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Cramer's 'Mad Money' Recap: Ride NYSE-Euronext Success

TheStreet.com Staff

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"At the beginning of January, I named my three stocks of the year," Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

He named Altria (MO Quote), which he owns for his charitable trust, Action Alerts PLUS, as his value stock of the year, Level 3 Communications (LVLT Quote) as his speculative stock and NYSE Group (NYX Quote) as his growth stock for 2007, with two runners-up in each category.

Even though Altria is down a bit and the NYSE has not moved, Cramer said he's not backing away and suggested backing up the truck for all three, especially NYSE.

NYSE has been "crushed" because of "arbitrage pressure," he explained, which means people have been buying shares of Euronext and selling NYSE to make an "itsy-bitsy profit on the merger."

But now the merger can finally close next week, and Cramer believes NYX is going to be a "kicking and screaming" stock. The bears are not going to be able to ignore it when the deal is completed, he said. The "bum analysts" are going to have to raise their earnings estimates for next year.

"I believe that you have to buy NYX now before we see the pin action of the analysts capitulating" and because of the short squeeze that should occur because of a dearth of supply, Cramer said. "At $93 and change, I see NYX jumping back to at least its 52-week high of [more than] $110 a share."

It's time to back up the truck on NYX, he said.

Benefit of the Doubt II

In his new "Benefit of the Doubt" segment, Cramer told viewers that when it comes to consumer products and retail, people can't simply bank on monthly sales numbers. With the benefit of the doubt, market players can predict which CEOs will make their numbers and which will miss them, he said.

Even the best CEO misses the numbers sometimes, Cramer said, and he's here to tell people when the "miss" matters and when it shouldn't.

He added J.C. Penney's (JCP Quote) Myron Ullman to his BOD list.

Explaining the addition, Cramer said that on Feb. 22, J.C. Penney reported a quarter that Ullman wasn't happy with. However, the CEO told people not to worry and that the company would be back on track come March, Cramer said.

But market players didn't trust Ullman, and analysts downgraded the stock, sending it to $77 a share.

But now the stock is at $81, and the retailers numbers are coming in just as Ullman promised, Cramer said. If investors had trusted Ullman, they could have made some money, he said. Cramer believes that J.C. Penney is "headed for new highs," and he says that the next time it reports disappointing numbers, if Ullman says not to worry, then don't. Instead, buy the stock, Cramer said.

The next addition to the BOD list was a name that Cramer himself hadn't given the benefit of the doubt: Federated Department Stores' (FD Quote) Terry Lundgren.

"At first I trusted him, then I turned my back on him, and then he made me look like a fool for doubting him," Cramer said.

Last year Lundgren missed his quarter "big" and said it wouldn't happen again, Cramer said. While at first Cramer said he believed the CEO, he was "racked with indecision and doubt" and finally gave up on Federated in December.

But Lundgren was right, and investors who believed him made some money. Cramer said he's not doubting Lundgren again and that people should learn from his mistakes and give both Lundgren and Ullman the benefit of the doubt.

A while back, a viewer from Mississippi called in asking about Harris Stratex Networks (HSTX Quote), but Cramer wasn't familiar with the stock and said he'd get back to it.

Now, after doing his homework, Cramer believes that Harris Stratex's parent company Harris (HRS Quote) is a better stock to own. He advised selling the child, Harris Stratex, and buying the parent, Harris.

Though Cramer doesn't consider Harris Stratex's business of microwave radios to be that strong, he called Harris "sweet." Its other businesses, which include government communications systems, RF communications and broadcast, "are very strong," he said.

Harris recently won a five-year, $600 million contract from the U.S. Census Bureau for "field data collection automation, and its broadcast division is the "best play on Earth for the penetration of HDTV," Cramer said.

Home Theater

Cramer welcomed Vincent Sollitto, the CEO of Syntax-Brillian (BRLC Quote), a pure play on HD, onto the show and asked him how good business is for the company right now.

"It's booming," Sollitto responded. The company's Target (TGT Quote) sales are doing well, and the marketing campaign and good product reviews have gone a long way to create demand in the store, he said.

When Cramer asked if the slowdown in the housing market has affected Syntax-Brillian, Sollitto said it hasn't. Instead, people are sticking with their houses, remodeling them and adding higher-quality home theaters to make them better, Sollitto said.

There has been a "tremendous" movement in the home theater market, Sollitto added. "I think it is a great time for us."

Cramer said he's going bullish on the stock but didn't give two thumbs up because he believes that Syntax-Brillian is too speculative.

To view Cramer's interview with Vincent Sollitto, please click here.

During his "Sudden Death" round, Cramer was bullish on General Maritime (GMR Quote).

Lightning Round

Cramer was bullish on Nastech Pharmaceutical (NSTK Quote), Transocean (RIG Quote), CMGI (CMGI Quote), J.C. Penney (JCP Quote), Williams Companies (WMB Quote), Natco (NTG Quote), National Oilwell Varco (NOV Quote), Movado (MOV Quote), Landec (LNDC Quote), Archer-Daniels-Midland (ADM Quote), Monsanto (MON Quote), Freeport-McMoRan (FCX Quote), Southern Copper (PCU Quote) and Buffalo Wild Wings (BWLD Quote).

Cramer was bearish on Pioneer Drilling (PDC Quote) and American Eagle Outfitters (AEO 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.