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Cramer's 'Mad Money' Recap: The Dow's Uppers

Click here for an archive of Cramer's "Mad Money" recaps.

The "best place to be," Jim Cramer told viewers of his "Mad Money" TV show Tuesday, is the Dow Jones Industrial Average because it's "full of opportunity."

Cramer believes the index will reach 14,548 this year, and he sees it climbing by close to 500 points in the next three months and then another 500 in the November-December rally he predicts will come. The Dow closed Tuesday at 13,540.

Cramer didn't pull the estimate "out of thin air," he said, but rather arrived at it after doing a bottom-up analysis of all the 30 stocks in the Dow by determining what price each stock is likely to reach by the end of the year.

In this second part of his weeklong series dedicated to evaluating the 30 stocks in the Dow, Cramer started Tuesday with Caterpillar (CAT), a name that's driving him crazy "because people still don't get it."

"It is the single most misunderstood large-cap stock in the universe," Cramer said. People need to understand that Caterpillar, which he owns for his Action Alerts PLUS charitable trust, is where the growth is. "It's in the machinery sweet spot," he said.

First of all, everything in housing is going to be up against "easy comparisons" during the second half of the year, Cramer said. But despite that, Caterpillar has more to do with infrastructure in the Middle East tar sands and the digging out of coal and petrochemical refineries in Dubai than it has to do with homebuilders such as Lennar (LEN) or Toll Brothers (TOL), he said. Caterpillar, he predicts, should reach $90 by year-end. The stock closed Tuesday at $75.51.

Moving on, Cramer said he believes that Citigroup (C) has potential upside despite the company's leadership and that Coca-Cola (KO), which closed today's session at $51.48, should go to $60 in six months.

Neville Isdell, Coke's chairman and CEO, has taken the beverage company's stock and made it so that it has growth in the mid-double digits, he said. Coke is diversifying beyond carbonated beverages, and its new product, Coke Zero, is a hit.

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