Cramer's 'Mad Money' Recap: Seeing Red in Security

Greenberg, Cramer Takes

Senior MarketWatch columnist Herb Greenberg joined Cramer to spar over the merits of Sunrise Senior Living(SRZ Quote), a long-term care facility company.

Greenberg says the same-store sales of Sunrise's base business are growing at 3.3% a year after you take out price increases, and that the rest of the company has morphed itself into a management services company.

He argued that this makes the accounting opaque and the company hard to understand.

But Cramer said Sunrise is a "great demographic play" and that he sees the stock going higher.

Greenberg also took issue with Marchex(MCHX Quote), saying that the organic growth of the core business is doing nothing.

He said that the company is a "manana story," meaning that it keeps promising results tomorrow.

Finally, Greenberg took a look at Harley-Davidson(HDI Quote). He said he told Cramer on a "Mad Money" episode several months ago that the company had warehouses that dealers could use to hold bike inventory. Now, Greenberg said, the company has said it is changing course, but did not give a reason why.

Both Cramer and Greenberg said that this could be a reason to be wary of Harley.

A Possible Chip Shot

"For less than the price of a sandwich," Cramer said, he had a stock poised to make some money, and that's Applied Micro Circuits(AMCC Quote).

Like every over tech company he's been bullish on, Applied Micro Circuits is part of the optical networking complex. And like many of those companies, this stock has been a real dog, he said.

In 2000, the stock was trading in the $100 range, but then it sank to $3 and change after the tech bubble burst; and he said it was "the proverbial worst house in a really bad neighborhood."

The company makes optical chip components, which makes it the very bottom of the optical networking food chain, so it got creamed when there was too much supply and very little demand.

But components for optical networks are in short supply and that makes everything Applied Micro Circuits has more valuable and could make the stock worth owning, he said, adding that the earnings estimates on this company may finally be too low.

Plus, the company makes a new chip that is great for the fiber optic rollout, and has gotten good press in tech trade publications, Cramer said. The new chip "PON" is a likely winner in the networking space, and could take us to the next step beyond DSL.

Moreover, the company's biggest customer, Nortel(NT Quote), is going to get a substantial contract from one of the Baby Bells, Cramer said.

While that might not be a big deal for a company the size of Nortel, it's huge for company like Applied Micro Circuits.

Lightning Round

Cramer was bullish on: Nokia(NOK Quote), Dynegy(DYN Quote), El Paso(EP Quote), VeriFone(PAY Quote), Sara Lee(SLE Quote), BHP Billiton(BHP Quote), Forward Air(FWRD Quote), UPS(UPS Quote), First Marblehead(FMD Quote), Acadia Pharmaceuticals(ACAD Quote), Alcan(AL Quote), UBS(UBS Quote), Legg Mason(LM Quote), Shaw Group(SGR Quote) and Yahoo!(YHOO Quote).

Cramer was bearish on: Taser(TASR Quote), Intel(INTC Quote), Axcan Pharma(AXCA Quote), Sovereign Bancorp(SOV Quote) and H&E Equipment Services(HEES Quote).

For more of Cramer's insights during the most recent Lightning Round, click here.

---

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.