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Cramer's 'Mad Money' Recap: Three Stocks With Global Heft

TheStreet.com Staff

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

While Brazil, Russia, India and China (BRIC) are still in their prime, it's time to retire the investing strategy, Jim Cramer told viewers of his "Mad Money" TV show Wednesday.

Market players still need to have foreign exposure, but "BRIC just doesn't cut it anymore," he said. The rest of the world, or ROW, as Cramer calls it, is better than BRIC.

For a while BRIC was "it" because two things happened, he said. First, the U.S. government "betrayed its rapacious capital principles," hiking short-term interest rates several times. And second, "housing fell off a cliff," Cramer said.

These factors made for an ailing U.S. economy but made BRIC look hot, he said. However, as "investors ran into the arms of BRIC," it was not able to contain the heat. As a result, growth started sprouting up in ROW, Cramer explained.

"I've scoured the country for industrial stocks that get close to half of their sales from ROW" and come up with three stocks that "could serve as paradigms that people should want to own now," he said. These are the stocks Cramer believes are no longer "held hostage by the U.S. economy."

Catch Caterpillar

Cramer's No. 3 ROW pick, he said, is Caterpillar (CAT - Cramer's Take - Stockpickr), an "all-American company" that gets 48% of its sales from the rest of the world. In addition, more than half of Caterpillar's manufacturing plants are in the ROW, too, Cramer said.

"It is cyclical, but not totally levered to the U.S.," he said. "It is the year people will recognize that Caterpillar is more than a housing play."

"The U.S. is just not where the action is," Cramer continued. "The whole world is growing ... and leaving the U.S. behind."

That's why a company like Caterpillar is worth "snagging a piece of," he said.

DuPont's a Do

Another U.S. company that has made itself an international player is Cramer's No. 2 ROWer -- DuPont (DD - Cramer's Take - Stockpickr), the "big daddy chemical company."

In the fourth quarter of 2006, 65% of DuPont's business came from ROW, Cramer said.

"I don't want anything industrial that doesn't have international exposure," he said. But beyond international diversification, DuPont is a big consumer of oil, which means it is going to be the "biggest beneficiary" of the year-over-year decline in oil prices, Cramer said.

And the real kicker here is the company's agricultural growth, he noted. Plus, DuPont is also a member of the "global agricultural oligopoly."

DuPont has "gone global," and as "we want American companies to have as little American exposure as possible" until the Fed starts cutting interest rates, it is Cramer's second ROW pick.

United Tech Retake

Cramer's top Rest of World pick is United Technologies (UTX - Cramer's Take - Stockpickr).

The company, with roughly 60% of its revenue coming from outside the U.S., "has all the glorious ROW that we need," he said. While the stock is now clearly in the house of pleasure, there was a time when Cramer went negative on it. For that, said Cramer, United Tech CEO George David made fun of him, and "man was he right" to do so.

When a stock publicly humiliates him, skyrocketing after he goes bearish on it, people should know it's a "real winner," Cramer said.

United Technologies has "great management" and a "phenomenal" aerospace business, which is a huge driver of its international growth, he said. But what Cramer really likes about the company is that United Tech realized it had to diversify away from America and migrate to the rest of the world.

"It didn't want to be held hostage by the Fed," he said.

With United Tech we are moving away from a company like Whirlpool (WHR - Cramer's Take - Stockpickr), which has way too much exposure to the U.S., and moving towards a company like Emulex (ELX - Cramer's Take - Stockpickr), a stock that is not levered to the U.S. and is up huge, Cramer said.

When Cramer bet against United Tech, he lost. After he sold it from his Action Alerts PLUS charitable trust, he momentarily looked like a genius as United Tech went down 3 points, he said. But now it is selling "well above the place" where Cramer sold it and he is determined not to make the same mistake twice with this stock.

Mad Mail & Sudden Death

In the show's "Mad Mail" segment, Cramer told a viewer Viacom (VIAB - Cramer's Take - Stockpickr) "was run like a country club" with too many people working there. He believes people will not miss the 250 workers recently fired from MTV when it comes to Viacom "reporting decent, profitable quarters."

Responding to another mailer, Cramer said that while Microsoft (MSFT - Cramer's Take - Stockpickr) has given its shareholders a special dividend and had a buyback, it is big company so it is difficult to move its price.

During the "Sudden Death" round, Cramer was bullish on Sun Microsystems (SUNW - Cramer's Take - Stockpickr). He was bearish on Teva Pharmaceutical (TEVA - Cramer's Take - Stockpickr) and Novastar (NFI - Cramer's Take - Stockpickr).

Lightning Round

Cramer was bullish on Qualcomm (QCOM - Cramer's Take - Stockpickr), Transocean (RIG - Cramer's Take - Stockpickr), Melco PBL Entertainment (MPEL - Cramer's Take - Stockpickr), C.H. Robinson Worldwide (CHRW - Cramer's Take - Stockpickr), Halliburton (HAL - Cramer's Take - Stockpickr), Goldman Sachs (GS - Cramer's Take - Stockpickr), Sears (SHLD - Cramer's Take - Stockpickr) and Thermo Fisher Scientific (TMO - Cramer's Take - Stockpickr).

Cramer was bearish on BJ Services (BJS - Cramer's Take - Stockpickr), Hudson City Bancorp (HCBK - Cramer's Take - Stockpickr), Expeditors International of Washington (EXPD - Cramer's Take - Stockpickr), NutriSystem (NTRI - Cramer's Take - Stockpickr) and Fortress (FIG - Cramer's Take - Stockpickr).

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.