Alcoa (AA) -- Cramer clearly unmarried this trade which he liked earlier in the year, stating that Alcoa had a "weak quarter" and "may not make money" going forward. He thinks that the stock is "dead money" and that "estimates are way too high." Alcoa is clearly a cyclical enterprise who's fate is tied to the ups and downs of not only the aluminum and base metal market but also the demand side stemming from macro-economic trends and pressures out of China. While Alcoa does look quite cheap at first glance with a PE of just 9.4X and forward PE in the 9X range, the discount to book value does not leave investors with much of a margin of safety because much of Alcoa's book value is in the form of intangible assets like Goodwill (Spanish for brand value) which should be excluded from liquidation value by the astute equity analyst. While Alcoa does look cheap, remember that in recessions and contractions these cyclical names tend to get clobbered. Recently, Cramer has become a little more bullish on Alcoa, but still thinks the quarter will be ugly.http://seekingalpha.com/article/315724-5-stocks-cramer-says-to-sell?source=yahoo
Cramer is a schizophrenic, drooling lunatic who should run for political office, having mastered the self serving flip flop for nearly twenty years. A dart board would provide better guidance, at least you'd have a shot at making the dart go where you want it to.
A 2006 analysis of his picks puts him at 46% correct. That's worse than a coin flip.
You might as well use the 3 Stooges to guide your investment.