Analyzing Notable Bearish Calls Made by Jim Cramer

Analyzing Notable Bearish Calls Made by Jim Cramer

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For the week ending April 12 2013, Jim Cramer covered 69 companies, of which he was bearish on 13 of them (or 19%). Since the companies that he was bullish on are up 11.9% from their 200 day moving average, there may be greater value in looking more closely at the companies getting “sell” calls. The companies are:

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Unsurprisingly, a number of resource companies were on the bearish list. Valero Energy (VLO), a US refiner, peaked at $48.97 while SandRidge Trust (SDT) is down 50% from highs reached last year. Valero is spinning off CST Brands, a retail unit, through a distribution to its shareholders. CST Brands operates independent gas stations and convenience stores. The unit generates nearly $500 million in earnings for Valero.

Phillips 66 (PSX) was another bearish Cramer call. Shares are up nearly 15% in 2013 and are up 33.5% over the last 6 months even with the most recent sell-off. Despite the bearish call, the refiner was cited by Oppenheimer as a buying opportunity.

In the retail sector, JC Penny (JCP) is at a share price that is over 50% off levels from 2012. The company scored a minor victory against Macy’s (M) recently. J.C. Penny will be allowed to sell Martha Stewart (MSO) products under the “Everyday” label. Liquidity is becoming a concern for the company. The company hired Blackstone (BX) to look for ways to raise its cash. J.C. Penny needs to raise $1 billion, to alleviate worries for suppliers.

Last week, the company removed former Apple executive Ron Johnson from the CEO position. 3 former Apple executives that Johnson hired also left J.C. Penny. This includes the Chief Operating Officer, Chief Talent Officer, and Chief Creative Officer.

In the automotive sector, Johnson Controls (JCI) was ranked negatively by Cramer. The company pays a dividend that yields 2.3%. Johnson Controls could be looking to sell its automotive electronics unit. The company hopes to get $1 billion for the unit.

Written by Chris Lau

 

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