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Cramer's 'Mad Money' Recap: Diageo Liquor Is Quicker

TheStreet.com Staff

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

Jim Cramer has been naming his top five international stock picks on this week's "Mad Money" TV show.

Continuing Wednesday, Cramer announced Diageo (DEO Quote) as his next foreign-legion member and No. 2 international pick.

Cramer said he likes Diageo so much he owns it for his charitable trust, Action Alerts PLUS.

Not only is the England-based liquor company cheap, it also has a "mighty dividend."

Moreover, Cramer believes that Diageo is still right, even though it has had a 30% move since he first recommended it -- it's a recession-proof stock, he said.

When the economy is down, people don't stop consuming alcohol, and instead are more apt to drink more of Diageo's Johnnie Walker scotch, a bottle of which Cramer wielded on the show. (Cramer also set up a miniature linoleum floor on the show's set, sitting, legs folded, cradling the bottle of Johnnie Walker. He often jokes on Fridays that when his beloved "Mad Money" is over for the week, he has nothing to look forward to except sitting on his linoleum floor drinking cheap whiskey.)

Another reason to buy Diageo is that it's an "indirect play on China" with relatively low risk, Cramer said. In fact, after seeing how much its scotch brands appeal to the people in China, Diageo wants to target Brazil, India and Russia, too, he said.

For those Chinese who aren't able to spend as much on their alcohol, Diageo also has cheaper local brands selling in the country, Cramer said.

Diageo has also been "dominating" the U.S. and has positive volume growth in North America, where all of its brands are either No. 1 or No. 2 in their respective categories, he said.

Plus, Diageo has good marketing and low estimates, which makes this a cheap stock people should buy, Cramer said.

In his "Am I Diversified?" segment, Cramer's first caller named the following five stocks as part of his portfolio: Apple (AAPL Quote), Google (GOOG Quote), Toyota Motor (TM Quote), AIG (AIG Quote) and NYSE (NYX Quote). Cramer owns the latter three for his charitable trust, Action Alerts PLUS.

Am I Diversified?

Cramer blessed the portfolio as diversified and clarified that he doesn't believe that Apple and Google represent a pair because Google is an Internet play, and Apple is pure tech.

His next caller owned AT&T (T Quote), Accenture (ACN Quote), Allscripts Healthcare (MDRX Quote), Goldman Sachs (GS Quote) and Halliburton (HAL Quote), the last two of which Cramer owns for his charitable trust.

Cramer congratulated the caller on having a diversified portfolio.

His last caller asked if owning the following five stocks qualified him as being diversified: Procter & Gamble (PG Quote), Pacific Ethanol (PEIX Quote), Starbucks (SBUX Quote), Lincoln Electric (LECO Quote) and Intel (INTC Quote).

Cramer called the portfolio "perfect," told the caller to stick with his current stocks and told viewers to use these three portfolios as great examples of how to diversify.

Go Gap

Cramer told his viewers that stocks talk -- and sometimes even scream -- but that market players don't know how to listen.

Right now everything that the Gap (GPS Quote) is saying is "crystal clear," he said. It's saying that it is going higher and is thus a "triple buy."

Even though he's hated the Gap more and harder than anyone else, Cramer said all that has now changed. The stock reported the worst quarter he's seen, had "horribly deteriorating" cash flows and, to top it off, its CEO, Paul Pressler, recently resigned.

But despite all that, the stock just won't go down.

Rule No. 1 when listening to a stock is that if it doesn't slide on bad news, it's going higher, Cramer said.

But this isn't reason enough to buy the Gap here, he said. People also need to figure out why.

Cramer believes that the stock is going higher because his favorite retail analyst, Dana Cohen, said the stock could go to $25. The Gap closed at $19.38 Wednesday.

Even though its balance sheet might not be so hot, retail turnarounds do happen, he said, advising investors to look at J. Crew (JCG Quote) and Gucci as examples.

And the second clue that the Gap should go higher is that "there is a ton of private-equity money sloshing around," Cramer said. The clock is ticking for the private-equity people to put their money to use, and it's likely they will buy a company such as the Gap.

Therefore, Cramer sees two scenarios that could cause the Gap to go higher. First, there could be a turnaround when a new CEO takes the place of the old.

And second, one of the many private-equity firms looking to execute this deal could take the Gap private.

In his "Mad Mail" Segment, Cramer advised a viewer to get out of Plantronics (PLT Quote) because he considers it "too commodity-focused."

Responding to another mailer, he gave the World Wrestling Entertainment (WWE Quote) two thumbs up and said even though it's done little, he regards it as a "great play."

During his "Sudden Death" round, Cramer was bullish on Copart (CPRT Quote), Veolia Environnement (VE Quote) and AIG (AIG Quote), which he owns for his charitable trust.

He was bearish on Home Solutions of America (HSOA Quote).

Lightning Round

Cramer was bullish on Boeing (BA Quote), Transocean (RIG Quote), Halliburton (HAL Quote), NYSE (NYX Quote), Hain Celestial (HAIN Quote), USG (USG Quote), Level 3 Communications (LVLT Quote), Schering-Plough (SGP Quote), Johnson & Johnson (JNJ Quote), Amgen (AMGN Quote), Genentech (DNA Quote), Johnson & Johnson (JNJ Quote), American Ecology (ECOL Quote), Unilever (UN Quote), Diageo (DIA Quote), Rackable Systems (RACK Quote) and eBay (EBAY Quote).

Cramer was bearish on Valero Energy (VLO Quote), SunOpta (STKL Quote), Georgia Gulf (GGC Quote), Pfizer (PFE Quote) and Republic Services (RSG 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 popular book by clicking here.