It's a mad mad world
Mad Money’s Cramer Plugs W.R. Grace Stock
Jim Cramer's stock picks yesterday included the company indicted for poisoning Libby and causing hundreds of deaths.By Amy Linn, 7-14-09
Real junk. Photo by Allison Cooke, flickr.
Investomaniac Jim Cramer yesterday urged fans to buy stock in W.R. Grace & Co., a company that was acquitted May 8 of criminal charges that it contaminated Libby, Montana with asbestos from a company mine, leaving more than 1,000 people ill and hundreds dead. Grace declared bankruptcy in 2001 after being deluged by more than 100,000 damage claims related to the toxic asbestos in its products.
Cramer didn’t mention those details on his CNBC TV show, “Mad Money.” Instead, he focused on the fact that Grace ("amazing Grace,” in his words) will soon be exiting its eight-year spell in Chapter 11.
“All of W.R. Grace’s businesses generate double-digit operating margins and hold significant market share,” Cramer kvelled. “Add in about $100 million a year in free cash flow and 67 percent of total sales earned outside the U.S. and you have plenty of reasons to own this stock.”
Grace’s share price has been on the upswing this year despite continuing media coverage about the tragic role the company has played in people’s lives. The stock price rose 36 percent -- from 9.63 to 13.06—on the news about the not-guilty verdicts for the company and three of its former executives, who were cleared of all federal charges after an 11-week trial.
Grace’s lead trial attorney in the criminal trial was tort-star David Bernick, whose has also successfully defended Big Tobacco (including Brown & Williamson), breast-implant maker Dow Corning, and companies that operate nuclear weapons plants. (He also won for Apple in a class action involving iPod-related hearing loss.)
Grace closed today at $12.02, up just 50 cents from yesterday. So maybe Cramer’s madness has no method.
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