RealMoney Radio: Scratch the Surface

When looking to invest in the market, investors should not just look at the stock but also the company underneath the stock, Jim Cramer said on his "RealMoney" radio show Tuesday.

There are many times when simply looking at the stock might not tell market players everything they need to know, Cramer said.

For example, Toll Brothers (TOL Quote), which reported earnings but lowered its guidance this morning, is up 91 cents to $25.68.

"Normally, a sour outlook like that would produce a declining stock," he said. "It's a bounce that has me concerned."

If you just look at the stock it will tell you that it has bottomed and is rising, but "the fundamentals here are awful," Cramer said.

Housing is slowing, there is no sign of inventory being reduced and no analyst will get behind this stock, he said. It's only going up because there are always people who need to buy the stock, but after Tuesday's and Wednesday's session, Cramer predicted it will resume its downward trend.

The time to buy anything in the housing sector is when the Fed starts cutting rates, not when it just pauses, he said. Instead, he advised his listeners to get out of these stocks at these higher prices.

If there is one stock that Cramer said he gets asked about the most, it's Sirius Satellite Radio (SIRI Quote).

A couple of months ago, CIBC called a bottom in XM Satellite Radio (XMSR Quote) and that's when Cramer said Sirius Radio CEO Mel Karmazin should make a deal and buy XM Radio right then and there.

Sirius Radio and XM Radio "are at war," as the two try to undercut each other in a pricing war, he said.

"They have to stop," Cramer said. "And the window for Mel to act is getting smaller."

He believes this because Robert Peck, whom he considers the No. 1 analyst in this group, said XM Radio's problems are going away, and the stock is going higher.

Once XM Radio, which was recently at $12.90, gets to $16 or $17, it's going to be too big for Sirius Radio to manage, Cramer said.

Karmazin needs to make a move now in order to stop competition, otherwise nobody's going to make any money, he said.

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