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IMPORTANT NOTE – This show originally aired on June 30, 2005

Jim Cramer described strategies for profiting on aging Baby Boomers. He recommended companies that develop drugs for hypertension, lasers for surgery and orthopedic implants, and discussed plays in assisted living, casinos and insurance.

Hypertension, Erectile Dysfunction and Osteoporosis – Bullish – GlaxoSmithKline (GSK), Bristol-Myers (BMY), Pfizer (PFE), Eli Lilly (LLY) and Merck (MRK).

Cholesterol – Bullish – Schering-Plough (SGP), which sells Vytorin, “makes a lot of sense” around $20.

Hospitals – Bearish – “Government and labor make HCA (HCA) too difficult to recommend.”

Generic-drug makers – Bearish – Sell! Sell! Sell! “I think those stocks are dangerous.”

Boomer Vanity – Bullish – Consider companies that make lasers for cosmetic surgery, like Syneron (ELOS), Cutera (CUTR) and Laserscope (LSCP). Bullish – Patterson Dental (PDCO) and Dentsply (XRAY) as dental plays.

Cosmetics – Bullish – Procter & Gamble (PG) and Alberto-Culver (ACV). Bearish – Avon (AVP) or Revlon (REV).

Food – Bullish – Whole Foods (WFMI) is a Boomer play because it helps prevent disease.

Orthopedic Implants – Bullish – Zimmer (ZMH), Stryker (SYK) and Biomet (BMET). “Back up the truck,” but Cramer also advised viewers to “let the pricing come down then pick among the rubble.”

Assisted Living – Bullish – Sunrise Senior Living (SRZ) could be winners as the population ages. Bearish – Beverly Enterprises (BEV). which is too dependent on the government.

Gambling – Bullish – Harrah’s (HET), MGM Mirage (MGM)

Cruises – Royal Caribbean (RCL), Carnival (CCL).

Insurers – Bullish – MetLife (MET), Prudential (PRU) and Manulife (MFC) and said Nationwide Financial Services (NFS), Lincoln National (LNC), Jefferson Pilot (JP), UnitedHealth (UNH).

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Although Hurricane Katrina had had a serious economic impact in the U.S. economy, stocks recovered from yesterday’s losses. The Dow rose 68.78 points, to close at 10,481.60. Besides, the Nasdaq rose 22.23 points, to finish session at 2,152.09. Meanwhile, the S&P closed at 1,220.33, after rising 11.92 points.

Crude oil prices were almost flat during today’s session to close at $69.75. Also, natural gas futures topped $12 per million. Even after two days of Hurricane Katrina’s disastrous appearance, the impact of the storm on individual sectors of the economy was still sinking in. According to analysts, the flooding in New Orleans could raise the exposure of insurance and reinsurance companies to greater-than-expected losses. Therefore, insurance damage claims could be huge.

Home Depot rallied 57 cents, to close at $40.32, due to an increased demand in the wake of Hurricane Katrina. Also, smaller rivals such as Lowe’s Cos. increased $1.42, to close at $64.31. Nevertheless, gaming companies with operations in Louisiana and Mississippi fell in value. For instance, Harrah’s Entertainment Inc. declined $1.34, to close at $69.56, after announcing that its New Orleans casino will remain closed for at least one month due to damages caused by Katrina.

In today’s speech, President George W. Bush said that he will help New Orleans, in addition to other devastated cities to rebuild their shattered communities. President said that “the great city of New Orleans will be back on its feet”. Also, Bush appointed Homeland Security Michael Chertoff to head a Cabinet-level response to what he termed “one of the worst natural disasters” in the history of the United States. Finally, he said that the Energy Department and Environmental Protection Agency (EPA) had acted to decrease shortages of gasoline. Crude petroleum from the strategic petroleum reserve will also be lent to refineries. Then, the EPA had issued waivers allowing a greater variety of gasoline to be sold.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

It’s time to “ring the register” on homebuilder stocks. However, one homebuilder stock “the Fed can’t crush,” said Cramer, is Homex Development (HXM), since it’s located in Mexico.

Cramer acknowledged that investing in Latin America isn’t without certain risks, which are “real concerns.” But Cramer is willing to look past those risks because of Homex’s growth.

It is the only Mexican homebuilder listed on the New York Stock Exchange, and its books are kept according to U.S. accounting standards.

Morgan Stanley recently initiated coverage of Homex with an overweight rating.

A caller asked if Cramer was still bullish on Bancolombia (CIB), another Latin American play.

Cramer said Bancolombia was still worth buying, but he wasn’t as bullish on it after the stock’s 40% rally in the past few months.

Asked why Cramer was focused on Mexico, Cramer said the country is self-sufficient in energy, so its economy doesn’t have the headwind of oil that the U.S. economy has.

Adams Respiratory

Adams Respiratory Therapeutics (ARXT), a specialty pharmaceutical company, excites Cramer because of the company’s new variations of its Mucinex expectorant drug. The new variations, Cramer believes, will be granted marketing exclusivity.

If Food and Drug Administration grants marketing exclusivity for these new variations in the first half of 2006, Cramer expects Adams’ revenue to triple.

“If you want to own just one drug stock,” Cramer said, go with Genentech (DNA).

Solar power best of breed

“Solar power is starting to look pretty darn nice,” said Cramer. Cramer likes Cypress Semiconductor (CY), because it doesn’t have the “risk that comes from the fly-by-nighters.”

Cypress has a unit called SunPower, which is “best of breed” in the solar space.

Cypress announced this week that it would spin off SunPower but will keep a controlling interest. “I see at least 5 points of upside from Cypress right now.”

Guest CEO segment

Brown-Forman (BFB) CEO Paul Varga was on the telephone. Cramer was bullish on Brown-Forman because drinkers in their 20s and 30s, who used to drink beer, now prefer drinks made with Southern Comfort and Jack Daniel’s.

Lightning Round

Bullish – Coach (COH), Harman (HAR), Nordstrom (JWN), Martha Stewart Living Omnimedia (MSO), Xcel Energy (XEL), Google (GOOG), Yahoo! (YHOO), Puget Energy (PSD), SCP Pool (POOL), Plug Power (PLUG), Headwaters (HW), FuelCell Energy (FCEL), Terex (TEX), Gamestop (GME), Activision (ATVI), Valero Energy (VLO), Northfield Laboratories (NFLD), Procter & Gamble (PG), Radiation Therapy Services (RTSX), Offshore Logistics (OLG), National Oilwell Varco (NOV), EnCana (ECA), Skyworks Solutions (SWKS), Sirius Satellite Radio (SIRI), XM Satellite Radio Holdings (XMSR) and Genesis Microchip (GNSS).

Bearish – AT&T (T), Time Warner (TWX), Baidu.com (BIDU), LeapFrog Enterprises (LF), Albemarle (ALB), AvalonBay Communities (AVB) and Alcoa (AA).

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It was a day of losses for the U.S. stock market, which was probably caused by a rise in the price of crude oil and gasoline, after Hurricane Katrina shut 95 percent of production in the Golf of Mexico. The Dow fell 50.23 points, to close at 10,412.82. Besides, both the Nasdaq, and the S&P posted losses. The Nasdaq fell 7.89 points, to close at 2,129.76. Meanwhile, the S&P fell 3.87 points, to close at 1,208.41.

Crude oil for October delivery rose $2.61, or 3.9 percent, to close at $69.81 a barrel on the New York Mercantile Exchange, which marks the highest close since 1983. According to the U.S. Minerals Management Service, the storm shut 1.4 million barrels of daily crude-oil output. Platforms in the Golf are responsible for about 30 percent of U.S. output. Then, gasoline for September delivery rallied 41.39 cents, or 20 percent, to close at $2.4745 per gallon. In total, prices have more than doubled during last year.

A measure of retail stocks dropped 1.7 percent. For instance, Sears Holdings, the third biggest retailer in the U.S., lost $2.95, to close at $135.28. Besides, rival Target Corp. also slid $1.58, to close at $54.14. Another retailer that posted losses today was Wal-Mart Stores Inc., which fell 46 cents, to close at $45.19, which is the lowest level in three years. According to the world’s biggest retailer, about 80 Wal-Mart stores were closed in the Gulf Coast states.

Finally, Carl Icahn the billionaire investor may make a tender offer for an approximate of 10 percent of Time Warner Inc., in order to buy back shares and spin-off its cable-television unit. However, investor Icahn did not make any comments on the subject yet. After the news, Time Warner Inc. climbed 42 cents, to close at $17.89.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

Capstone Turbine (CPST) makes natural gas-powered micro turbine generators for business and home use.

Capstone recently finalized agreements with KeySpan (KSE) and Consolidated Edison (ED) to promote its products in the New York area. Capstone’s shares have moved from $2 to $4.50 in the past month, but the stock should really take off as the company moves west, Cramer said.

Capstone is poised for triple-digit revenue growth for the next few years, said Cramer, because it has a more cost-effective way to produce energy.

Cramer suggested to wait for a pullback before buying the shares, because the stock has recently made a big move up.

A caller asked if Caterpillar (CAT), which also makes micro turbine generators, would be a good play. Cramer said Caterpillar is too large a company for its micro turbine business to have much of an impact on the company as a whole.

Gambling your money

Penn National Gaming (PENN) is the “best gaming stock you have never heard of,” said Cramer. They will become the third-largest gaming company in the country after their acquisition of Argosy (AGY) closes.

Cramer said he did not like Las Vegas Sands (LVS), because “the hot money’s there.”

Fording splitting 3-for-1

Cramer was bullish on coal stock Fording (FDG) because of a 3-for-1 stock split coming Sept. 13.

Guest segment

UnitedHealth Group (UNH) CEO William McGuire was on the show by telephone. Cramer summed up the interview with two words: Walgreen (WAG) and AARP. “They’ve got the arrangements,” Cramer said. “This company’s got the growth.”

$500 for Google

During the Lightning Round, Cramer was asked about Google (GOOG). Cramer grinned, got close to the camera and whispered “Some guys think it’s going to $500.”

Lightning Round

Bullish – TurboChef Technologies (OVEN), St. Joe (JOE), Walt Disney (DIS), Intel (INTC), Google (GOOG), RTI International Metals (RTI), Boeing (BA), Noble (NE), National-Oilwell Varco (NOV), OraSure Technologies (OSUR), Transocean (RIG), GlobalSantaFe (GSF), Syneron Medical (ELOS), Occidental Petroleum (OXY), Sonic (SONC), Goldcorp (GG), Smith & Wesson (SWB), GameStop (GME) and Cemex (CX).

Bearish – Silicon Motion Technology (SIMO), Mannatech (MTEX), ScanSoft (SSFT), Mellon Financial (MEL), Tellabs (TLAB), Cirrus Logic (CRUS), Sun Microsystems (SUNW), SanDisk (SNDK), LifeCell (LIFC), Galmis Gold (GLG:NYSE – news – research – Cramer’s Take), Wal-Mart (WMT), Tenaris (TS), Electronic Arts (ERTS) and JDS Uniphase (JDSU).

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Today, it was day of gains for the U.S. stock market. The Dow rose 65.76 points, to close at 10,463.05. Besides, the Nasdaq increased 16.88 points, to close at 2,137.65. Meanwhile, the S&P also rose 7.18 points, to close at 1,212.28.

Although U.S. stocks opened lower today, due to worries that Hurricane Katrina could devastate New Orleans in addition to curtailing Gulf of Mexico oil production, the market posted gains after crude futures remained below the record of $70.80 per barrel. Profits in the market indicate that investors are still confident about the economy’s outlook. However, the dollar finished session high as traders were waiting for more precise news about Hurricane Katrina’s impact. The dollar last traded up 0.4 percent at 110.62 yen, as the euro fell 0.05 percent, to close at $1.2228.

Among stocks that posted losses today, airline stocks fell due to concerns that higher oil prices will force carriers to charge more for airline tickets. For example, American Airlines parent AMR Corp. closed down 1.9 percent. Besides, paper stocks suffered declines by worries that Katrina could decrease U.S. paper-making capacity. So, International Paper lost 1 percent of its value. On the other hand, home-improvement retailers posted gains, as a consequence of forecasts that the storm will force consumers in the Gulf Coast to buy goods to repair their homes. Thus, Home Depot closed 1.8 percent higher, and Lowes Cos. increased 2.3 percent.

Finally, shares of companies of energy finished session high, as investors believe in an increase in business because of damage to pipelines and oil production from Hurricane Katrina. Schlumberg Ltd., the biggest oilfield contractor by market value, added 96 cents, to close at $83.04. Also, Halliburton Co., the world’s largest oilfield-services contractor by sales, rallied 54 cents, to close at $57.80.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

Buy Alert – COLDWATER CREEK INC (CWTR-Nasdaq) – Technical Viewpoint: From a low of $26.00 on Aug 5, 2005 prices rallied, reaching a high of $27.94 on Aug 12, 2005. A decline saw prices pull back, reaching a low of $25.28 on Aug 24, 2005. Another rally saw prices penetrate resistance line “A”, closing 8/26/05 at $31.33. Technicals: MACD-Histogram (MACD-H): A Buy Alert! was given on Aug 25, 2005 when the Histogram crossed the “0″ line to the upside. Support: Remains at $26.50. Resistance: Is at $24.50. Point & Figure: Reversed to the upside on Aug 25, 2005. A P&F downside reversal takes place at $28.00. Summary: Technical indicators have turned bullish. BUY! COLDWATER CREEK INC (CWTR-Nasdaq) @ $31.50 Stop: Use a protective stop of $29.50. COLDWATER CREEK INC is currently trading @ $31.33 plus $0.41 on Aug 28, 2005. Price Objective: $40.50. Risk/Reward: $2.00 VS. $9.00. Today’s Risk Reward Ratio: 4:1

View current report with technical chart analysis

You have to own Montpelier Re Holdings (MRH) because people sell good insurance companies during bad weather. It’s the kind of knee-jerk reaction that happens every August and September, right around now, said Cramer.

Insurance companies always have to pay out during hurricane season, and they account for that. Expected hurricanes shouldn’t have any effect on their earnings.

Cramer prefers Montpelier to American International Group (AIG), which used to be the insurance play, because of AIG’s tarnished image at the moment.

Lowe’s (LOW) and Home Depot (HD) are not good hurricane plays. Cramer said, because both companies are “pretty good corporate soldiers,” when bad weather strikes. “They don’t gouge,” he said. “If anything, they give back to their communities.”

Airlines

Airline stocks have been going down for as long as Cramer has been in the market.

Although not an airline, Aviall (AVL), an outsourcer for the airlines, is one airline-related stock Cramer recommends. Aviall is benefiting from the airlines’ problems because it helps them save money.

Cramer said that although the helicopter business is healthy, there are no good pure plays because helicopter companies are all part of larger conglomerates.

A caller asked about World Air Holdings (WLDA). Cramer said Aviall was the better play.

Martha Stewart short squeeze

Cramer is bullish on Martha Stewart Living Omnimedia (MSO) because a short squeeze is occurring. The usual reasons to short a stock, such as accounting fraud or bad management, aren’t there with MSO.

“This is why I’m floored when I think about the short story with MSO,” said Cramer. “What’s the short strategy here? There are so many things that can go right now with this company.”

With Martha’s new TV show and new CEO Susan Lyne, MSO’s future “looks unbelievably bright.”

Grey Wolf is a winner

Grey Wolf (GW) CEO Tom Richards was on the show via telephone.

Cramer is bullish on Grey Wolf and believes the stock can go to $10. The stock closed Friday at $7.20.

“As long as there’s no excess capacity and they can raise rates, you know you’ve got a winner,” said Cramer.

Syntroleum’s – wait and see

Cramer spoke to Syntroleum (SYNM) CEO Jack Holmes. Cramer asked if his gas-to-liquids company was about to turn profitable.

Holmes said “we expect to have profits within the next two years.”

Cramer said “I want to see profits. I will reserve judgment until I see the profits.”

Lightning Round

Bullish – Harley-Davidson (HDI), McDermott International (MDR), Johnson Controls (JCI), Fluor (FLR), Lufkin (LUFK), PPL (PPL), Stolt Offshore (SOSA), Activision (ATVI), MicroStrategy (MSTR), Precision Castparts (PCP), Sirva (SIR), Sears Holdings (SHLD), AMLI Residential Properties Trust (AML), Headwaters (HW) and Amgen (AMGN).

Bearish – Safeway (SWY), Citigroup (C), OSI Pharmaceuticals (OSIP), AMR (AMR), Hi-Tech Pharmacal (HITK), Scana (SCG), Equifax (EFX), Cheesecake Factory (CAKE), Medtronic (MDT), Eastman Kodak (EK), Alpha Natural Resources (ANR), Veeco Instruments (VECO), Entrust (ENTU) and PLX Technology (PLXT).

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Today it was a day of losses for the U.S. stock market. The Dow fell 53.34 points, to close at 10,397.29. Besides, both the Nasdaq and the S&P posted losses. The Nasdaq fell 13.60 points, to close at 2,120.77, while the S&P closed at 1,205.10, after falling 7.27 points.

Negative economic news includes results of U.S. consumer sentiment for the month of August. The consumer sentiment index fell to 89.1 points in late August from 96.5 in July and 92.7 in early August. This shows the first decline since the month of May, but the largest decline since February of 2004. The consumer sentiment report has increased concern from investors about economic data from personal incomes and employment that will be released next week.

Bank stocks fell 1.2 percent today, which was the main reason for a decline in the S&P index. Higher interest rates decrease the value of bonds owned by banks, brokers and insurers. Therefore, JP Morgan Chase & Co., the third largest U.S. bank, lost 47 cents, to close at $33.65. And, Wells Fargo, the fifth largest U.S. lender, slipped 78 cents, to close at $58.79.

Today Federal Reserve Chairman Alan Greenspan said at the Jackson Hole Resort that high home prices are due to the low risk premiums demanded by investors, which at the same time have kept interest rates low. Greenspan also said that “history has not dealt kindly with the aftermath of protracted periods of low risk premiums”. In the past year national housing prices have risen 12.5 percent through the first quarter, and second-quarter price data still needs to be released next week. Also, Greenspan cautioned investors that in July investors will become too complacent about the risks of higher interest rates. Finally, the Federal Reserve Chairman said that central-bank forecasts and monetary policy are becoming highly driven by changes in asset prices, such as real estate.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

“Coal is hot, getting hotter. I need you in Peabody (BTU) coal,” Jim Cramer said.

As the prices of natural gas and oil increase, coal, a cheaper alternative for electricity production, takes market share.

Peabody has 50 years’ worth of coal reserves and is best-of-breed in the coal sector, Cramer said.

Cramer was bearish on Foundation Coal (FCL), Consol Energy (CNX), Arch Coal (ACI) and Massey Energy (MEE).

Asked for names of companies that supply the coal industry, Cramer mentioned Joy Global (JOYG), Terex (TEX) and Bucyrus (BUCY) as good buys.

Herb Greenberg segment

Herb Greenberg says he hasn’t changed his bearish take on Johnson Controls (JCI) now that they are buying York International (YRK).

Cramer said that Johnson Controls was emphasizing its more profitable controls business and deemphasizing its struggling auto business. “It takes itself out of the 11-to-12 multiple [category] of Lear (LEA) and goes to a 20 multiple.”

Cramer also likes another stock Greenberg has panned: Jarden (JAH). Cramer thinks it will win by default in the small-appliance sector, as its two main rivals, Applica (APN) and Salton (SFP), struggle under too much debt.

Speculation

Johnson & Johnson (JNJ) is being forced by the European Union to sell three of its businesses in order to receive the EU’s OK of its acquisition of Guidant (GDT).

Cramer said he would buy Edwards Lifesciences (EW) on speculation that they might be able to buy some of those businesses cheaply. Cramer warned that Edwards is a “dog” of a stock and that buying is only for a trade.

Toll Brothers (TOL) reported a “stellar” quarter Thursday but saw its stock trade down. Action like that is the “trading death knell” said Cramer.

Lightning Round

Bullish – News Corp. (NWS), Microsoft (MSFT), XM Satellite Radio (XMSR), Aflac (AFL), Internet Security Systems (ISSX), Bancolombia (CIB), UnitedHealth Group (UNH), St. Joe (JOE), Cimarex Energy (XEC), El Paso (EP), Tibco Software (TIBX), Monster Worldwide (MNST), Hershey (HSY) and Genesis Microchip (GNSS).

Bearish – Calpine (CPN), Urban Outfitters (URBN), Teva Pharmaceutical Industries (TEVA), Royal Caribbean Cruises (RCL), Trex (TWP), RealNetworks (RNWK), Check Point Software (CHKP), PetroQuest Energy (PQUE), FARO Technologies (FARO), Frontline (FRO), Serena Software (SRNA), Cubist Pharmaceuticals (CBST), Rambus (RMBS), MCI (MCIP) and Wal-Mart (WMT)

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