% drilling success
rate in Norway… 60%
in the rest of the
world… mostly since
2007... most other
oil companies do not
even come
approaching those
levels… plus Statoil
is not tapped out…
as they are still
areas in the north
Norwegian Sea and
the Barren Sea that
are still being
opened for
exploration…
creating more
potential upside.
And even though
Statoil has one of
the largest
exploration budgets
in Europe… $2.7b, 70
wells plan… it also
is on track to cut
costs this year by
$8.5b Norwegian
krone… hey that is a
lot of money, that
is $1.4b, just in
case you are going
there… thanks to a
cost rationalization
program that has
lowered Statoil’s
production cost by
25%… that is about
36 Norwegian krone,
$6 a barrel.
How about the
dividend… a must for
any member of my
foreign legion…
Statoil expected to
pay out .96 cents a
share annually….
4.4% yield… with
$4.30 in expected
cash flow… hey, the
dividend is more
than safe… now it
might not be able to
beat the 6.5% yield
yet from BP… 5.4%
from Shell…
although, it is
clearly better than
most of the yields
you can get out of
the integrated oils
based in the U.S.
Why am I picking
Statoil over the two
others that have got
larger dividends?…
Partly because
Statoil is so great
at finding new oil…
but another reason
is that among the
large European
players Statoil is
the most levered to
higher oil prices…
Goldman estimates
that every one
dollar change in oil
prices results in
3.6% change in
Statoil’s earnings…
so when you see the
crude futures
trading up… this is
the one that you
grab… the others
will only go up
about 2.1%… that
makes Statoil a
great stock to have
if you believe oil
is heading even just
slightly higher…
which I do… do not
get me wrong…
my charitable trust
owns
BP plc (BP*)...
for
ActionAlertsPlus.com,
where I send all of
the profits to
charity at year end…
and I have a big
gain in the stock…
bulls make money,
bears make money,
pigs get slaughtered
discipline requires
me to ring the
register and scale
out into strength… I
do not want to send
cross signals…I
still like it… I
still think that BP
goes higher.
Here is the bottom
line…
▼ ▼
▼ ▼
▼
 The
Bottom Line!:
Ready… for safety,
we have to look
outside the United
States… and that
means owning the
stocks in my foreign
legion… companies
like
StatoilHydro ASA (STO)…
that are based in
healthier
countries.. with
Viking like
abilities… and I
ain’t talking about
those losers out of
Minnesota… that is
right, tonight I am
a proud honorary
Norseman screaming
to you Edward Munch
like… that Statoil
is the way to
diversify away from
the US… and get paid
a lot of dividends
in krones to do it.
[verbatim recap]
[end of segment]
Read Jim's next Segment
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