Cramer's 'Mad Money' Recap: Cool Runnings

Takeover Targets

Next, Cramer turned to teaching viewers how to identify potential takeover targets.

"The market has been taking down anything with a high multiple," he said. "I think we are going to see a wave of consolidation, and we need good stocks with good balance sheets."

He promised to reveal to viewers his list of technology stocks of good takeover targets during the segment that could be bought with acquisitions in mind.

But Cramer warned that it would only work, "as long as you do your homework."

"I want to show you how to do this analysis yourself," he said. "So what's on the list and why?"

He explained that the criteria he used to select a target takeover group included those stocks that have taken a beating in the market lately -- those that got hammered in the backdating scandal.

Among the homework we do is "screening for profitability," he said. "I will not recommend a stock that is not making money."

The twenty stocks that Cramer narrowed down further, based on other "totally subjective factors," are: Broadcom(BRCM Quote), Western Digital(WDC Quote), Palm(PALM Quote), Wind River Systems(WIND Quote), Websense(WBSN Quote), BEA Systems(BEAS Quote), Tibco(TIBX Quote), Filenet(FILE Quote), Avid Technology(AVID Quote) and ActiveIdentity(ACTI Quote).

"Let me explain a few," he said. "Let's start with Broadcom, BRCM."

"A most, most hated stock," he exclaimed. "Is pretty simple really: It is getting killed on the options backdating stuff."

"But it's still a great chip company with a great product line."

ActiveIdentity, he said, was likely to be bought by Symantec(SYMC Quote).

"Both Tibco and BEA Systems are in the same business," he added. "Citigroup(C Quote) says there is a middleware gap, that's what these guys make, and they are the companies most likely to get absorbed by buyers."

"I could see Hewlett-Packard, SAP(SAP Quote) or Oracle(ORCL Quote) buying either one or both."

"I endorse all these names on my top 10 list."

"Here's the real bottom line," he said. "Tech, because it has too much cash but not enough growth," would mean consolidation that investors could profit from.

"Please do not speculate on anything unless it is profitable," Cramer said.