Bloomberg News

Jim Cramer: GameStop, Sigma-Aldrich, TXU, Sonoco Products

August 22, 2006

GameStop Corp. (GME:US), the world's biggest video-game retailer, is worth buying because revenue will grow on products such as the new Madden NFL game and the Xbox 360, Jim Cramer said on his ``Mad Money'' television program on CNBC.

Sales this year will exceed 2005's because game buyers last year were awaiting new releases, said Cramer, a market commentator and former hedge-fund manager.

Sigma-Aldrich Corp. (SIAL:US), which makes chemicals for research laboratories, should be bought because its stock price rebounded after weaker than expected results during the most recent quarter, Cramer said.

Cramer recommended TXU Corp., the largest Texas power producer, because he said the company has cut debt during the past two years and its price-to-earnings ratio is less than its growth rate.

Sonoco Products Co. (SON:US), which makes boxes, food cans and industrial packaging, is worth buying because revenue will increase as food companies attempt to increase market share, Cramer said.

Borders Group Inc., the second-largest U.S. bookstore chain, and National Semiconductor Corp., whose chips amplify sound in wireless phones, are both worth buying because the stocks recently fell on financial results.

Cramer recommended Dynegy Inc., an owner of U.S. power plants, because he said there's been ``massive'' insider buying, which may be a sign of a future takeover.

The company also has cut debt and may be profitable by the end of next year, Cramer said.

Microsoft

Microsoft Corp. (MSFT:US), the world's biggest software developer, is worth buying because of its stock buybacks, while Qwest Communications International Inc., the fourth-largest U.S. local- telephone company, should also be bought, Cramer said.

Core Laboratories NV (CLB:US), an oilfield-service company, was recommended by Cramer because revenue will rise on increasing oil prices.

Electronic Arts Inc. (EA:US), the world's biggest video-game maker, should be avoided because of accounting irregularities, Cramer said. The maker of the Madden NFL series ``won't hit major profitability for a couple years, said Cramer.

Activision Inc., the second-largest U.S. maker of video games, should be avoided because ``that stock's so checkered, it makes EA look good,'' Cramer said. Investors should also sell Take-Two Interactive Software Inc. (TTWO:US), maker of the ``Grand Theft Auto'' video games, Cramer said.

McDonald's

Cramer recommended McDonald's Corp. (MCD:US), Merck & Co., Pfizer Inc., Abbott Laboratories (ABT:US), Schering-Plough Corp., Varian Medical Systems Inc. (VAR:US), L-3 Communications Holdings Inc. (LLL:US), Valero Energy Corp. (VLO:US), Capital One Financial Corp. (COF:US), Advanced Micro Devices, Inc., Clorox Co. (CLX:US), Double Hull Tankers Inc., Garmin Ltd. (GRMN:US) and Amgen Inc. (AMGN:US) in response to questions during the show's regular ``Lightning Round'' segment, and Citrix Systems Inc. and Weyerhaeuser Co. (WY:US) in the ``Sudden Death'' round.

He also told viewers to avoid BJ's Restaurants Inc. (BJRI:US), Barr Pharmaceuticals Inc., American Science and Engineering Inc., North Fork Bancorporation Inc., Atheros Communications, Diana Shipping Inc. (DSX:US), Navteq Corp., Genentech Inc. and Gold Kist Inc. in the regular ``Lightning Round.''

Cramer said he owned Schering-Plough and Citrix Systems for his charitable trust.

To contact the reporter on this story: Danny King in Los Angeles at dking19@bloomberg.net

To contact the editor responsible for this story: Aimee Sullivan at asullivan@bloomberg.net.


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Companies Mentioned

  • GME
    (GameStop Corp)
    • $37.86 USD
    • -6.01
    • -15.87%
  • SIAL
    (Sigma-Aldrich Corp)
    • $135.8 USD
    • -0.18
    • -0.13%
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