Last week, Jim Cramer covered 9 notable companies in the resource sector and was bullish on 6 of them. The bullish bias comes at a time when investors are selling off companies sensitive to the recessionary phase of the economic cycle. Investors are anticipating global growth to slow in places like China and in Europe.
Caterpillar (CAT), which Cramer was bullish on, peaked at just below $100 on February 1, 2013. Offering a dividend that yields 2.46%, is buying back $1 billion shares from Citibank. The 11 million share buyback is expected to be completed by June 2013. Caterpillar was upgraded by JP Morgan (JPM) on April 23. An analyst cited an uptick in seasonal sales strength in China as a reason for the upgrade. Despite the upgrade, risks remain. Economic growth is slowing worldwide, and capital expenditures in the mining sector will make things difficult for Caterpillar.
In the oil sector, Cramer liked Exxon (XOM). Investment boutique firm Oppenheimer noted that flat profit growth, higher costs, and declining production would make Exxon an underperformer to the S&P index. The minor selloff in Exxon is raising its dividend yield to 2.59%. Exxon still holds a market capitalization of $393.40 billion, slightly ahead of that of Apple. Apple now has a market cap of $391.78 billion, hurt by a 24.4% one year decline in its shares.
Clean Energy Fuels (CLNE) was another Cramer buy call. Shares surged to nearly $14, up from a $12 April low, before settling at $13.05. The idea of natural gas fueling stations by ENN Group was cited in Reuters recently. In March 2013, Ascendiant Capital began coverage of the company with a “buy” rating and a $15.50 target price. Fuel sales and natural gas highway fueling installations were reasons for the bullish call by the firm.
Golar LNG Ltd. (GLNG). Sell. Golar shares slumped to $33.16 and are well below a $41 peak reached in February 2013. Shares now yield a dividend yielding 5.13%. Golar LNG Partners announced a public offering of 3.9 million units at the end of January. Golar LNG said it would purchase $12.4 million of the units in a private placement. In March, the company said preliminary quarterly earnings would be $22.8 million on sales of $111.8 million.
Written by Chris Lau