Cramer on BloggingStocks: Europe is starting to eye U.S. gems

Posted May 8th 2008 9:00AM by Jim Cramer
Filed under: Deals, Market Matters, Allergan (AGN), Citigroup Inc. (C), Sprint Nextel Corp (S), Unilever ADR (UL), Stocks to Buy, Cramer on BloggingStocks

TheStreet.com's Jim Cramer says the exchange rate plus massive undervaluations make the great brands prime targets.

There's always been a groupthink in Europe about currencies. The companies that want to buy American companies have, at times, seemed to care more about the currency, or at least not buying a company in a country whose currency is in decline, than they care about the actual target.

That's what it looks like now that a large German company and now a large Italian company have decided to start splurging. It is no coincidence that Deutsche Tel (NYSE: DT) (Cramer's Take) and Finmeccanica are exploring Sprint (NYSE: S) (Cramer's Take) and DRS (NYSE: DRS) (Cramer's Take). These companies are selling for something like 40% off for those bearing euros, and neither potential acquirer has debt problems or subprime issues, so the deals don't have big borrowing problems.

That's what I am thinking about when I see the better-than-expected figures today from Unilever (NYSE: UL) (Cramer's Take) and the other day from Nestle. These companies are part of that same groupthink. They are looking, no doubt, at a Heinz (NYSE: HNZ) (Cramer's Take) and thinking, "Wait, that's about a $10 billion company that's a global leader."

Or how about Allergan (NYSE: AGN) (Cramer's Take)? That was a $20 billion company that is down to $16 billion in dollars and about $12 billion as a translation to euros.

These are just too cheap for these companies to ignore, and much more of a healthy franchise than Sprint and a more important franchise than DRS.

We are all possessed right now with the "imminent" catastrophe of someone -- Citi (NYSE: C) (Cramer's Take), Cerberus, ResMed (NYSE: RMD) (Cramer's Take)? Somebody.

And those worries have continued to put a lid on many of our valuations. That, plus the subtle part of the slowdown -- botox use not accelerating that fast and breast augmentation slowing down in the U.S., as Allergan said to me last night on "Mad Money" -- makes people too nervous about some solid, non-financial situations.

Yesterday was really ugly. But this market doesn't have much of a memory. Go back over the franchises with great brands that have been crushed both here in stock and there in currency.

These are no longer going to be needles in a haystack.

Random musings: Like Quanta (NYSE: PWR) (Cramer's Take), a sleeper that I liked for utilities, Willbros (NYSE: WG) (Cramer's Take) -- a company that I was harping on as way too cheap and brought the CEO on "Mad Money" to bolster my case -- finally delivered the blowout I was looking for. I can understand anyone's desire to take profits on PWR or WG if you bought them at my direction, but these are really just "first good quarter" stocks, and I believe there is more ahead.

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.

Tags: agn, allergan, c, citigroup, deutsche telekom, DeutscheTelekom, drs, dt, featured, heinz, hnz, jim cramer, JimCramer, resmed, rmd, s, spint nextel, SpintNextel, ul, unilever, wg, willbros

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Reader Comments (Page 2 of 2)

5-09-2008 @ 12:18PM

Steve Gee said...

Heinz is a screaming steal! Only a 12 billion cap! If Cramer believes it will be swooped up by some European giant like Nestle or Unilever then I can see the projected price going for at least $60 a share. A great American company, but for the price, going, going, gone.

5-09-2008 @ 3:36PM

ibetudontknow said...

You think this is bad? Look what else is going on with our food....
MONSANTO, CARGILL, & ADM RAKE IN BILLIONS ON WORLD FOOD CRISIS
Monsanto, Cargill, and Archer Daniels Midland are making a mint off corn and soy-based biofuels, while rapidly monopolizing the market, and hoarding future reserves of crop seeds and germplasm, wheat, rice, soy, corn, and other grains. While a billion people go hungry, and food riots threaten global stability, these Biotech and Food Giants are raking in record profits, along with Wall Street speculators, who have shifted their greed from sub-prime mortgages to increasingly scarce natural resources and food.
Learn more: http://www.organicconsumers.org/articles/article_12088.cfm http://www.organicconsumers.org/articles/article_12039.cfm

__________________________________

5-09-2008 @ 12:35PM

Mel Strickland said...

We asked for it! God blessed this nation beyond
any nation in history. To show our appreciation,
we kicked Him out of our schools, our government
and finally, most of our churches, So He left and
took His blessings, His jobs and His Spirit and gave
them to others. (see II Chronicles, 7:14) If we do
not turn back to God, America is doomed.

J.Stone

5-09-2008 @ 12:50PM

dann said...

Moving to a condo, just sold my large Oriental rugs to a European buyer. Guess where those rugs came from - my Grandparents bought them off the floors of a once wealthy German family in the 1930's. It's their turn again! And, they have seen the ups and downs 6 or 8 times in the last century. Just hold on, tides always turn.

5-09-2008 @ 12:53PM

Rick Johnson said...

Heinz, I'm sure, would not relish having to catch up with times. Would this this leave their employees in a pickle? Peas advise.................

5-09-2008 @ 1:28PM

Fed UP said...

What everybody doesn't realize is, that what is going on right now in regards to the fall of the dollar, and our country's (bridges, tollroads, land, churches...turned into Mosques, parks, water- bodies,etc...all being bought up by foreign countries)decline... is EXACTLY what the politically elite- crooks WANT! This isn't happening because they have been naive or neglectful.. ..it is happening because they want an exact replica of the EU. In order for them to create that...they have to demolish this country's sovreignty! We will see the dollar crash before long and they will introduce us to the "Amero"... the Amero will then compete with the Euro! We will merge with Mexico and Canada... an we will become the "North American Union"..or the NAU....the NAU will then compete with the EU. I was blogging and complaining about this along time ago... and everybody thought I, and others, were crazy..... but now the Chickens ARE truly coming home to Roost... we always react to things when it is rto late to do anything about it. If you still have trouble believing this... plug in the Amero and the NAU and you will learn what Canada and Mexico already know! Our problem is that we have always been coddled and shielded (by our media mainly) and can't accept the fact that Huge changes are a coming!! None of the present candidates are going to fight for our rights.... WE would have to do that!

5-10-2008 @ 10:49AM

joe said...

Bobby 8:20 am was replying to Alex.
To Bobby. I grew up in a town in PA. near Pittsburgh. Everyone worked in the steel industry, friends, relitives, ect. It was a good strong small industrial town. We even had a Harley Davidson dealer in our small town. Now The Harley shop is gone and so is US Steel. The big employer of just about everyone I knew. If you were to visit the small town I grew up in, Mckeesport Pa. you would understand what Alex want people like you to know. Alex is stating a fact. Alex I have seen this decline for 30 years. Big business leaving the US forever. BUY AMERICAN people.
BUY AMERICAN!

5-09-2008 @ 2:15PM

greg vernon said...

reply to vicky's comment ;by no means is a 50 or 60 thousand a year job LAVISH LIFESTYLE A PERSON HAS TO MAKE AT LEAST 20 AN HOUR JUST TO PAY THE BILLS

5-09-2008 @ 2:25PM

Mark said...

GOD I hope the ketchup company is Heinz...... maybe Kerry will go with his wife........ and we here in Massachusetts will be rid of him for good.

5-09-2008 @ 3:19PM

Chuck in FL said...

We are trying hard to become a quaint place to visit for the wealthy foreign tourists. Depending on your climate, you may qualify for a govt. subsidy for half a year. The other half year you can make nice to tourists and hope for good tips.
Since FL is always nice, we will be victims of the change because we will have to work year-round. I must speak to Obama about that - we need a voice.

5-09-2008 @ 3:30PM

Chuck in FL said...

Dann with the oriental rugs: Were your grandparents Nazis enjoying the spoils of political power in the 1930's? Hope those rugs are back in the hands of a Jewish family, maybe relatives of the victims - stranger things have happened. or as you said, "...tides always turn".