Mad Money Recap

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Cramer's 'Mad Money' Recap: Foreign-Stock Policy

TheStreet.com Staff

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

Although the U.S. has the only "government that is of, by and for the corporations," Jim Cramer told viewers of his "Mad Money" TV show Monday that he blesses market-players who dedicate up to 20% of their portfolios to international companies.

"The best reason to go overseas is that we stop being hostage" to what the Federal Reserve might or might not do, he said.

And even though investors might see bumpiness in a few of the emerging markets, such as Brazil, Cramer said there was no need to fear them.

He said he prefers Brazil-based Companhia Vale do Rio Doce (RIO Quote) as the single best play in the mining group, rather than BHP Billiton (BHP Quote) and Rio Tinto (RTP Quote).

One of the main reasons Cramer likes CVRD, he said, is because it recently acquired Canada-based Inco. The deal represents "the best in anticompetitive behavior" as CRVD was able to obtain a "hammerlock on nickel," he said.

Because Cramer believes that the acquisition has turned a competitive market into a near monopoly, he called CRVD a "mineral powerhouse."

He also said that because of CVRD's new Canadian exposure, investors can exempt the stock from his general rule of treating Latin American stocks as trades.

Not only is CRVD "dirt cheap," but if nickel prices increase, it could also be a "real winner," Cramer said, adding that he sees "endless upgrades" on the horizon for CRVD.

Oil-Slip Salvage

The market witnessed a slide in Oil Services Holdrs (OIH Quote) last week because of the fall in oil prices, Cramer told viewers.

"The whole industry looked positively dead," but then Thursday it all turned around -- even as oil was plummeting, he said.

Schlumberger (SLB Quote) raised its dividend by 40% and reported a "ridiculously good" quarter, which caused the stock to rise and turned the sector around, Cramer said.

Schlumberger, "the most conservative oil-service stock in town," severed the connection between oil-service stocks and the short-term price fluctuations of oil and "turned the bears into buyers," he said.

Particularly, Cramer said, the company said three things in its conference call that gave market players visibility and the confidence to bank on oil-service stocks based on their future.

First, Schlumberger explained that the need for oil-service stocks is still present even if oil prices are down, he said. The company also reassured investors that the price of oil would not go back to the $30s and $40s and that more drilling should be needed to produce the same amount of oil.

Last, Schlumberger said it expects to see "consistent high growth through the end of the decade," Cramer said.

Based on this call, oil-service stocks, particularly international ones, are buys on weakness. However, Cramer added that he was more concerned about the domestic oil drillers.

Big Feather for Capital One

Capital One Financial (COF Quote), which Cramer owns for his charitable trust, Action Alerts PLUS, is a triple buy, he told his viewers.

Even though the company offered earnings guidance that was worse-than-expected last Thursday, it turns out there was nothing to fear and the stock "reversed hard" on Friday, moving from $73 to $79, Cramer said.

The move, he explained, was because the guidance didn't matter in this case. Rather, it was the delinquencies that made the difference. While the shorts were betting heavily against Capital One for the long term and thought the credit card company would report a larger-than-expected increase in delinquencies, Capital One's delinquencies actually fell, Cramer said.

That's the reason for Friday's turnaround, he said.

Although Capital One may have reported low earnings estimates, by lowering its delinquencies it increased its multiple, he said.

Moreover, with fewer delinquencies, Capital One's earnings are more "trustworthy," which makes it a cheap stock and a triple buy in Cramer's book.

Armor Amour

Cramer welcomed Ceradyne (CRDN Quote) CEO Joel Moskowitz to the show and asked him if shareholders should be scared about the recent Friedman Billings' report claiming a big demand drop for body armor.

"You should not be scared," Moskowitz said. "We have more orders for armor going into 2007 than we've had in the history of the company."

Moreover, Moskowitz said that the company has had "extended conversations" with the U.S. government regarding what it needs for 2007 and 2008, and from those conversations, Ceradyne has been led to believe that the company is in "solid shape," as far as armor goes.

Cramer said he believes that Ceradyne is a "money maker" and said he is going to stick with the bull case on this one.

To view Cramer's interview with Joel Moskowitz, please click here.

Lightning Round

Cramer was bullish on Rite Aid (RAD Quote), China Mobile (CHL Quote), Genentech (DNA Quote), Amgen (AMGN Quote), Celgene (CELG Quote), Flir Systems (FLIR Quote), Nice Systems (NICE Quote), Google (GOOG Quote), Melco PBL Entertainment (MPEL Quote), SkyWest (SKYW Quote) and Under Armour (UA Quote).

Cramer was bearish on China Unicom (CHU Quote), Flextronics International (FLEX Quote), Nektar Therapeutics (NKTR Quote), Pfizer (PFE Quote), Force Protection (FRPT Quote) and Imergent (IIG Quote).

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

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