Jim Cramer Sees Alcoa (AA) as Top Dow Pick for 2011; Likes Intel (INTC), American Express (AXP)

January 4, 2011 10:48 AM EST
Jim Cramer, host of CNBC's Mad Money, said Monday that Alcoa Inc. (NYSE: AA) will be the top performer on the Dow Jones industrial average this year, but he offered the side note that the leading independent producer of aluminum may not be on the Dow at the end of 2011, as it could be taken over.

Cramer sees the ramp-up of industries that use aluminum as a base metal to continue, which will drive prices higher, adding that there is too much demand and to little supply right now.

Alcoa may be a takeover target according to Cramer, whether from Vale (NYSE: VALE), BHP Billiton Ltd. (NYSE: BHP) or Rio Tinto plc (NYSE: RIO). He sees a $22 per share bid for Alcoa, which would give investors a 39 percent premium over the stock's closing price on Monday. Cramer sees the stock hitting $18 without a takeover.

Alcoa is set to kick off earning season when it reports next Monday. Shares are up 3.70 percent to $16.39 in midday market movement on Monday.

Cramer also likes Intel Corp. (NASDAQ: INTC), saying its on its way to $30 this year, on the strength of its next-generation of processors launching this month. He added that analyst concerns over price erosion and being late to the mobile party made sense in 2010, but not this year.

American Express Co. (NYSE: AXP) is Cramer's third place pick on the Dow for 2011, saying it will climb to $60 by the end of the year, or a 40 percent increase. He sees the stock as a strong growth play, especially since nobody sees it as a growth stock.

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