Sun, May 27, 2012, 3:53 PM EDT - U.S. Markets closed

Jim Cramer's "Mad Money"

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GTAT4.300.24

Jim Cramer said, "Even the best of the best companies can get too expensive." And that's exactly what happened to Chipotle Mexican Grill (CMG) as the stock's multiple approached two-and-a-half times its growth rate. Chipotle's stock soared up $10 a share Tuesday, only to come crashing back down to close down almost $3 a share, trading over $330 a share. Cramer noted that Chipotle is certainly better than a company like Netflix (NFLX), which is seemingly imploding, but he reminded viewers that even great stocks can get ahead of themselves, and it's better to take profits while you have them. Cramer's advise to investors: let Chipotle cool down some before buying back in. EXECUTIVE DECISION: Cramer once again sat down with David Crane, president and CEO of NRG Energy (NRG), a company Cramer called one of the most forward-thinking utility companies on the planet. NRG is committed to buying back its stock at these low levels. Cramer said that he's still a fan of NRG, even without paying a dividend. Continuing his "Time For Tech" series, Cramer highlighted Avnet (AVT), a component supplier that serves as the supermarket for tech, supplying over 100,000 customers. Cramer said Avnet has always been his gauge for the health of the overall tech sector, which is why he was pleased to see the stock rally 9% over the past nine days, a signal that the slow summer season for tech is now behind us. He said at these levels, Avnet has little downside risk and huge potential. OFF THE CHARTS: Cramer and colleague Richard Ross went over the overall health of the markets. According to Ross, there are several charts signaling an impeding bearish move in the markets. The first of which was the U.S. dollar, which Ross feels is gearing up for a major rally after trading sideways since April. Ross also sees the Euro breaking down, with its chart signaling that the currency could head sharply lower towards its 2010 lows. He saw a negative outlook for copper as well. Finally, Ross noted that even gold is signaling a bearish trend, one that could spell trouble for the precious metal. Cramer, on the other hand, said he's not as pessimistic on the market's outlook, especially when it comes to gold. Cramer said that everything doesn't crash at once, and while it may be true that the U.S. dollar and the Euro may be heading in the direction, sending copper with it, it's unlikely that gold will follow. Cramer once again made the case that gold is the asset class that investors turn to when things go bad. NO HUDDLE OFFESENE: Cramer said that the recent moves in oil and the oil service stocks are illogical, stupid and unprofitable. Cramer said simply that the price of Brent crude is simply too high and it should have reacted to the global slowdown a long time ago. But that doesn't mean that the price of oil service stocks should be heading lower, said Cramer. He said the need to drill more oil and gas is extraordinary, and companies like Range Resources (RRC) and others should be heading higher as they are indeed likely takeover targets. LIGHTNING ROUND (Bullish) AA; XCO; CTL. (Bearish) GTAT, HCBK.

 

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