What's up with BE Aerospace?

I've been surprised by the drop in BE Aerospace (BEAV) over the last week. Today it closed at $32.72 which is not much above its 52 week low. I'm sure the reason it's getting bid down is because most of the domestic airlines are getting hurt by high oil prices. To me, that view is pretty shortsighted. When I first started looking into this stock, I was interested because the components they make for planes are lighter and in higher demand since companies are looking for any way to cut costs. However, as I started to study the company more, I found that they have a lot more going for them than just making light weight seats. It turns out that they have several divisions and I believe all of them stand to benefit in the current environment. I have recommended this stock twice before with an average price of $36.08. The stock traded into the low 40's after my last recommendation before the recent pullback. Today I'm recommending buying BEAV again which gives us an average price of $34.96. I look forward to selling this stock for a profit in the future.

Take the gift in BUCY & JOYG

I have been touting both Bucyrus (BUCY) & Joy Global (JOYG) for the last few months. At one point I suggested taking profits after a quick run up, but now I'm back in the buying mood. It appears commodity prices will remain strong for the next three to five years and this will in turn drive demand for products made by both of these companies. Today JOYG announced second quarter earnings and a strong outlook for the future. However, the stock was only up a little more than 3%. BUCY was actually down on the day. I'm putting both of these stocks back on the buy list with a recommended price equal to today's close. For BUCY that's $67.55 and for JOYG that's $80.44.

Let's Stick with the Global Growth Story

There are several stocks that I want to detail as part of this post. Unfortunately, I don't have time right now to go in-depth on all of them, so I will just give the names for now. Burlington Northern (BNI), Bucyrus (BUCY), Joy Global (JOYG), Transocean (RIG), National Oilwell Varco (NOV), Foster Wheeler (FWLT), Fluor (FLR), Chesapeake Energy (CHK), Freeport McMoran (FCX), Monsanto (MON), US Steel (X), Arcelor Mittal (MT), Potash (POT) & Mosaic (MOS). I'll be back later with some more details.

I'm Flattered! Jim Cramer reads my blog!

A few weeks ago I recommended buying Joy Global (JOYG) and Bucyrus (BUCY). Both stocks performed well, being up 11.5% and 15.75% respectively, through Tuesday, April 29th when I recommended taking profits. Then, on Thursday Jim Cramer recommended both stocks on his "Mad Money" show. I still like both stocks, and I would buy them again on any weakness going forward. Actually, I would buy them at the prices they were trading at on Wednesday, but Cramer took care of that by recommending them on his show and now they're both higher. The reason I recommended taking profits was because I was worried about what the Fed might say or do on Wednesday. Their meeting came and went, with the FOMC lowering their "overnight lending rate" by 25 basis points. However, as is usually the case, the statement released by the Fed was more important than what they did with interest rates. The Fed was expected to signal an end to interest rate cuts, but instead they left the door open for more cuts in the future. If they had made a statement that said the interest rate cuts are over, then I think both stocks would have suffered in the short term. This is because the dollar would have strengthened, which would have put pressure on commodity prices and then rightly or wrongly, all stocks related to commodity prices would have suffered for awhile. I felt it was better to lock in the gains than to take a chance on losing them to the Fed. Now, eventually I expect the interest rate cuts will come to an end and the strengthening dollar scenario will play out. Until then, I think you can buy the commodity plays that have done so well especially the ones that pulled back last week such as Mosaic (MOS), Potash (POT), Monsanto (MON), Apache (APA), Chesapeak Energy (CHK) and Transocean (RIG).