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Cramer's 'Mad Money' Recap: Top Three Growth Plays for '07

TheStreet.com Staff

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

Jim Cramer has three growth stocks he believes you should own for 2007, even if you hate risk, he said during his "Mad Money" TV show Thursday.

"There's room in anyone's portfolio for a good growth stock," he said.

Cramer opened with his No. 3 growth stock of the year: Cisco Systems (CSCO Quote).

After spending years as a "dead-end" stock, Cisco has finally come back, Cramer said. And even though it is up big since he recommended it on Aug. 8, Cramer said he expects it to "keep running" the whole year, as it has turned itself into a "consumer-oriented tech stock."

"The Cisco of today is not the Cisco of yesterday," he said.

It's no longer a networking backbone play but has penetrated homes by becoming a major competitor in the triple play (video/phone/Internet) market, Cramer said. After spending some time in the "wilderness," Cisco is back as the No. 3 growth stock for 2007, Cramer said.

(This week, Cramer is issuing his annual market forecast. Click here for his top three value picks, which he offered Wednesday.)

Green Apple

Cramer picked Apple Computer (AAPL Quote) as his No. 2 growth stock of 2007.

Although Apple's up more than 175% the last two years and more than 50% since July, Cramer believes Apple Computer will move higher because "picking stocks is not like flipping a coin." There's no balancing out that occurs, he said. Instead, "winners keep winning and "losers keep losing," Cramer said.

Cramer considers Apple a winner that has changed the way people listen to music. Not only is it a brand people trust and love, but it is cool, Cramer continued. Moreover, Microsoft's (MSFT Quote) Zune MP3 player will not be able to push it past Apple, he said.

And now that Apple has set up its operating platform, it should continue to grow with its new iTV and Apple phone products, Cramer said. Because none of the analysts have worked the phone angle into their estimates, Cramer said he expects a "tidal wave" of raised estimates to hit the market soon.

There are always bears and short-sellers, but in Apple's case "they are wrong and should get buried," Cramer said.

The bears have been wrong for the last three years by believing Apple's iPod growth would wear out, and now the company has more growth-drivers than just its iPod, Cramer said. In addition, he believes the options-backdating issue is insignificant and should not affect the stock.

"It has a winning formula, and nothing is going against it."

And the Winner Is ... NYSE Group

Cramer's growth stock for the new year is the NYSE Group (NYX Quote).

"If you're comfortable taking a few risks to make more and more mad money, NYX is for you," he said.

Cramer believes the NYSE will grow, blow away its estimates and "keep flying" because its main objective is to make money. The company is shutting down trading rooms and laying off people, replacing them with faster and cheaper machines.

Cramer said the stock has great revenue growth and a sound cost-cutting strategy, which should save the company millions of dollars. In addition, it has the lowest operating margins of all publicly traded exchanges and "low, beatable estimates," Cramer said.

The only reason NYSE shares are down is because of arbitrage pressure from its pending Euronext acquisition, said Cramer, and that pressure shouldn't last. The NYSE is ready "to conquer the world" and should go to $240 a share, Cramer said.

Mail It In

In his "Mad Mail" segment, Cramer told a viewer to stick with Coach (COH Quote), as he believes it should go higher. However, he warned people against being greedy and advised those who have already made money on it to take some profits.

He also suggested a mailer back up the truck* with Lundin Mining (LMC Quote), and advised another caller to buy Cyberonics (CYBX Quote) under $20. Cyberonics closed at $21.02 Thursday.

Lightning Round

Cramer was bullish on TD Ameritrade (AMTD Quote), Goldman Sachs (GS Quote), Adobe Systems (ADBE Quote), DivX (DIVX Quote), Stryker (SYK Quote) and Coldwater Creek (CWTR Quote).

Cramer was bearish on Yahoo! (YHOO Quote), Valero Energy (VLO Quote), Rentech (RTK Quote) and Allscripts Healthcare Solutions (MDRX Quote).

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

*For all you home-gamers, a 'mon-back opportunity means Cramer would back up the figurative truck and load up on a stock.

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