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Cramer's 'Mad Money' Recap: Tracking Caterpillar

TheStreet.com Staff

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

Caterpillar (CAT Quote) at $63.16 is wrong, "a travesty of a mockery of a sham," Jim Cramer told viewers of his "Mad Money" TV show Friday.

Caterpillar, probably the single best stock people can own this quarter, has everything going for it, yet it's down 14% year over year, he said incredulously. "This is a sale on a best-of-breed stock."

Meanwhile, Terex (TEX Quote) is up. "The market is stupid," Cramer said.

Caterpillar trades like it's levered to housing, he said. But if other construction machinery manufacturers, such as Terex, Cummins (CMI Quote), Paccar (PCAR Quote) and Manitowoc (MTW Quote), are up, then Caterpillar deserves to go higher too, Cramer said.

Caterpillar is a long way from sitting on top of the world, Cramer said, so he wants market players "to ride it up." He believes it shouldn't take long for the stock to catch up and make up for lost time.

Further, people are looking at Caterpillar "all wrong," Cramer said. People should think of it as a company levered to natural resources, not to its minuscule business of new-home sales.

There are two things happening that should be sending the stock higher here, he said. First, commodity prices are on the rise. And second, the unwinding of the yen carry trade is "fantastic" for Caterpillar because this means its competition won't do as well as expected, Cramer said.

In addition, because the company has a $7.5 billion buyback, its current situation shouldn't last, he said. Either the market will take it up or it will take itself up with its huge buyback.

"The great CAT is still sleeping," Cramer said. But it should soon run.

Hope Will Float Nastech

When "Mad Money" first aired two years ago Cramer had the CEO of Regeneron Pharmaceuticals (REGN Quote) on his show.

At that time, Regeneron was a $5 stock. It then went to $24 and settled back to $18. The stock did that, Cramer said, even though it doesn't have a "concrete" product and its revenue is in a decline.

By appearance, Regeneron didn't deserve to go up, but Cramer said he knew it would go higher anyway because biotech stocks are "insane." In the bizarro world of biotech, the worst company could be the best stock because of hopes that it will be worth something one day, Cramer explained.

He believes the next stock in this sector to follow in Regeneron's footsteps will be Nastech Pharmaceutical (NSTK Quote).

People in this business moan when Nastech Pharmaceutical's name is mentioned, Cramer said. It overpromises, underdelivers and is "a comedy of errors." Plus, it doesn't have a single important drug that's ready to come to the market, he said. "It's a joke, just like the last joke I told."

However, Nastech should go higher because it has money in the bank after recently raising cash. Also, although none of its compounds is ready to come to market, "the thing about biotech stocks is that they trade on hope," Cramer said.

The company has finally figured this out, and now that it has the "religion of silence," it should be ready to move, he said. Cramer also likes Nastech because its obesity drug actually helps people lose weight, it has better drug delivery for insulin, and it is the only "pure play" on autism.

He advised people to study Nastech for the weekend before buying it and urged them to use limit orders.

Next Week's Game Plan

For next week's game plan, Cramer advised viewers to make a move on National CineMedia (NCMI Quote) on Monday morning.

The "fast growing" company makes ads for cinemas and has done nothing since it came public, he said, calling it his play on movie theaters.

Moving on, Cramer referred viewers to a report about a $20 billion government phone contract in the The Washington Post. The major players here could be Verizon (VZ Quote), AT&T (T Quote), Sprint (S Quote) and Qwest (Q Quote).

However, because Verizon and AT&T are "too big" to win the contract and Sprint is up on takeover talk, Cramer believes Qwest is the stock that "has the best shot" to win the contract.

In addition, he recommended that investors pull the trigger on AAR (AIR Quote) before it reports on Wednesday, buy General Mills (GIS Quote) "on weakness" ahead of its Thursday earnings and buy Goldman Sachs (GS Quote) "hand over fist" on Monday morning.

Goldman Sachs, which he owns for his Action Alerts PLUS charitable trust, ought to start its "aggressive" buyback Tuesday, Cramer said.

Jones Soda Bubbles

Peter van Stolk, Jones Soda's (JSDA Quote) chairman and CEO, joined Cramer on the show by telephone. Cramer asked him how he hit his quarter out of the park.

"Actually, our team did it. We worked really hard, had great sales and a great introduction to our new product in the 12-ounce can," van Stolk responded. "I think the conversion to pure cane sugar is what's really taken it by the storm."

"One thing that's important to understand about Jones Soda and what gives us, we believe, a competitive advantage is that I can put [a picture] of your loved ones on a bottle of Jones Soda," van Stolk continued. "Pepsi (PEP Quote) and Coca-Cola (KO Quote) can't. We have a patent right."

Cramer said he doesn't believe Jones Soda is done going up.

To view Cramer's interview with Peter van Stolk, please click here.

Lightning Round

Cramer was bullish on First Solar (FSLR Quote), ING (ING Quote), Apple (AAPL Quote), Staples (SPLS Quote), Dick's Sporting Goods (DKS Quote), DaVita (DVA Quote), MGM Mirage (MGM Quote), Las Vegas Sands (LVS Quote), Silver Wheaton (SLW Quote) and Yamana Gold (AUY Quote).

Cramer was bearish on Trina Solar (TSL Quote) and Pre-Paid Legal Services (PPD Quote).

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

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