TheStreet.com's Jim Cramer says tons of stocks look like good buys, and they go down all the time.
All weekend I heard it. Stocks have gotten too cheap. Put 'em away cheap. Don't worry about 'em cheap. To which I say, stocks are only cheap if the companies make it. Stocks are only cheap if the bondholders don't claim them.
TheStreet.com's Jim Cramer says maybe the secret is to do no homework. If only that were the case.
If you want to participate in the rally that went on Tuesday I have a very specific suggestion: Don't do any homework. And don't listen to any conference calls. And don't pay any attention to the Q&As about credit and where it is going to come from and how quickly stretched balance sheets became because of all of the huge buybacks that were going on for so long.
Make sure you only follow Apple (NASDAQ: AAPL) (Cramer's Take), Google (NASDAQ: GOOG) (Cramer's Take) and Verizon (NYSE: VZ) (Cramer's Take) as they had great quarters. Don't listen to Occidental (NYSE: OXY) (Cramer's Take), where the always honest CFO Steve Chazen lays it all out, lays out how so many oil and gas operators will be broken by this decline and the lack of financing available. Don't listen to Whirlpool (NYSE: WHR) (Cramer's Take) where you would learn that the worst recession in appliances in three decades is now morphing into the worst ever, and GE (NYSE: GE) (Cramer's Take) is still trying to sell its appliance division.
While other earnings may have disappointed last week, the news was good for oil giant ConocoPhilips (NYSE: COP). In what some took as a good sign for big oil, the Houston-based company reported that third quarter net income surged 41% year over year to $3.39 per share, and that revenue also surged 52% to $70 billion. We'll see whether the good news extends to other petroleum giants scheduled to report quarterly results this week.
Analysts surveyed by Thomson Financial are looking for BP (NYSE: BP) profits to have grown 43.2% in the most recent quarter to $2.34 per share on revenue of $109.7 billion, and Chevron Corp. (NYSE: CVX) to post earnings up 39.4% to $3.25 per share on revenue of $86.8 billion. Marathon Oil Corp. (NYSE: MRO), ExxonMobil Corp. (NYSE: XOM), and Royal Dutch Shell (NYSE: RDS.A) likewise are expected to report higher net income of $2.33 per share (sales of $23.4 billion), $2.40 per share (sales of $131.4 billion), and $2.65 per share, respectively. Even Valero Energy Corp. (NYSE: VLO) is expected to post earnings slightly higher to $1.46 per share (sales of $36.4 billion), despite the effects of Hurricane Ike. Among these companies, only BP and Valero beat earnings expectations in the previous quarter. Not surprisingly, analysts on average recommend buying all except Valero, and shares of all of these companies have recently hit 52-week lows.
All my career, the sentiment indicators have worked. When you get anything near minus 10 on the oscillator, you have to be silly not to buy. When you get anything approximating 35% bulls on the Investors Intelligence survey, you have to buy.
We have almost double that negative on the oscillator and half as many bulls as that pathetic number.
Sentiment has become meaningless. It is incredible.
If we are going into a severe recession, some of the selling makes sense, but not all of it. As we pull back to 8500 on the Dow, we will be looking at stocks that are yielding 6% to 7% that are solid and can't be shaken. We will be finding stocks at prices that we will look back and think it was impossible to believe.
And then there will be another cohort where we will buy and then watch them go down again, because business is so soft.
I want to reiterate that the stock market for now is just plain broken. You can't have Occidental Petroleum (NYSE: OXY) down 15% like it is nothing. The company should be losing money with that kind of decline. Remember when I said on Monday that you can't have ExxonMobil (NYSE:XOM) ) go up 10 because it can go down 10 just as easily?
TheStreet.com's Jim Cramer says the companies could deliver money to shareholders without sacrificing growth.
What happens if the oil companies start actually recognizing their good fortune -- their sustainable good fortune -- and start boosting dividends the way that Tidewater (NYSE: TDW) (Cramer's Take) did last week with its 67% hike.
Throughout this great run with oil and gas, it seems that the companies themselves haven't caught up with the good fortune. They haven't spent that much on drilling relative to profits, and they have chosen to buy a lot of stock back, never bad. But what if they start returning the profits to shareholders in the form of dividends?
TheStreet.com's Jim Cramer says lots of companies now thrive with crude up here.
Oil's not a tax on everything -- it's a tax on the consumer. That's what I come down to when I see the charts this weekend and ponder what's happening in so much of industrial America.
Company after company that I examine -- the new techs, as I call them -- actually benefit from higher oil prices. Or they can pass them on with ease, because of the worldwide demand being so strong.
Take all of the companies involved with making a Boeing (NYSE: BA) (Cramer's Take): Boeing itself, Alcoa (NYSE: AA) (Cramer's Take), Honeywell (NYSE: HON) (Cramer's Take) and Precision Castparts (NYSE: PCP) (Cramer's Take) being good examples. Each of these is necessary because the new Dreamliner burns lots less fuel, and with fuel the biggest airline cost, it stands to reason that higher energy prices make the plane more desirable even at a higher price point.
The record run of oil, already up a gaudy 400% since 2000, continues, with prices breaking through $122 per barrel on Tuesday, May 6, 2008.
Meanwhile, gasoline prices, up about 20% in the past six months alone, and about 100% in the past four years, show few signs of moderating in the months ahead.
It's the era of high oil/energy prices, and until a readily-available, affordable energy substitute is found and/or oil prices decline, the oil / oil services sector will be in demand, which bodes well for Occidental Petroleum Corporation (NYSE: OXY).
It really shouldn't come as too much of a surprise that the company was able to rake in strong earnings considering just how high oil prices were during the fourth quarter. Occidental had been expected to show earnings this morning of $1.69 and surprised Wall Street with actual earnings of $1.74.
For the full year, the company posted its strongest ever yearly numbers. The full year profit came in at $5.4 billion, which is 28.9% higher than the $4.19 billion profit that the company realized in 2006.
Shares of were trading near record highs when ConocoPhillips (NYSE: COP) started off the new year by announcing that it expected fourth quarter production results to exceed those of the third quarter. But it was good news/bad news for the company this past week.
The good news: The Wall Steet Journal reported that Conoco was now the front-runner to participate in a multiyear, $10 billion project to develop the Shah natural-gas field in Abu Dhabi, beating out such rivals as Occidental Petroleum (NYSE: OXY) and Royal Dutch Shell (NYSE: RDS.A). Abu Dhabi National Oil Co. had been expected to name a partner for the project last year, and oil companies have become frustrated by the delays. Abu Dhabi is trying to meet rising demand for natural gas, which has surged with the building of gas-fired power stations and desalination plants.
The bad news: The company's donation of $5 million to a local cancer center apparently did not impress Alaska state officials sufficiently to allow Conoco to go forward with its nonconforming proposal for a natural gas pipeline project in that state's North Slope. Conoco's proposal had requested that state taxes be fixed on the project for decades, which prompted Governor Sarah Palin to send Conoco a rejection letter. The rejection left TransCanada Corp. (NYSE: TRP) as the sole finalist for the project.
Conoco shares have fallen 5.96% since the beginning of the year, and closed Friday at $83.04.
Akeena Solar, Inc. (NASDAQ: AKNS): A recent licensing deal is still pushing shares up. It hit 52-week high of $15.65 against period low of $2.97.
Teva Pharmaceutical Industries Ltd (NASDAQ: TEVA): TEVA recently got an FDA green light on new generic nausea drug. It's up to $49.08 from 52-week low of $30.81.
Superior Energy Services, Inc. (NYSE: SPN): Superior won a major contract to repair Gulf drill rigs. It jumped to $44.70 from 52-week low of $28.20.
Monsanto Company (NYSE: MON): Monsanto posted outstanding financial results. It traded up up to $123 from 52-week low of $49.10.
Occidental Petroleum Corporation (NYSE: OXY): The market is mad for energy stocks. This one climbed up to $80.93 from 52-week low of $42.06.
Douglas A. McIntyre is an editor at 247wallst.com.
Hess (NYSE: HES) closed at a record high of $104.40 Wednesday. WTI Crude futures are down 0.30% to $95.68 according to Bloomberg. HES overall option implied volatility of 46 is above its 26-week average of 38 according to Track Data, suggesting larger price risks.
Occidental Petroleum (NYSE: OXY) closed at record high of $78.06 Wednesday. OXY operates in two segments: oil-gas and chemicals. OXY has a market cap of $64 billion with long-term debt of $1.7 billion. OXY overall option implied volatility of 34 is near its 26-week average according to Track Data, suggesting non-directional price fluctuations.
Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
TheStreet.com's Jim Cramer says names in this group are now trading vehicles, not long-term investments, but that doesn't mean they're any less critical to own.
Here we are again in the weeklong pullback in oil where the stocks all get thrown out and no one wants to touch them. We will soon hear from the chartists (as I call technical analysts) that these stocks were unable to take out their highs, or they are getting the right -- and cold --shoulder.
Citigroup upgraded US Steel Corporation (NYSE: X) to Buy from Hold and raised their target to $118 to reflect operating catalysts and their expectations for domestic steel markets to improve in Q4 and 2008.
Cooper Companies Inc (NYSE: COO) was also upgraded to Buy from Hold at Citigroup despite the lowered guidance as they believe the company's products are improving and earnings upside is possible.
WestLB upgraded Continental AG (OTC: CTTAY) to Buy from Hold after the tire marker announced plans to reorganize its company structure into six divisions following the purchase of Siemens AG's (NYSE: SI) VDO automotive unit.
While other earnings may have disappointed last week, the news was good for oil giant 
All my career, the sentiment indicators have worked. When you get anything near minus 10 on the oscillator, you have to be silly not to buy. When you get anything approximating 35% bulls on the Investors Intelligence survey, you have to buy.
Oil and Gas giant 
Shares of were trading near record highs when 
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