Mad Money Recap

Cramer's 'Mad Money' Recap: Bling's the Thing

TheStreet.com Staff

12/08/05 - 07:30 PM EST

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


Americans gotta have their bling, and if you can't afford a diamond, you'll buy something from Charles & Colvard (CTHR Quote - Cramer on CTHR - Stock Picks), Jim Cramer said Thursday on "Mad Money."

Charles & Colvard's synthetic moissanite jewels cost one-tenth the price of a diamond but are "more brilliant and more lustrous than diamonds," he said. Moissanite jewelry is carried at more than 700 J.C. Penney (JCP Quote - Cramer on JCP - Stock Picks) stores, said Cramer, and it is being tested at Zale (ZLC Quote - Cramer on ZLC - Stock Picks) stores and Helzberg, owned by Berkshire Hathaway (BRK.A Quote - Cramer on BRK.A - Stock Picks).

Cramer doesn't believe moissanite will penetrate the high-end diamond market, which is in an "unbelievable bull market." He would recommend Anglo American (AAUK Quote - Cramer on AAUK - Stock Picks), which owns 40% of De Beers, as the best play on real diamonds. But Cramer said high-end and low-end jewelry market can work at the same time as we become a class society, and because "at least in the medium term, America is not going to have a strong economy."

Charles & Colvard has posted triple-digit growth since the third quarter of 2004. For 2005, earnings are expected to be up 274%, Cramer said.

"This is the right kind of company with the right kind of product and the right kind of stock," he said.

In response to a question about the high short position in Charles & Colvard, Cramer said the stock "feels a little Hansen (HANS Quote - Cramer on HANS - Stock Picks)-like" in that shorts "don't believe it can get better."

In response to a question about Tiffany (TIF Quote - Cramer on TIF - Stock Picks), Cramer said he believes Tiffany might be ready to bounce back, and he is "upgrading Tiffany right here, right now."

Water, Water, Isn't Everywhere

A natural resource even more scarce and precious than diamonds is water, said Cramer. That may seem counterintuitive, since 70% of the earth's surface is covered by water. But it costs money to make fresh water potable, and desalinization has yet to become economical on a large scale.

Water consumption in the 20th century has grown at twice the rate of population growth, Cramer said, and over the next 20 years, even the most conservative estimates expect hundreds of billions of dollars will be spent on water infrastructure. Cramer owns Aqua America (WTR Quote - Cramer on WTR - Stock Picks), which operates public water utilities in a number of cities, but Aqua America "doesn't expose you to the massive nature of our water shortage," he said.

A "brilliant way to play the water shortage" is through an ETF, PowerShares Water Resources (PHO Quote - Cramer on PHO - Stock Picks) Cramer said. PHO, which just launched this week, is composed of 64% small-cap stocks, but also contains large companies such as Suez (SZE Quote - Cramer on SZE - Stock Picks) and Veolia Environnement (VE Quote - Cramer on VE - Stock Picks).

Don't pay up for PHO, though, said Cramer. An ETF is simply a basket of stocks trading as one stock. (Check out this Street.com article for more information on this ETF.)

In response to a question about an international water play, Cramer said Suez would be the way to play it.

Cramer also said that Walter Industries' (WLT Quote - Cramer on WLT - Stock Picks) plan to spin off its water business is a great idea.

Pick of the Week

Cramer's "Pick of the Week" is Salesforce.com (CRM Quote - Cramer on CRM - Stock Picks). The company makes customer relationship management software that competes with Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks), SAP (SAP Quote - Cramer on SAP - Stock Picks) and Oracle (ORCL Quote - Cramer on ORCL - Stock Picks). Salesforce.com's advantage is it can deliver its software entirely over the Web, Cramer said.

CRM software was a $3.5 billion market in 2004, and Salesforce.com has just 3.2% market share. But the market for Web-based, on-demand CRM software is growing faster than the traditional market, which means Salesforce.com can't help but to pick up market share, Cramer said.

The stock isn't cheap, he noted, but it's worth a premium for its growth and for the fact the company has never missed earnings. An added bonus is the fact the stock doesn't get the coverage it deserves on Wall Street, he said. So, "get in now before it becomes the darling of every growth fund in town."

Nucor CEO Chats

Daniel DiMicco, CEO of steelmaker Nucor (NUE Quote - Cramer on NUE - Stock Picks), joined Cramer by telephone. Cramer asked DiMicco if steel imports were threatening Nucor's pricing.

"There's always risk out there in any business," said DiMicco.

"You just boosted the dividend. That to me says you've got confidence," said Cramer.

DiMicco said he is "very, very confident in the future of this company. We've weathered storms before and come through them extremely strong."

Cramer asked about Nucor's interest in Canadian steel producer Dofasco. "I don't want you doing that...you're not going to do any of this takeover game, are you?" asked Cramer. "You're not going to do an overpay, right?"

"We have a very disciplined acquisition strategy," said DiMicco. "We will not overpay." DiMicco said his company has a great track record of acquisitions, and "that won't change."

Cramer summed up the interview saying a recent downgrade of Nucor by J.P. Morgan was arbitrary and wrong, and he believes the stock is headed higher.

Closing Thoughts

Commenting on news after the close, Cramer said Intel's (INTC Quote - Cramer on INTC - Stock Picks) quarterly update was unimpressive.

Cramer also isn't enamored with Electronic Arts' (ERTS Quote - Cramer on ERTS - Stock Picks) acquisition of Jamdat Mobile (JMDT Quote - Cramer on JMDT - Stock Picks). "Why'd you have to go and do that?" he asked.

Finally, Cramer is now blessing Chesapeake Energy (CHK Quote - Cramer on CHK - Stock Picks) "because they did their gigantic equity offering that I so feared."

Lightning Round

Bullish

Cramer was bullish on Toyota Motor (TM Quote - Cramer on TM - Stock Picks), El Paso (EP Quote - Cramer on EP - Stock Picks), Chesapeake Energy (CHK Quote - Cramer on CHK - Stock Picks), Ingersoll-Rand (IR Quote - Cramer on IR - Stock Picks), Caterpillar (CAT Quote - Cramer on CAT - Stock Picks), Deckers Outdoor (DECK Quote - Cramer on DECK - Stock Picks), Texas Instruments (TXN Quote - Cramer on TXN - Stock Picks), OraSure Technologies (OSUR Quote - Cramer on OSUR - Stock Picks), Bank of America (BAC Quote - Cramer on BAC - Stock Picks), First Marblehead (FMD Quote - Cramer on FMD - Stock Picks), Schering-Plough (SGP Quote - Cramer on SGP - Stock Picks), Genentech (DNA Quote - Cramer on DNA - Stock Picks), American Science & Engineering (ASEI Quote - Cramer on ASEI - Stock Picks), Thermo Electron (TMO Quote - Cramer on TMO - Stock Picks), L-3 Communications (LLL Quote - Cramer on LLL - Stock Picks), Radiant Systems (RADS Quote - Cramer on RADS - Stock Picks), Hewlett-Packard (HPQ Quote - Cramer on HPQ - Stock Picks), Plum Creek Timber (PCL Quote - Cramer on PCL - Stock Picks), Weyerhaeuser (WY Quote - Cramer on WY - Stock Picks), Oshkosh Truck (OSK Quote - Cramer on OSK - Stock Picks), Salesforce.com (CRM Quote - Cramer on CRM - Stock Picks), Sify (SIFY Quote - Cramer on SIFY - Stock Picks) and China Mobile (CHL Quote - Cramer on CHL - Stock Picks).

Bearish

Cramer was bearish on General Motors (GM Quote - Cramer on GM - Stock Picks), Olympic Steel (ZEUS Quote - Cramer on ZEUS - Stock Picks), Pfizer (PFE Quote - Cramer on PFE - Stock Picks), Bristol Myers Squibb (BMY Quote - Cramer on BMY - Stock Picks), Merck (MRK Quote - Cramer on MRK - Stock Picks), H&R Block (HRB Quote - Cramer on HRB - Stock Picks), Flamel Technologies (FLML Quote - Cramer on FLML - Stock Picks), NCR (NCR Quote - Cramer on NCR - Stock Picks), United Natural Foods (UNFI Quote - Cramer on UNFI - Stock Picks), Abraxas Petroleum (ABP Quote - Cramer on ABP - Stock Picks), International Paper (IP Quote - Cramer on IP - Stock Picks), Rambus (RMBS Quote - Cramer on RMBS - Stock Picks), Ford (F Quote - Cramer on F - Stock Picks), Oracle (ORCL Quote - Cramer on ORCL - Stock Picks), EMC (EMC Quote - Cramer on EMC - Stock Picks), Cisco Systems (CSCO Quote - Cramer on CSCO - Stock Picks), RPC (RES Quote - Cramer on RES - Stock Picks), Sun Microsystems (SUNW Quote - Cramer on SUNW - Stock Picks), Dell (DELL Quote - Cramer on DELL - Stock Picks), William Lyon Homes (WLS Quote - Cramer on WLS - Stock Picks) and China Techfaith Wireless (CNTF Quote - Cramer on CNTF - Stock Picks).

For more of Cramer's commentary during the Lightning Round, click here.

Here's your chance to pick the stock you'd like me to feature on my radio show Dec. 15:
Apple
Dell
Ford
Tivo
Toll Bros.
Sun Micro

REMEMBER to listen in on Thurday for my take on the stock that wins this poll!