Posted: Tuesday March 21, 2006 3:56PM; Updated: Wednesday March 22, 2006 6:24PM
Jim Cramer predicts a rematch of the '99 title game, and a similar outcome, with UConn's Rudy Gay leading the way to victory.
If you are involved in an NCAA tournament pool (or three), you really are no different than an investor. So why not create a stock portfolio based on the 16 schools still alive in March Madness as of Wednesday, March 22? We searched for companies whose ticker symbol is closest to a school's acronym. In cases where no such correlation existed (e.g., there is no WVU on the NYSE or NASDAQ), we got a little creative.
Then we asked Cramer to evaluate our portfolio. Because you don't want to put all your eggs in one basket, even if you do want to put all your basketballs in one. The funny thing is, had you invested in these 16 companies a year ago, you would have profited from 75 percent of them. That's a percentage even Cramer would be glad to have.
-- John Walters
One Year Ago
Bayou Steel Corp.
West Shore Bank
Georgetown Bancorp, Inc.
Jim Cramer says: "Not only do I see the Duke Blue Devils making it to the national championship game, but Duke Energy has long been one of my favorite stocks. The CEO took no cash salary, paying himself in shares when everyone had forsaken the company. The stock has not looked back since. ...
"That's a bit of a stretch using GOOG based on Pittsnoggle and based on West Virginia's and Google's run-up over the past 18 months. My colleagues at TheStreet.com, Will "Slim" Gabrielski and Michael "Diablo" Comeau, are very high on Terex ... much higher than I am on the Longhorns' chances of making it to the Final Four. My guys tell me this is an inexpensive, "mini-Caterpillar." A stock that should move higher in the coming quarters. ...
"I'm not as upbeat on Conn's as I am on its namesake and my pick to take it all, UConn. The appliance retailer was fast out of the gates following its November 2004 IPO. Maybe too fast, as the company is trading more than 21 times earnings, which is a hefty premium to its recent annual growth rate. ...
"Pepsi manufactures Gatorade, which was developed at the University of Florida. Pepsi's a best-of-breed stock. The Gators are not there yet."
Last Tuesday marked two seemingly unrelated events: The NCAA tournament tipped off with the play-in game (Monmouth beat Hampton) and CNBC's Mad Money, hosted by the infectiously passionate Jim Cramer, celebrated its first anniversary. But, really, how disparate are the stock market and the Sweet 16?
Both feature bulls (the Texas Longhorns) and bears (the UCLA Bruins). Both feature rebounds, points and acronyms -- you probably refer to IBM as International Business Machines as often as you refer to UCLA as the University of California at Los Angeles. And anyone who knows anything about either understands there's little difference between a blue chip stock and a Blue Devil 'baller.
Cramer, though, is a true original. If only NCAA hoops had a manic, bald-headed zealot with a cult following and a penchant for coining terms. Or, for that matter, a chair-tossing lunatic.
We corralled Mad Money's magisterial maven, who is nearly as passionate about sports as he is about stocks, long enough to have a little lightning round of our own regarding the rest of the NCAA tourney. Are you ready, Skeedaddy?
Cramer: John from New York. Jooooohn.
SI.com: A bracket-busting booyah! to you. Who has impressed you after two rounds?
Cramer: At the start of the tournament, you had three blue-chip teams in Connecticut, Duke and Villanova. I compare these No. 1 seeds with stocks such as Microsoft, Best Buy and Procter & Gamble -- that is, the best of breed among the competition that you can always count on to be at or near the top.
But, to be honest, the only No. 1 seed that has impressed me thus far is Memphis. The Tigers are like a stealth mid-cap stock: below the radar of the average investor but a consistent outperformer for those in the know. Memphis has won its first two games by an average of 16 points, but it faces a challenge in the Oakland regional from Bradley. The Braves beat Kansas and Pitt. That's like moving from the AMEX to the New York Stock Exchange overnight.
SI.com: How about the other Oakland matchup, UCLA vs. Gonzaga?
Cramer: The Bruins are like Boeing: an old stalwart back from some tough times and once again trading at all-time highs. Coach Ben Howland is like [Boeing CEO] James McNerny. Howland worked his magic at Northern Arizona and Pitt before taking over at UCLA, while McNerny has a GE and 3M pedigree in his background.
The Zags are always overrated at the start of March Madness because they play an easy schedule. They're like the company that is notorious for low-balling its earnings guidance and always beats estimates by a penny or two.
But I love Adam Morrison. He looked like a madman last week when he was bouncing the ball against his head in the close win over Xavier. He kind of reminds me of myself right before the Lightning Round segment on Mad Money.
Still, the Bruins will not only defeat the Zags, they will also go on to beat Memphis and return to the Final Four for the first time since they cut down the nets in 1995.
SI.com: You mentioned 3M, which is based in the Twin Cities, as is another regional this weekend.
Cramer: I watched Villanova on Sunday night, and they have to be the fastest team I have ever seen. But as with a high-flying momentum stock, if 'Nova's timing is off and they miss a few plays -- or, as we say on Wall Street, a whisper number -- they're in for a rude awakening. That said, I expect a Big East Elite Eight matchup here between the Wildcats and Georgetown, who will scrape past Florida.