Mad Money’s Jim Cramer was discussing some of the underdog stocks of this market on Tuesday night’s show.& He thinks that the market’s late day reversal which left the Dow 50 points higher after spending almost the entire day down suggests this is a good market for the underdogs.& Pointing to three stocks that have recently made secondary offerings to make the case for buy after the price has fallen below the offering price.& The conventional wisdom suggests that when a company resorts to offering additional shares to the market, it is a bearish sign that the stock needed to mend its balance sheet weakness.& So, earlier this week Anadarko Petroleum(APC),Bank of New York Mellon(BK) and U.S. Bancorp(USB) all announced their pricing of a secondary offering to the market.& Subsequently, all of the shares fell to below the offering price, and according to Cramer, this is the time to swoop in and buy.Ockham

“Which is why I keep saying this is precisely what happens in a bull market, people need to get second, the deals, all these equity offerings, they are not negative. Anadarko, one of our absolute favorite natural gas plays, has been a red hot stock, but it has a subpar balance sheet. This additional capital allows them to be opportunistic. They can pay down debt…I’m still a buyer of Anadarko. Same goes for Bank of New York and U.S. Bancorp. These two banks sold stock down more than 10% from last week’s the bears say look out below. I say wait a second…They become more solvent. And that’s exactly what they’re how can that be bad? How can that be bad for a company take that, Professors and Mary Anns. Both U.S. Bancorp and Bank of New York first failed to hold the offering prices. But that’s when you had to swoop that’s when you had to swoop in and buy buy buy!& Makes me want to do the same thing for Ford when it prices 300 million shares later this week. Do not buy on that offering. Wait until the mealy-mouthed, Casper Milquetoasts panic, and then you do something.”CNBC’s Mad Money 5/12/2009

No doubt, Cramer does have a unique way of looking at stocks.& Secondary offerings have negative connotations for stocks because they are dilutive to existing shareholders.& However, if you can buy a healthier company at a discount to even the secondary offering price, it may in fact be a good deal.& Cramer is going to be looking to buy into the massive Ford(F) offering when it gets priced, which is a bold move to say the least.& At Ockham, we still think there is just too much risk in automakers to justify Ford’s near doubling in the last three months.& We have reaffirmed our Fairly Valued valuation on Ford at this time and most likely will not be looking to get in after the offering.

Read more: