Cramer: "Better Late Than Never"
Enviado: 12/4/2010 16:17"Better Late Than Never"
By Jim Cramer
RealMoney Columnist
4/12/2010 10:50 AM EDT
"Arch Coal (ACI - commentary - Trade Now), upgraded. Best Buy (BBY - commentary - Trade Now), upgraded. Alberto-Culver (ACV - commentary - Trade Now), upgraded. Ciena (CIEN - commentary - Trade Now), upgraded. Rockwell Collins (COL - commentary - Trade Now) upgraded. Heinz (HNZ - commentary - Trade Now), upgraded. Expedia (EXPE - commentary - Trade Now), upgraded. Continental Airlines (CAL - commentary - Trade Now), upgraded. Ingersoll-Rand (IR - commentary - Trade Now), upgraded. Texas Instruments (TXN - commentary - Trade Now), upgraded. Joy Global (JOYG - commentary - Trade Now), upgraded. Goodrich Corp. (GR - commentary - Trade Now), upgraded. Sara Lee (SLE - commentary - Trade Now) upgraded. Caterpillar (CAT - commentary - Trade Now), upgraded. Under Armour (UA - commentary - Trade Now), upgraded. St Jude (STJ - commentary - Trade Now), upgraded -- twice!
To which I say: "You have got to be kidding me." How can people have been so wrong? How could this many analysts have stay this negative, for this long, for these moves, for this rally? How could they all miss it, and in good conscience come in now? Hasn't this been the theme of the whole move? Now they come in and recommend? Now?
It is no secret that the analysts have missed the vast majority of this move. Now, they are all scrambling, and scrambling hard.
The classic example was Bank of America Merrill Lynch's upgrade of Ciena this morning. This wasn't an upgrade from a hold, wasn't an upgrade on a stock that had bottomed, or was near it. The upgrade comes at the stock's 52-week high, for heaven's sake.
What's truly amazing to me is that Ciena did a much panned acquisition of a key unit of a failed Nortel (NT - commentary - Trade Now) business and got slammed for it, with the stock taking a huge hit down to $10, from $14 at the time. Now, Bank of America Merrill says the merger is creating "a global optical powerhouse."
Good grief, couldn't it have said that at $11? Ciena's catching a wave of new capital-spending by the phone companies, particularly Verizon (VZ - commentary - Trade Now), but that's nothing new. These huge spending shifts were widely telegraphed and, again, were there for all to see. Now we discover the stock has potential for a 35% climb to $22!
The irony isn't lost on the analyst: "Over the past year, Ciena stock has appreciated about 80%. Yet this doesn't stop us from upgrading the stock."
I don't mean to single out this Ciena upgrade too much. Most of the upgrades that I have mentioned come at the top for these stocks -- at least for now. Nor do I mean to say these are wrong. If anything, I wholeheartedly agree with the upgrades, since these companies have made so many positive changes and done so much slimming down -- almost every company upgraded has -- that I believe the bottom lines are set to roar higher. And I don't care that there isn't a lot of top-line growth. When that comes, these stocks will all be so high that you will have to say you missed it. Waiting for top-line growth is like waiting for winners to be declared, and you don't go to the betting window after the race is over to place your bets (forgive me using a graphic gambling analogy to better elucidate the process).
I am simply saying that these analysts are following a wave that I expect to happen soon with the banks, which -- despite the endless chatter about second-mortgage loans and foreclosures hurting the bottom lines -- bottomed a long time ago because they trade on new loans that aren't going bad, and with the other aerospace plays, as that cycle kicks in, and the infrastructure stocks, as we see more and more orders, and the timber stocks, as we see housing starts bottom, and the broader tech components, as we see orders continuing to accelerate to accommodate new trends of voice and data (such as the iPad).
They are simply following a time-honored tradition, which we have seen so many times, that causes a second wave of average increases: the better-later-than-never upgrades. When we look back at this period, we will ask: What took us still higher after six sweeks straight of gains. The answer? Upgrades."
(in www.realmoney.com)
By Jim Cramer
RealMoney Columnist
4/12/2010 10:50 AM EDT
"Arch Coal (ACI - commentary - Trade Now), upgraded. Best Buy (BBY - commentary - Trade Now), upgraded. Alberto-Culver (ACV - commentary - Trade Now), upgraded. Ciena (CIEN - commentary - Trade Now), upgraded. Rockwell Collins (COL - commentary - Trade Now) upgraded. Heinz (HNZ - commentary - Trade Now), upgraded. Expedia (EXPE - commentary - Trade Now), upgraded. Continental Airlines (CAL - commentary - Trade Now), upgraded. Ingersoll-Rand (IR - commentary - Trade Now), upgraded. Texas Instruments (TXN - commentary - Trade Now), upgraded. Joy Global (JOYG - commentary - Trade Now), upgraded. Goodrich Corp. (GR - commentary - Trade Now), upgraded. Sara Lee (SLE - commentary - Trade Now) upgraded. Caterpillar (CAT - commentary - Trade Now), upgraded. Under Armour (UA - commentary - Trade Now), upgraded. St Jude (STJ - commentary - Trade Now), upgraded -- twice!
To which I say: "You have got to be kidding me." How can people have been so wrong? How could this many analysts have stay this negative, for this long, for these moves, for this rally? How could they all miss it, and in good conscience come in now? Hasn't this been the theme of the whole move? Now they come in and recommend? Now?
It is no secret that the analysts have missed the vast majority of this move. Now, they are all scrambling, and scrambling hard.
The classic example was Bank of America Merrill Lynch's upgrade of Ciena this morning. This wasn't an upgrade from a hold, wasn't an upgrade on a stock that had bottomed, or was near it. The upgrade comes at the stock's 52-week high, for heaven's sake.
What's truly amazing to me is that Ciena did a much panned acquisition of a key unit of a failed Nortel (NT - commentary - Trade Now) business and got slammed for it, with the stock taking a huge hit down to $10, from $14 at the time. Now, Bank of America Merrill says the merger is creating "a global optical powerhouse."
Good grief, couldn't it have said that at $11? Ciena's catching a wave of new capital-spending by the phone companies, particularly Verizon (VZ - commentary - Trade Now), but that's nothing new. These huge spending shifts were widely telegraphed and, again, were there for all to see. Now we discover the stock has potential for a 35% climb to $22!
The irony isn't lost on the analyst: "Over the past year, Ciena stock has appreciated about 80%. Yet this doesn't stop us from upgrading the stock."
I don't mean to single out this Ciena upgrade too much. Most of the upgrades that I have mentioned come at the top for these stocks -- at least for now. Nor do I mean to say these are wrong. If anything, I wholeheartedly agree with the upgrades, since these companies have made so many positive changes and done so much slimming down -- almost every company upgraded has -- that I believe the bottom lines are set to roar higher. And I don't care that there isn't a lot of top-line growth. When that comes, these stocks will all be so high that you will have to say you missed it. Waiting for top-line growth is like waiting for winners to be declared, and you don't go to the betting window after the race is over to place your bets (forgive me using a graphic gambling analogy to better elucidate the process).
I am simply saying that these analysts are following a wave that I expect to happen soon with the banks, which -- despite the endless chatter about second-mortgage loans and foreclosures hurting the bottom lines -- bottomed a long time ago because they trade on new loans that aren't going bad, and with the other aerospace plays, as that cycle kicks in, and the infrastructure stocks, as we see more and more orders, and the timber stocks, as we see housing starts bottom, and the broader tech components, as we see orders continuing to accelerate to accommodate new trends of voice and data (such as the iPad).
They are simply following a time-honored tradition, which we have seen so many times, that causes a second wave of average increases: the better-later-than-never upgrades. When we look back at this period, we will ask: What took us still higher after six sweeks straight of gains. The answer? Upgrades."
(in www.realmoney.com)