Top Stocks

By Jim Cramer, TheStreet

 

Deere (DE) is as about important as it gets for this market. Deere is ag; it is road construction; it is lawn gear.

Deere is American industry, and the company's numbers support my new theory that we are in some sort of boom, which has been aided by some brilliant management by CEOs who will not only end all talk of double-dip but who will eventually cause all of those correction-callers to realize that they have to get in on this market.

 

Deere is a conservative company that has been missing conservative guidance for almost two years now. It is well run and was thought to be running lean, but it turned out that it wasn't as lean as it had to be.

 

After a decade of growth and two consecutive years of record-breaking grosses, sales of video games -- which at first seemed immune to the Great Recession -- are finally falling.

More like avalanching, actually.

A host of advances and all-new revenue streams are on the horizon, some coming as early as this year, that industry insiders hope could turn things around.

But the beginning of 2010 delivered the industry a body blow of economic reality.

 

At the start of the year, I launched a new portfolio of top stocks for the year, on a new site, in an attempt to help the average investor out on Main Street make money.

 

So far, the year is off to a rough start. Even after a huge rally today, the S&P 500 is down more than 1% this year. How are my top stocks doing?

 

Though three of the 10 are down, in aggregate they are up an astounding 9% since the beginning of the year.

 

Why? Yes, partly it is simply great stock picks.

 

Norway's Yara International (YARIY), already the biggest publicly-listed fertilizer maker in the world, just bought itself a big hunk of the North American market.

Yara agreed Monday to buy Terra Industries (TRA) for $4.1 billion -- in cash. Terra had been the object of a hostile bid from CF Industries Holdings (CF) that had valued the company at $3.88 billion.

The price certainly can't be called cheap -- Yara is paying a 24% premium to the Feb. 12 price for Terra -- and there aren't a lot of synergies in the deal, as Yara has pegged post-acquisition cost savings at just $60 million in the first year.

 

When I begin to search for new stocks, I always begin the same way, using Barchart to run a list of the stocks having recent price appreciation and then sorting for the stocks that have had the most frequent price appreciations in the last 20 trading sessions. I then run through a sorting process to weed the list down further. My pick for today is Tyson Foods Inc (TSN).

I'll go into the reasons in a moment.  

The unemployment rate has passed 10%, and some indications show it may stay that way -- or drop just slightly -- for the next four years.

It's hard to fathom the impact of that statistic on Americans. Certainly we haven't lived with that level of unemployment for decades. But the Atlantic describes it as nothing less than a nightmare, a horrific and long-lasting disaster:

It could change the nature of modern marriage, and also cripple marriage as an institution in many communities. It may already be plunging many inner cities into a kind of despair and dysfunction not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years.

The economy is expanding again,  

By Dan Freed, TheStreet

 

Though many people -- even some non-bankers -- are tired of what they see as 18 months of attacks on banks by Congress, regulators and the public, there is plenty of evidence to suggest we are just getting started.

 

While the New York Times went over well-trodden ground earlier this month with an investigation into Goldman Sachs' (GS) role in the meltdown of AIG (AIG), the newspaper appears to have done more damage with a newer inquiry: the role of Goldman in the current Greek debt crisis.

 

It seems Goldman helped Greece mask its debt from European regulators through certain sophisticated derivatives transactions, the Times reported on Saturday. The article noted that JPMorgan Chase (JPM) performed similar wizardry on the books of the Italian government. The Financial Times followed up Monday, reporting that The New York Times article was prompting an investigation by European Union authorities into the Greek transaction. An additional follow-up by Times' columnist Floyd Norris compared the deals to one involving Enron that came to light several years ago.

 

 

Since stocks hit bottom on February 5, there has been a noticeable performance differential between the small caps in the Russell 2000 and the mega caps in the Dow. Over the last seven trading days, the Russell 2000 (RUT) has gained 6% while the Dow Jones Industrial Average (INDU) has gained just 3.7%. This is what leadership looks like.

 

Such behavior reflects a rise in investors risk appetites and suggests a strong rebound rally is just getting started.  Similar periods of relative small cap strength, following periods of small cap underperformance, has marked important turning points since the March 2009 low. It happened back in December. It happened in September. It happened in July. It happened in May. And it's happening now.

 

We're seeing similar leadership from technology stocks; specifically, by semiconductor stocks like Entegris (ENTG) and SMART Modular Technologies (SMOD) which gained 14% and 15% last week respectively and are up 6.8% and 5.5% during Monday trading. Looking back, relative outperformance by semiconductors against the S&P 500 has marked the most important market moves over the last 18 months. By most important, I mean moves to new highs.

 

All of this suggests that savvy Wall Street insiders are preparing for a move higher by positioning themselves in the stocks and sectors with the most leverage.

 

By Jeanine Poggi, TheStreet

 

Lowering prices is risky for any luxury retailer. While shoppers love discounts, investors fear bargains could dilute brands. Coach (COH) has managed to appease both sides.

 

Coach CEO Lew Frankfort lowered entry-level prices 15%, a move that helped the company weather the economic downturn.

 

But let's be clear about one thing: Coach doesn’t call this a sale. Frankfort, in an exclusive interview with TheStreet, was adamant about this. There are no blaring signs in store windows drawing attention to lower prices, no advertisements highlighting value merchandise. Instead, Coach has been trying to surprise consumers who pick up bags they expect to be $500 and see they’re $200.

 

A number of large marketers like Pepsi (PEP) have stayed away from the Winter Olympic games. Nielsen numbers showed Saturday viewership was as high as 27 million households on the NBC network, while 32 million people watched the opening ceremony.

Some of the most popular programming, like hockey and downhill skiing, is still to come. In other words, Pepsi may have made a mistake.

USA Today reported that NBC may dodge the fate that most experts expected for the network. Early reports were that the General Electric (GE) division could lose tens of millions of dollars on the $820 million investment it made in the games. It now appears that the network has a chance to break even.

 

By Jim Cramer, TheStreet

 

Every time I think that I am being too optimistic about the Marcellus Shale, I get shocked into discovering there is much more natural gas in the play than I thought and much more value than anyone realizes.

 

This morning's announcement that Mitsui (MITSY) will pay $1.4 billion for a third of Anadarko's (APC) Marcellus' assets is breathtaking both in its surprise value -- another new player with lots of cash coming in -- and its price tag given that Anadarko is not a huge player in the Marcellus.

 

I just had Range Resources (RRC) on last week, the first and biggest player in Marcellus, and this new valuation makes me think that RRC, which is regarded as overvalued by some analysts because of its premium valuation to the big established Barnett players (thought to be the highest-grade shale deposit, and one that Range and Anadarko have stakes in) is actually cheap.

 

 

When Verizon (VZ) reported fourth-quarter earnings on Jan. 26, there were no real surprises. And that was disappointing to investors who were looking for signs that a rising economy was lifting margins in Verizon's legacy landline business or who were hoping for some sign that Apple (AAPL) was going to strike a deal with Verizon to sell the iPhone.

Didn't happen.

So, investors are stuck with the same old story -- which fortunately is pretty good despite its lack of surprises.

 

 

If history is any guide, this isn't a week to make money in the market.

The Bespoke Investment Group went back nearly 40 years analyzing the market's performance in the shortened President's Day work week. As it turns out, the S&P 500 declines an average of 0.20% for the week.

Normally, the market gains 0.12% to 0.15% in a work week, so a 0.20% drop is bad, Bespoke reports. 

Can the housing market stand on its own, without any government assistance?

We may get the answer to that question soon, as many of the emergency programs propping up the market come to an end. Many people think the answer will be a resounding no, reports The New York Times.

In the last year, the government has given a tax credit to first-time homeowners and kept mortgage rates low. And the Federal Housing Administration backed low-money-down loans that many banks turn up their noses at, helping homebuyers without other options.

But even with those tools, look at what's happened: