It is best not to buy Service Corporation International stock or use an SCI funeral home
The Stock Adviser Cramer recently issued an advisory not to buy Service Corporation International Stock, NYSE:SCI. What is significant here ist hat Cramer said not to buy SCI stock. The reason for that is the decline in SCI revenue.
Cramer did not really say why- but he stated he would not buy the stock. But the question oh yes. The question points to the publics lack of understanding on how the Funeral Industry, and how funerals work.
The question references the Estate tax approved by Congress for 2011 with little debate and fanfare.
Cramer received a rather macabre trading idea from one viewer:
“In 2010, the estate tax will be completely eliminated. However in 2011, the estate tax will jump back up to 55%. With that much money on the line I am willing to bet that greed will be responsible for an abnormal number of deaths in 2010 … I know it sounds awful, but what do you think about Service Corp. International (SCI), the funeral services firm.
Cramer responded that he researched a similar scenario the last time the estate tax laws were changed, found that there was not an unusual increase in the death rate among the affluent and didn’t see a reason to buy Service Corp. “I’m not buying the Service Corp. thesis. Because I’m probably the only person in America who’s done that study.”
The lesson here for the consumer is three fold.
1. Gain an understanding of funerals and the funeral industry and how they work.
2. Do not use an SCI funeral home or cemetery. Your risk is scandal and higher cost.
3. Do not by Service Corporation International Stock.
Funeral Industry|Funeral blog by Your Funeral Guy