September 15th - Home Builders

Cramer has called the bottom in the home builders and recommended buying the following stocks:

Toll Brothers Inc. (TOL) Closing Price: $28.09
KB Home (KBH) Closing Price: $45.70
Lennar Corp. (LEN) Closing Price: $46.39
Centex Corp. (CTX) Closing Price: $53.45

His 10 reasons for this bottom he said were:

The stocks have stopped going down even on bad days in the market
The analysts have defended the housing stocks, but have now gone negative
Interest Rates have peaked
Employment is improving
Raw costs have declined
The stocks are priced to perfection
Buying a home is still a smart investment
Home builders are making money
Home builders sell close to book value
The media is starting to catch on and is calling the bottom too

TOL
Closing Price: $28.09
After Hours High: $28.60
Percent Increase at High: 1.8%
Price Level Off Point: $28.45
Percent Increase at Level Off Point: 1.3%
Trades on NYSE
Sector: Industrial Goods
Short %: 13.35%
Days to Cover: 3.9

TOL is the only one with a good price for shorting according to my research. The last time Cramer mentioned TOL in a focused segment the stock, which closed at $28.43 the night before opened at $28.68 and saw a high of $29.28 and closed at $29.08 so there was only a small opening spike and the stock showed strength. The short percentage last time (May 25th) was 11.6% with 3.6 days to cover, much like now. So the strength from last time could be seen this time around if short covering were the reason. Calling a housing bottom is a very bold pick here for Cramer. He claims to have an excellent track record for calling the home builders sector. The high today for TOL was $28.95 and we are well below that after hours here, so this would be an ANGO no-short rule here. Its been a while since I have seen this come up so I will explain my reasoning here. If a stock doesn't go above the daily high after Cramer mentions it after hours that means to me that the stock had strength on its own during the day to go as high as it did. This rule has been correct maybe just under 50% of the time, but it does help avoid some bad trades so I feel it is worth it.

Next Cramer looked at sporting goods and recommended VF Corp. (VFC) Columbia Sportswear Co. (COLM) and likes an upcoming IPO for Heely's. VFC and COLM are both too expensive here closing at $73.80 and $53.80 respectively.

Finally in Cramer's gameplan for next week he said to buy Oracle Corp. (ORCL) ahead of earnings. The stock had plenty of trading after hours, but all before Mad Money aired. The stock was also down after hours. Cramer also said Morgan Stanley (MS) AG Edwards Inc. (AGE) and FedEx Corporation (FDX) were good plays for next week, but again, all are too expensive for shorting any spike.