Stealth housing plays
Keep the derivative stocks in mind, not just obvious ones such as homebuilders.
The stealth housing plays are all the rage -- the derivative plays -- and they are a natural place to go in the second year of a move.
What do I mean by stealth plays? Take Radian Group (RDN). Here's one I am really pounding the table about because people simply don't realize how much money a mortgage insurer can make when they get it right. It is a very simple business when lending standards are stringent, and it has very little competition except for a not-as-hot lender, the Federal Housing Administration, which is busy cutting back its exposure because of less-than-lofty standard.
You have to focus on Radian because when you see action like we are seeing now, where a company can price a gigantic 34-million-share secondary at $8 and then take off immediately, that's an amazing sign. Keep in mind that when that happens, market players are attuned to the notion that the company's newfound cash comes with the ability to pay down debt, and that is incredibly additive. Remember, Radian's book of business is largely from the post-housing bubble and is much less susceptible to default than you think.
Or how about Axiall (AXLL), which makes PVC piping used in housing construction? This company, which resulted from the merger of Georgia Gulf and PPG Industries' (PPG) commodity chlor-alkali assets, has run tremendously, so much that when Credit Suisse rolled out coverage of the stock it had to do so as a Neutral because it is already up 35% year to date. Of course, it isn't just the housing angle here, as Axiall's products are just derivatives of natural gas and our country's become one of the lowest-cost producers of that feedstock. Still, I think the stock can run further.
How about Jarden (JAH)? The maker of home goods hit a 52-week high as it announced an accelerated buyback. It's been an immense winner, up 21% year to date, but it's viewed as a pent-up demand play.
Finally, there's Martin Marietta Materials (MLM), recommended by Goldman Sachs Thursday. It makes aggregates, crushed stone. That's what you need when you build new roads and housing complexes. Because it is only up 3%, people could find their way into it as a catch-up to the rest of the group.
- Also see: 'Mad Money' recap: follow the leaders
We know the obvious ones, homebuilders, can trade back up, and there are the kitchen, bath, lumber, appliance and flooring plays. But keep the stealths in mind, especially Radian. I believe they all have further to go and are ideal for when we have the next Italian-inspired bear raid or some other superfluous decline -- at least when it comes to housing.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.
More from TheStreet.com
IF the turnaround is actually occuring, buying manufacturers of durable consumer products sounds reasonable.
everyone knows i only read here, i don't invest in detail stocks yet.
"but if i did" i'd look up suppliers of everything in the home depot inventory.
they say "invest in what you know" which means i'd cull the list by deleting products i don't care about from the list. then locate WHO actually manufacturers or controls these products (because many are made in china).
i suspect TYCO shows up as a final owner of many of these detail suppliers. (TYCO stands for Take You Company Over and they did truly buy almost everyone)
The Sequester.....WILL NOT EFFECT....Any Soldiers or their Families...That is BOGUS...
Damn little chance that will effect ANYTHING they NEED in any CONFLICT AREA...
THAT IS ALSO BOGUS>>>AND A SCARE TACTIC...Don't buy all that BULLSHIDT or any...
Yes a lot of it, is "fluff";...The lay-offs would/could occur because of "future wages" or orders.
Mainly in the Military Industrial Machine Complex...
That covers Defense Dept workers and Corporations contracting to the same..
Other lay-offs might occur because of tax money returned to States, for different endeavors.
Teachers maybe cops, infrastructure and the like..
I really wonder....How many people know about or understand the Sequester ?
OR how it will effect them as Americans ??
There has been a lot of "confusing information" thrown about.
And is this once again, where the "squeaky wheel" gets the grease..??
"but if i did" i'd look up suppliers of everything in the home depot inventory...
As someone who has been tracking the shift back to American-Made, I have an alarming observation for you... it's not going to mean much as long as the same corporate platform structure remains intact. There's a structural integrity problem. Further, the younger workers aren't craft-oriented, we've lost that and need a complete divorce of job time and handheld device time. Finally, if we can't suppress and diffuse the influence of groups and lobbies, we've got nothing. You already know what they can do with all that legalese. Pray for a sudden insurgence of small businesses fortified by goon immunity.
Brutus-- the sequester sprayed Round-up on a dangerous weed we couldn't stop from growing. Did you expect immediate results or did you read the label? Cuts today will be readily seen on April 16th, the last day next month for a "late" payment designation. The 16th begins- "overdue." Have we heard anything at all about delinquency speeds? Nope. If we did, we'd be able to track the skidding from the cuts.
You guys been watching too many reruns of "Revolution.."
This ain't Greece and never will be...
Buy Twinkies, Bread and Beer...hmmm, we no longer have Twinkies and they are watering down the Beer....Oh, SHIDT..........It has started.
Yes they are taking/driving the "herd" down to the chutes and loading them on the trains...
The old legends, that the old cows passed around...Was the youngin's were being taken up North for the "better grazing lands." hmmmmmm??
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The offering could become the second-biggest this year if underwriters exercise an option to buy more shares.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.