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Cramer's 'Mad Money' Recap: Misery Loves Usury

TheStreet.com Staff

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

"On 'Mad Money' we reserve the right to profit from anything, no matter how heinous," Jim Cramer told viewers of his TV show Thursday.

Subprime lending might be a problem, but it is not necessarily bad for the economy, he said. Although it's going to be hard for the working class to take out a loan "until the Fed bails them out" of this crisis, Cramer said he sees this as an opportunity to make some money.

Two "great" ways to play the working-class lending crisis are with "pawnbrokers and loan sharks," he said. Folks who can't get loans will likely have to resort to these shops to get cash.

Of the pawn shops, Cramer said he likes Cash America International (CSH - Cramer's Take - Stockpickr). The other, "more morally dubious" loan shark stock he likes is Advance America, Cash Advance Centers (AEA - Cramer's Take - Stockpickr).

Starting with AEA, Cramer said the company is growing and is "cheap, cheap, cheap." The less-risky alternative is Cash America, "the largest player in pawn lending" and a great way to play the subprime lending problem.

"Where others see catastrophe, I see opportunity," Cramer said.

The best way to play the subprime crisis is not to go short New Century (NEW - Cramer's Take - Stockpickr) or to bet against NovaStar (NFI - Cramer's Take - Stockpickr) -- it's to buy AEA or Cash America, he said.

Rooting for Chemed

Cramer continued his search through the rubble of last week's selloff for stocks that don't deserve to be down and should be seen as buy opportunities. On Tuesday's show he offered General Cable (BGC - Cramer's Take - Stockpickr), on Wednesday it was First Solar(FSLR - Cramer's Take - Stockpickr), and on Thursday Cramer suggested Chemed (CHE - Cramer's Take - Stockpickr).

Even though Chemed has "recovered significantly" from the downturn, it is still a buy, according to Cramer, for one main reason: It reported great earnings and guidance right before the market downturn.

Both of Chemed's divisions -- its Vitas hospice operation and its Roto-Rooter plumbing business -- are good, but "the real story is about the earnings," he said. "We like it because it blew away its numbers when it reported Feb. 21, a week before the selloff."

After reporting its quarter, Chemed jumped almost $7 in a day, and last week's selloff took it down $2, Cramer said. Although that's not a significant pullback, he said he believes the stock is "immunized against recent downside," and he would buy it "before it gets its mojo back."

Sell Block

In the show's "Sell Block" segment, Cramer looked back at some recent initial public offerings. He told viewers to sell Fortress (FIG - Cramer's Take - Stockpickr) and instead pick up Goldman Sachs (GS - Cramer's Take - Stockpickr), a stock he owns for his Action Alerts PLUS charitable trust and believes is "cheaper and a better company."

Cramer also suggested people sell Melco PBL Entertainment (MPEL - Cramer's Take - Stockpickr) and IPG Photonics (IPGP - Cramer's Take - Stockpickr) "on any strength."

"Melco has been an unmitigated disaster ... and I apologize for getting this one wrong," he said. And IPG Photonics wasn't a great call either. "I'd cut my losses and take profits."

Although Cramer said he has no excuse for his Melco recommendation, he said he "extrapolated" it from Wynn (WYNN - Cramer's Take - Stockpickr) and Las Vegas Sands (LVS - Cramer's Take - Stockpickr), thinking that Melco would follow in their footsteps.

However, it is a good thing he told viewers to stay away from Artes Medical (ARTE - Cramer's Take - Stockpickr) because the stock hasn't been doing well, Cramer pointed out.

Right now he said he would be buying Switch & Data Facilities (SDXC - Cramer's Take - Stockpickr), which he believes should have "positive news flow in the near term" and which he believes is "cheap" compared with its competitors.

Cramer said he would also buy AeroVironment (AVAV - Cramer's Take - Stockpickr), "a great defense play," and Opnext (OPXT - Cramer's Take - Stockpickr), but only on weakness.

AT&T for the Long Distance

Cramer welcomed AT&T (T - Cramer's Take - Stockpickr) CFO Rick Lindner to the show and asked him how the company is able to build out its network, put more money into AT&T Wireless and increase its dividend, all at the same time.

"First of all, we've done three large acquisitions in the past three years," which have given the company "tremendous opportunities for merger synergies," Lindner responded. "And those synergies are driving double-digit growth."

On top of that, AT&T is not just a cost reduction story, he went on to say. The company also has "some exciting new products coming" and great growth in wireless and data services.

Cramer said that although he does not often recommend long-term stocks, he thinks people "can buy AT&T and put it away." He advised people to buy it because it has a "great" yield and is a "well-run" company.

To view Cramer's interview with Rick Lindner, please click here.

Sudden Death

During the show's "Sudden Death" round, Cramer was bullish on Ceradyne (CRDN - Cramer's Take - Stockpickr), Union Pacific (UNP - Cramer's Take - Stockpickr) and Goldman Sachs (GS - Cramer's Take - Stockpickr); he owns the last two for his charitable trust.

He was bearish on Jefferies (JEF - Cramer's Take - Stockpickr) and Force Protection (FRPT - Cramer's Take - Stockpickr).

Lightning Round

Cramer was bullish on Saks (SKS - Cramer's Take - Stockpickr), Sprint Nextel (S - Cramer's Take - Stockpickr), GlobalSantaFe (GSF - Cramer's Take - Stockpickr), Transocean (RIG - Cramer's Take - Stockpickr), Halliburton (HAL - Cramer's Take - Stockpickr), Logitech International (LOGI - Cramer's Take - Stockpickr), Dean Foods (DF - Cramer's Take - Stockpickr), Genzyme (GENZ - Cramer's Take - Stockpickr), Gilead (GILD - Cramer's Take - Stockpickr), Celgene (CELG - Cramer's Take - Stockpickr), Walter Industries (WLT - Cramer's Take - Stockpickr), Baxter International (BAX - Cramer's Take - Stockpickr), Bard (BCR - Cramer's Take - Stockpickr), MasterCard (MA - Cramer's Take - Stockpickr), Emerson Electric (EMR - Cramer's Take - Stockpickr), Parker Hannifin (PH - Cramer's Take - Stockpickr), Illinois Tool Works (ITW - Cramer's Take - Stockpickr), Vail Resorts (MTN - Cramer's Take - Stockpickr) and Regal Entertainment (RGC - Cramer's Take - Stockpickr).

Cramer was bearish on Global Industries (GLBL - Cramer's Take - Stockpickr), RF Micro Devices (RFMD - Cramer's Take - Stockpickr), Acorda Therapeutics (ACOR - Cramer's Take - Stockpickr), Research In Motion (RIMM - Cramer's Take - Stockpickr), ExpressJet (XJT - Cramer's Take - Stockpickr), Bristol-Myers (BMY - Cramer's Take - Stockpickr), Pioneer Drilling (PDC - Cramer's Take - Stockpickr) and Take-Two Interactive (TTWO - Cramer's Take - Stockpickr).

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

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