Cramer's 'Mad Money' Recap: Retail Best of Breed

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Editor's note: The following is a recap of a "Mad Money" episode that originally aired on May 15, 2006.

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In a shop-till-you-drop episode of "Mad Money," Jim Cramer offered his 10 best-of-breed retailers.

"This is a game you understand. This is a game you want to play," said Cramer, noting that the first instinct of many new investors is to buy a retail stock.

He gave viewers a list of his top 10 companies they can use to orient themselves in the retail jungle, but warned that these are not names to rush out and buy now.

These are stocks to watch, he said. And when they go down, you have a chance to "catch them and ride them back up higher."

He chose these companies for a variety of reasons, including the fact that some of these companies are "very special regional-to-national stories," which are the fast-growth plays.

Some are so well run you can't help but pick them up, some have new concepts and some are so consistent that they must be bought because "consistency matters in the retail game," he said.

These companies are generally more expensive than their peers, but, Cramer said, they also should make you more money. "You pay up for consistency," he said. You pay up so you know it's worth it to buy more when the stock goes down because these are companies you can count on to ultimately win.

The No. 1 Best Buy

His first retail superstar was Best Buy(BBY Quote), "the best hard-goods retailer in the United States ... make that the world," said Cramer.

He said that the company is the dominant name in big-screen-television sales, that its electronics retail dominance is virtually unchallenged and that it sells more CDs and DVDs than most music and video stores.

The company has a sizable opportunity to augment its already awesome hold over technology and music, he said, particularly with a new crop of iPod products on the way from Apple(AAPL Quote).

If Best Buy stops being No. 1, he said, then it's time to get out because he likes this stock only as long as it's cheap and still at the top of the heap.

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