On tonight’s MAD MONEY on CNBC, Jim Cramer discussed the ramifications of Iran if things get worse. Cramer laid out a "what to do" plan IF you wake up one morning and the headlines are horrible about escalations. He has 4 things for an "Iran Gone Awry" strategy just in case something goes nuts over there:
The first thing you want is a drug company and he likes Abbott Labs (ABT-NYSE) because the drug companies don’t need a strong economy. This one is more immune to oth other drug company problems because it is at highs. He doesn’t like Pfizer (PFE-NYSE), Merck (MRK-NYSE), or Bristol-Myers (BMY-NYSE). Cramer said its 16 P/E and 14% growth rate make it cheap and they sold off 2 units. He likes its Humira drug as a multi-purpose drug and its stent looks like it may be the best out there.
You also want a company tied to oil, and he wants one that won’t get hurt if we get cut off of Middle East oil: Kinder Morgan Energy Partners (KMP-NYSE), but he warns you not to buy the wrong Kinder Morgan. This one is a safer high-yield one to Cramer. It transports via its pipelines and transfers other commodities besides oil and gas.
The other area is gold: Yamana Gold (AUY-NYSE) is his pick. He’s been there talking this one up over and over and it has doubled since he called it, but he thinks it is still improving and is the best gold stock out there. On February 11 it opened a new gold mine and it is basically free gold because the copper operations at the same mine are making the gold free. This one trades at 11-times earnings and it has many more operations that may come on line soon. Cramer said the company will either buy more gold companies OR will be open to a consolidation itself.
His last pick for the "top four" is actually Cash, not a stock. He says this will allow you to gobble up the battered stocks after a crisis if it even came. He wants you to be in the highest yielding cash accounts out there.
Oddly enough, not one of his four picks was in a war stock (defense stock). There wasn’t even a food, water, booze or tobacco pick. Hmmmm………
In a call-in, Cramer defended Ceradyne (CRDN-NASDAQ) as one that isn’t a one-hit wonder; and he thinks the shorts and bears are wrong. In another call-in, Cramer said that Halliburton (HAL-NYSE) will not suffer issues from the old KBR (KBR-NYSE) investigations. In another call-in, on SAIC (SAI-NYSE) Cramer said he is a bit worried because many cutbacks are in the consulting side where they are strong.
Jon C. Ogg
April 2, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
Top Gaining Stocks
Top Losing Stocks