The Cramer Effect Moves Bulls and Bears

While the Dow Jones industrial average managed to eke out another small gain and finish up 15 points on Monday, the “Cramer Effect” was working on both the bearish and bullish stock picks of Jim Cramer. On Friday’s Mad Money show, Mr. Cramer was bullish on Valmont and Yingli Green Energy which both posted gains, but was bearish on a Yahoo / Microsoft merger and Intuitive Surgical which all posted losses. 

Valmont Industries (VMI: 71.02 +1.57%) gained 1.7% after Cramer said he liked the stock and said it reminded him of Quanta Services (PWR: 18.87 +0.91%) which also posted a small gain. 

Yingli Green Energy (YGE: 11.74 +0.34%) jumped 1.1% after Cramer changed his position on solar stocks. Previously, Mr. Cramer has stated that First Solar (FSLR: 136.45 +1.16%) was the only solar stock he would recommend. Now Cramer likes both Yingli and Suntech Power (STP: 8.91 +5.07%). Cramer believes that the Chinese government initiative to fund 50% of the capital costs for solar installations could be a big boost to both stocks. 

Intuitive Surgical (ISRG: 281.18 +1.39%) dropped 1.7% after Cramer said that investors were too late into this stock after last week’s big move. 

Maybe the biggest surprise of the market session was the modest 0.5% move by Starbucks (SBUX: 25.07 +1.66%) after Cramer endorsed the stock as a “comeback story” and compared it to McDonald’s (MCD: 75.09 +0.09%) in 2003. Starbucks has been working recently to get its house in order. They brought back CEO Howard Schultz, they have cut costs dramatically and they’ve closed 800 stores. These cost saving measures accounted for the company’s better than expected earnings report, despite same-store-sales falling 6%. With the stock trading at 19.5x 2010 earnings and with a 18% growth rate, Cramer believes the stock is a buy. However, the market seemed to yawn at that recommendation with the stock ending almost unchanged.