Activists keep a flame under this market

They're inspiring companies to make moves that attract investors.

By Jim Cramer Jan 29, 2013 10:21AM

thestreet logoCEO Digital Vision Getty ImagesThey keep doing things to make the market go higher, "they" meaning activists and active managements that are tired of seeing their stocks flatline.

We have been saying for some time on "Mad Money" and here that Hess (HES) needs to break up and separate that nasty refining business in order to bring out the value of its fantastic exploration-and-production assets.

We know that an activist, Elliott Associates, has been agitating for change, wants to be bigger and said it might want to nominate candidates for the board.

In what looks to be a preemptive move, Hess took the action that should please everyone except those who believe that the whole company should be put up for sale.

Or how about Waste Management (WM). The stock has been a dog, although it has paid you to wait. This morning, Credit Suisse points out that the company should convert to a real estate investment trust, something we have seen with less traditional companies of late, including American Tower (AMT) and Weyerhaeuser (WY). We don't know if Waste Management will go through with it, but the prospects, judging by the increase today, sure are tempting.


Or Sanford Bernstein pointing out today that American International Group's (AIG) management is anxious to narrow the gap between the book value, which is almost twice what the stock is worth, and the current price.


Or Carl Icahn agitating for a big dividend from Transocean (RIG), which does have the capacity to give you one. He takes 5.61% and then urges a $4 dividend, which is something that would attract real buyers.

Or, let's just call it as it is. Salesforce.com (CRM) issues a proxy to put forward a 4-for-1 split, and the retail investor who has been handicapped by the high dollar price of, say Netflix (NFLX) or Amazon (AMZN) or Google (GOOG) or Apple (AAPL), gets excited and does some buying, even as we know that this is a fatuous reason to buy anything.

It is, after all, the same company before and after the split, so there's nothing that moves the needle except the animal spirits that a split attracts.

Companies are doing things to attract investors. Activist investors are doing things to inspire companies. It all makes sense, and it is happening right now.

 

cramer's face

 


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 is long AIG and AAPL.

 

 

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42Comments
Jan 29, 2013 10:36AM
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The only activist I see is Helicopter Ben printing money like it is going out of style. The market will move higher till the printing stops, then everyone will head for the exits at the same time.

Imagine if interest rates were normal 4-6%.   The Fed would be paying 850 billion in interest on 16.5 billion in debt or 130 billion more than the entire Defense budget.   Interest rates need to near zero, like in Japan, otherwise the whole economy will collapse from our run away debt.

Imagine what it will be like in 4 years with debt exceeding 21 trillion....  Interest will exceed 25% of the budget...  This will not end well...
Jan 29, 2013 1:06PM
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I'm a firm believer in stocks....  I have warned people about the beatings they will take being in Cash, CD's and Bonds... I like Foreign stocks better than US stocks.  I like Specie (and guns/ammo) most of America seems to agree...

The liberals are stupid though if they believe they have made a whole lot of money over the last 4 years...  Sure the market is up 72%.  But he printing press has created 58% more dollars.   Factor out the inflation and you have a 14% gain before taxes over 4 years...  Lets call it 11.2% or under 3% a year...   You would have a far greater return in Gold, Silver, Oil...  or a host of foreign currencies...

But the US market will move higher as long as Ben is running the presses.  People should put cash there, to protect themselves against democrat policies...

Jan 29, 2013 11:10AM
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Bulls are best slaughtered when they least see it coming.  If they see it coming, a surge of adrenaline spreads through the meat and ruins it.  So with this in mind, let's let the bulls run, ignorant and happy, and they can fatten up even more before we blindside them and make a killing off their carcasses.

The Euro is still moving in lockstep with US stocks.  Today's play is long on the Euro against the dollar, and short stocks as a hedge.  Leverage up and sit tight, don't chase the money, close out before the end of the day and "don't count your money, while you're sitting at the table, there'll be time enough for counting, when the dealing's done."

Jan 29, 2013 12:21PM
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I actually love this market right now. The banks are getting just what they deserved. Maybe there is something to that Karma. Their hedge against the inflation that was intended for regular US citizens is all in the market. That is where the inflation exists. They can't do anything with it unless a rush of investors take them off their position at these prices. Volume is down....... Trust is down.... and all the time Boomers are doing well on their 401Ks as they retire.

 

 

Jan 29, 2013 12:04PM
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Who are you talking about, Jim? We've got markets stuffed full of cardboard cut-out platforms that aren't real businesses at all. They play all day in the markets. Nobody holds a fool over the fire, he isn't worth it. Bernanke printed us into bust. ALL of that went into the markets. If you are in the markets you are killing America. That makes you a Terrorist. Ergo-- Activists aren't in the markets, they are in the sub-economy. Deadbeats are in the markets. As for holding somebody's feet in the fire... 100 million families in America are impoverished from financial tyranny and terrorism. The only ones holding feet to the fire are parents, holding their children close to barrel fires because it's winter in many many ways.
Jan 29, 2013 1:04PM
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I donno....Activist or investors, people can believe what they want...To work or play in the Markets is a person's choice...

I realize there is little Trust in the Markets at this time..

And judging by some of the comments read here, and heard on the street...;

There is little Trust in our Government and other Entities involved...

Not trying to be the eternal optimist...I do realize we still have some problems...

Situations are getting better except for maybe debt, and our Countries Valuation..?

But the the perpetual doom & gloom accomplishes little, so I don't want to be dragged down..

Do what you have to do....And let's hope or make it come out better..

Doing nothing, and the blame will land squarely on your shoulders.

 

Jan 29, 2013 10:35AM
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a fishing luer only has to catch a fisherman.  so also with stock price manipulation
Jan 29, 2013 4:06PM
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I'm Guessing into some that Analysts and Article writers are pointing out...

 

Just be careful, some are Bear traps and some are Bull shidt..Or maybe a Rider; Takes research..

 

Solid Companies and good dividends are a place to look...

But any dividends above 6-7% can come down quickly in stock price...Depending on Economy.

Many REITS are looking pretty decent for the time being...But there are good and bad...

Depends on their Outlays..

I was selling some the last couple days...Going to something, I consider better...

And I have added a little Goldminers on the cheap..adding more..

Also added a little Ford this A.M.....Doing some DCAverageing.

Jan 29, 2013 2:32PM
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Hell I've been buying and selling the last few days...We might be hit by a correction.....?

But we can live with that..

Dollar costing down...

And selling some after dividends....That have been stagnating...Or not performing great.

 

Keep that money rolling....

Keep that money rolling....

Rawhide..

Mooooooooooooooooooooooooooo !!

Jan 29, 2013 1:46PM
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Seriously Cramer ??? Activists ??? You are like the Pot calling the Kettle Black !!!  Value is is either there or it is not ! Give me a break dude !
Jan 29, 2013 2:51PM
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I admit I'm short some blue chip consumerables but they are just sitting there.  After a month and all this excitement I'm down only a tad.  Where is all this new money going?  Are the laggards sucking it up? They always seem to rise after the multiples of the solid Dow stocks get a little pricey. Is this what we are seeing?
Jan 29, 2013 10:53AM
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Maybe Activist, and Active Pro Traders....Are all we have ???
Jan 29, 2013 10:46AM
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I guess having seen this so many times I should just relax and enjoy it.  But it just never sits well when we get so far out of balance and those of us who see where this is going just get tired of preaching to the young crowd.  So get it on, believe everything you are told, and spend spend spend!  Everything will be just fine no worries, just make sure you don't miss out!  Massive new moves going on behind the scenes are not important, those are just the naysayers. Me thinks liberals are the longs and conservatives are now the shorts.  Libs always lose because that is when they feel most comfortable.  Now that is market sentiment from a cynical old man.
Jan 29, 2013 12:42PM
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Almost 14,000 again !!!! GOOD,we all know what happened last time the market blew up like a balloon (full of hot air) it goes P O P ! ! ! !The higher up you go,the farther down you have to fall ! 
Jan 29, 2013 11:45AM
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By "activists' he means a long line of agitators and self interested moneygrubbers like icahn ..........cramer is trying to tell us they are good for all of us but all they want to do is line their own pockets much like the "greenmailers" of old....

Wall Street was envisaged to create capital to allow business to grow and create .....over the years this nest if vipers has grown with it like a tick and their only goal is to feed off the masses money .....they create nothing but the more money they get the more power they have.

The system is broken and will remain so as long as we allow these bloodsuckers to flourish (cramer included) ....
Jan 29, 2013 11:08AM
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This market reminds me of that Obama supporter screaming for her Obama phone.  Wall Street responding to federal candy and if they don't get their candy they complain.  We have a pervasive mentality in this market that all is well and making something off someone elses labor is how it should be.  Bankers used to wear suits from Pennys, always looking over their shoulders for the next tripwire.  They were conservative adults who were most similar to your grandfather looking out for you. But not now with the Armani suits and the confidence game we have a total new breed and mindset.  The "value" of the stock seems to almost instantly capture the board room.  At the slightest chance to return to the nineties stock appreciation the greed for "me" mentality reappears. 
Jan 29, 2013 11:50AM
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US guberment spending, printing, pi$$ing into the wind 1.5 trillion cheap worthless dollars per year over what is "paid" in.  That is $4500 for every man, woman, and child in this country.  To buy stuff from overseas markets where their citizens benefit and our tax base is decimated, we are pummeled with unemployment,  and our future looks grimmer by the month.  I sometimes wonder who these electerds in DC are actually looking out for.  If you travel to any foriegn country you see that 90% of wealth belongs to 10% of the citizens and that is where this is headed at a harrowing speed.  And as the income of most Americans declines and the Arbitrage of these Asian economies depresses our wages and lifestyles does anyone really believe we are on a path to Milk and Honey. But then again that thinking involves a little more than the next twenty minutes.
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Things are going to collaspe this year even the Chinese are warning about Buzz Bernanke and his "print monies to infinity and beyond" monetary policy.

 

The Buck will not stop at Truman's desk the buck will simply stop being important in world trade. Already 90 percent of the world is trading in yuan and not dollars. The dollar has hardly any life ledt in it.

 

Quote

 

A senior Chinese official said on Friday that the United States should cut back on printing money to stimulate its if the world is to have confidence in the dollar.

Asked whether he was worried about the dollar, the chairman of China's sovereign wealth fund, the Investment Corporation, Jin Liqun, told the World Economic Forum in Davos: "I am a little bit worried."

Jin said he was confident that the Obama administration and Congress would ultimately solve the debate over the so-called fiscal cliff, "but of course the printing machine will have to slow down for people to have full confidence in the dollar".

is the biggest purchaser of U.S. Treasury bonds, using its enormous foreign currency reserves primarily to buy U.S. securities as a long-term investment.

"There will be no winners in currency wars. But it is important for a central bank that the money goes to the right place," Li said.

 

End Quote

Jan 29, 2013 11:23AM
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Nice to see a positive article.I`ve made a lot of money off Cramer`s picks.In just a few

years mastercard and visa are up 10 fold.Instead of the bears always being bearish

they should stop wasting their time and find the next hot stocks.

Jan 29, 2013 11:32AM
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Republicans always say they want low taxes because they know it`s a cheap way to get votes

without doing anything because they`re lazy.The far right falls hook, line and sinker for that.

It`s like giving kids candy instead of cooking a meal and then watching the kids be on a

sugar high.

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