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Cramer's 'Mad Money' Recap: Put Money Down on Toyota

TheStreet.com Staff

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

The top member of the "Mad Money" foreign legion is Toyota Motor (TM), Jim Cramer told viewers of his TV show Thursday.

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

Today, Ford (F) announced $12.7 billion worth of losses for 2006 from trying to sell cars, he said.

Both it and General Motors (GM) are "suffering" and can't seem to stop losing money.

Ford and General Motors "can only slash production to stop losing money," Cramer said, adding that even when these companies have been profitable, it hasn't been from their car sales.

However, what's bad for General Motors is good for Toyota, which in turn is good for the U.S., because Toyota provides a lot of job opportunities for Americans, Cramer went on to say.

"Toyota doesn't just make cars -- it makes mad money" and is on its way to becoming the biggest auto producer, he said. Even though the auto business is as cyclical as you can get, Toyota is more of a secular story, which means it doesn't depend on how the economy is doing, Cramer said.

Nonetheless, he urged viewers to do their homework, which in this case should tell you to buy the stock.

Cramer said that although Toyota has issues regarding recalls of some of its cars, the problems aren't as bad as those of the competition.

The stock might seem expensive to some, but it dropped nearly $4 Thursday to $131.70, which people should consider taking advantage of, he said.

"If you want to stick with the best, stick with Toyota," said Cramer.

Food for Thought

Cramer welcomed Danny Meyer, restaurateur and author of Setting the Table: The Transforming Power of Hospitality in Business to the show.

Because the book's theme is service, Cramer asked Meyer how he believes people who run small businesses should be treating their customers.

The first thing Meyer said he notices about companies that are performing well is that they've distinguished between service and hospitality. "Hospitality is how you make people feel," he said.

Cramer agreed and said that "the hospitality question is what's driving a lot of the higher multiple brands."

He showed Meyer to a table where food from several different restaurant chains was laid out and asked him which stood out on a food-quality basis.

Meyer said that while restaurant chains might not always serve the best food, many do excel when it comes to their staff and service. That said, Meyer has been very impressed with Chipotle (CMG), not because it's necessarily the best burrito he's going to get in the country, he said, but because he's seen how the company's businesses are run.

"They hire for emotional skills and train for technical skills," he said.

When Cramer expressed his surprise that Meyer picked the Chipotle burrito instead of the Ruth's Chris Steak House (RUTH) steak, Meyer said, "I am fan of Ruth's, as well."

However, its stock might be valued less because in terms of the steak business, there is not a huge amount of great beef in this country, Meyer said.

Moreover, Meyer said he has no idea what has turned McDonald's (MCD) around from a food perspective.

It's likely, Meyer said, that McDonald's was able to turn around not from a burger-and-french-fries standpoint but from a business-and-operations angle. "It has consistently been great at what it's done," he said.

Regarding Darden Restaurants (DRI), Meyer said the company has operates its restaurants with a high degree of consistency.

However, in a place like New York City, where there are hundreds of fine Italian restaurants, he doesn't believe Darden's Olive Garden, for example, can compete.

Sell Block

In his "Sell Block" segment, Cramer said that although Goldman Sachs (GS), which he owns for his charitable trust, Action Alerts PLUS, is down, he's not selling it here.

In fact, Cramer said he got it wrong when he said the company would earn people $15 a share because it ended up earning $19 a share. He said he got the multiple wrong, as well. Currently, the multiple is at 11 and should go to 15, which in turn should cause the stock to earn investors $25 a share, Cramer said.

The best kind of story, he said, is one in which earnings go up and the multiple lags. But in the case of Goldman Sachs, it will catch up, Cramer said.

Further, he urged viewers to do a little schnitzel on Rite Aid (RAD) and Blockbuster (BBI), which are both up significantly since he recommended them.

For all you home gamers, a schnitzel is when you sell some, but not all, of your position in a stock and play with the house's money, Cramer explained. He said that out of 1,000 shares, he would sell 200 and take the gains.

Cramer also advised taking a little -- maybe a quarter of a position -- of eBay (EBAY) off the table if market players bought it at his recommendation on Dec. 7. Constellation Brands (STZ) is a stock, he said, that doesn't deserve anyone's trust. Right here, down $2 from where he likes it, Cramer gave the stock a triple sell.

"If Constellation Brands sold cheap scotch, I wouldn't be caught dead drinking it on my linoleum floor," he said.

Mad Mail

In his "Mad Mail" segment, Cramer told a mailer he considers Genentech (DNA) a better stock than AstraZeneca (AZN).

Responding to another viewer, he said he is sticking with his judgment that Hasbro (HAS) is still a good stock.

Cramer also told another viewer that he doesn't want to own an index fund, and he suggested owning Southern Co. (SO) and Consolidated Edison (ED) instead.

During his "Sudden Death" segment, Cramer was bullish on Reliance Steel & Aluminum (RS) and bearish on First Data (FDC).

Lightning Round

Cramer was bullish on Harley-Davidson (HOG), China Mobile (CHL), Corning (GLW), Allegiant Travel (ALGT), Acuity Brands (AYI), Apple (AAPL), Illumina (ILMN) and ABB (ABB).

Cramer was bearish on Navteq (NVT), Garmin (GRMN), AsiaInfo (ASIA), Shaw Group (SGR), Palm (PALM) and Advanced Micro Devices (AMD).

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.