Thursday, September 9, 2010

Jim Cramer on: When Will Citigroup Bounce Back? and "Three Stocks That Could Double in the Next Year" (C)

The stock is up 8 cents at $3.91.
Long time readers know I follow Jim Cramer more for amusement rather than for hard info.*
From CNBC's Mad Money:
For Wednesday’s Mad Mail, Mike in Florida wanted to know what factors would most likely influence Citigroup’s [C  3.925    0.085  (+2.21%)   ] recovery and when, if ever, that recovery would happen. Cramer was quick to differentiate between the stock and the company itself, saying the government has been selling its massive stake in Citi and that has hurt the share price. The bank, however, is seeing improvement in its book value Cramer said, as its “underwater” assets “get better and better each quarter.” This is why he thinks the stock “goes higher” once the government is done selling “and you catch a move to $5.”
From BloggingStocks:
It's all well and good to say a stock posting improving earnings is a good buy with upside potential. But how much upside? The truth is that picking stocks capable of dramatic gains -- potentially as much as doubling your money -- is much harder. That's because charts don't offer much information for big moves like this, and efficient market theory argues against such short-term performance.
But finding doublers, while difficult, is not impossible.

One good place to start is screening book value analysis or cash analysis to find a deal, or to find potential acquisition targets. Also, while a turnaround typically takes more than a year to come to real fruition, there are still success stories -- such as Chipotle Mexican Grill (CMG), which was trading around $60 in October 2009 and is now up to about $160 per share, topping even its 2007 highs.

Here's a look at three stocks that could double in the next 12 months if things play out. All of these stocks are actively traded, with an average volume of over 1 million shares daily, and they all have at least some stock options tied to them to reach that profit goal....

...#2 – Citigroup, Inc. (C)
Citigroup, one of the "too big to fail" banks, is slowly and sloppily getting out from underneath the government. What's more, bank pressure under Fin-Reg is hurting the stock. It's sitting at the bottom of its 52-week range ($3.11-$5.07) – a far cry from its +$50 valuation as recently as 2007.

There is undoubtedly a long way to go, and Citi may never get back to that lofty share price. CEO Vikram Pandit is probably not even half way to getting to a core Citi after divesting assets, so who knows what the smaller bank ahead could be worth on a per-share basis. But Bill Ackman's Pershing Square disclosed he's put a few hundred million dollars into Citigroup on the theory that it trades at about 3 or 4 times what the future company's core earningswill tally. That kind of value coupled with a current share price that's about the price of a Big Mac makes a doubler a very real possibility....MORE
The post also mentions Energy Conversion Devices, I'd be careful with ENER, there is at least a 30% chance of a bankruptcy, i.e. very high risk for the chance at a double.

*Previously on Blossom:
Jim Cramer beats Monkey in Stock Picking Contest!
What Jim Cramer Does After Beating the Monkey 
"Jim Cramer Takes Issue With Own Investing Tips Being Thrown Back At Him, Demands Apology, More Gentlemanly Conduct (On The Internet)" GS; TSCM
Tracking Jim Cramer: "Investing in Mad Money: Price and Style Effects"
Cramer calls a bottom (again)
Bottom Caller: Cramer on Markets
First Solar Target Raised from $103 to $105 at Goldman Sachs, Cramer Confused (FSLR)
Cramer on BloggingStocks: I won't get excited this time
Jim Cramer Admits: "I Screwed Up" In Recommending Wachovia Stock Two Weeks Ago Because I Liked The CEO
Jim Cramer, Nancy Pelosi and T. Boone Pickens Walk Into a Bar (CLNE)
July 30, 2008
Jim Cramer: "Yes, the Market Has Bottomed"
I respectfully disagree but at least he's humble and lovable.
July 12, 2008
Cramer: Stocks are Doomed, Buy Wine Instead
Hillary Clinton talks with Jim Cramer...And: Bill Clinton, private equity maven?
No tips on cattle futures, a lot of green/clean though
.Bear Stearns: Jim Cramer Defends His Position, Is Still Hated (BSC)
How To Think About Jim Cramer’s Insane Confidence--Even For A Crazy Person--In Bear Stearns
Jim Cramer: Mad Money, Bad Blood (Behind the Scenes)
The Columbia Journalism Review has an interesting look under the rock:
Rick Santelli Takes Down Jim Cramer
Full Disclosure- I've only seen Mad Money a few times, when friends would email links to particularly funny episodes. The guy is a self-confessed stock manipulator....
...And one of the funniest bylines you'll find on a market manipulation story:

Cramer vs. Cramer Will his crazy confession destroy his career?

And many more.