Mad Money Recap

Return to Article

Cramer's 'Mad Money' Recap: The Desired Dozen

TheStreet.com Staff

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

"Tonight's show is dedicated to my favorite Disney (DIS) attraction: It's a small world," Jim Cramer told viewers of his "Mad Money" TV show Thursday.

On Wall Street, it is a small world because there's a small universe of stocks that are so loved that the hedge funds and mutual funds just can't get enough of them, he said. On most days, these stocks go higher, but now the market is coming down, so "it's time for you to get a piece of them," Cramer told viewers.

In the last half-dozen years, things have changed radically on Wall Street, he explained. There are some big trends that have contributed to making up this small world of stocks every fund manager wants to buy.

The first trend is that positions taken by mutual funds need to be bigger when they come into the market, Cramer said. They can't just buy 100,000 shares. It doesn't work anymore, he said. Instead, they need to buy millions of shares to make an impact.

And second, the stocks of the companies everyone wants to own are shrinking as companies continue to retract their stocks, Cramer said. As fund- and company-buying overwhelms supply, these stocks are soaring higher.

This is the anatomy of stocks that are going up, he said. "It's supply being overwhelmed by demand." And given that everyone knows that the funds are "rapacious" about these stocks, nobody wants to sell them, Cramer said.

Richer by the Dozen

The small world of hedge funds and mutual funds have a dozen stocks that they are propelling to new highs daily. These dozen stocks are the ones benefiting from the new trends.

"These are the ones the big boys want to own," and viewers should want to own them too, Cramer said.

The first name Cramer gave from his dirty dozen list for people to consider is Whirlpool (WHR).

Whirlpool has retired so many shares that it acts more like a small capitalization stock, he said. Plus, it has a big business in Brazil that, after not doing so well, is now "on fire."

The second business is Black & Decker (BDK), a stock that is seeing the same shrinkage as Whirlpool, Cramer said. This is also trading more like a small-cap stock because the mutual funds need to buy much more of it to make a meaningful position, he said.

Next on the list is Allegheny Technologies (ATI), which has a total of 94 million shares that trade. The company makes high-tech steel, the kind ethanol needs to be shipped in. Fund managers want to be in this stock, and so should you, Cramer told viewers.

No. 4 is General Cable (BGC), a play off cable companies wanting their wiring underground. Wall Street, he said, has a "voracious appetite for this stock that can't be satisfied."

Cramer named Honeywell (HON) as his fifth dirty dozen stock and said it is the largest-cap name of the small-cap plays he's naming off his list. Honeywell is playing the aerospace market and is a stock people should consider, Cramer said.

American Standard (ASD) was Cramer's next stock on the list. This one, he said, is being split into three companies. "Buy one, you get two for free."

Moving on, Johnson Controls (JCI) is a stock in the auto sector that is actually worth buying, Cramer said. This company has only 197 million shares trading, he added.

Cramer's eighth and ninth picks were McDermott (MDR) and Foster Wheeler (FWLT). These are two infrastructure plays he said he likes because of their exposure to the Middle East.

Picks 10 and 11, Caterpillar (CAT) and Terex (TEX), are a pair as well, Cramer said.

The players hiring McDermott and Foster Wheeler to build are turning to Caterpillar and Terex for equipment, he said.

And finally, rounding off Cramer's dirty dozen list was Deere (DE). This is the new oil service company, he said, adding that he believes it's in for the same upside as Schlumberger (SLB).

Sell Block

During his "Sell Block" segment, Cramer told viewers he's no longer on the fence about HealthSouth (HLS). It's time to sell this stock, he said.

After the company's "stinker" quarter, Cramer said he would put it in the category of Ford (F) and General Motors (GM) during their "bad days."

Cramer also said he's beginning to worry about a backlash on drug stocks. He advised that viewers should not be greedy and should take gains in Novo Nordisk (NVO).

Further, although McDermott, Foster Wheeler and Fluor (FLR) are up big since he recommended them, Cramer said he wouldn't sell them just yet.

He suggested selling Foster Wheeler, which closed at $87.89 today, at $100; McDermott, which closed at $67.51, at $75; and Fluor, which closed at $102.50, at $115.

Moving on, CVS (CVS) is "so good," Cramer said, that he wants to buy it for his charitable trust, Action Alerts PLUS.

In addition, Cramer said he wouldn't worry about Dynegy (DYN), even though its earnings weren't as strong, because he believes it is a good long-term play.

And he said Cisco Systems (CSCO) is still one of his favorite stocks and he's not changing his mind about it. Cramer said he had no idea its domestic business was so weak, but it's not enough to make him go negative on the stock. It's a great business and has a lot of cash, and he said he wouldn't sell it. In fact, Cramer said, he would buy Cisco.

Qwest for Respect

Richard Notebaert, Qwest Communications' (Q) chairman and CEO, joined Cramer on his show, and Cramer asked him if he believes that after all of Qwest's hard work it has been able to regain its respect.

The respect for Qwest is back, Notebaert responded. "I don't think you ever get done working on your reputation," so Qwest still has a lot of work to do, "but we've come a long way."

Notebaert went on to say that not every company in the telco group needs to be bought. But at the same time, he said, there is no doubt there is going to be further consolidation in the sector.

When Cramer asked about the company's dividend prospects, Notebaert said that "as the year unfolds, we're going to look for further ways to reward our shareholders."

Further, when asked about his retirement plans, the chief executive asked people to remember that when he retired in 2000, he made it only eight months before coming back.

Cramer blessed picking up some Qwest.

To view Cramer's interview with Richard Notebaert, please click here.

Lightning Round

Cramer was bullish on Terra Nitrogen (TNH), St. Jude Medical (STJ), Crocs (CROX), Las Vegas Sands (LVS), Chipotle Mexican Grill (CMG), Jack in the Box (JBX), Helmerich & Payne (HP), Ceradyne (CRDN) and Spartan Motors (SPAR).

Cramer was bearish on Metabolix (MBLX), Eastman Chemical (EMN), CKE Restaurants (CKR), Delta Airlines (DAL), Vail Resorts (MTN) and Syntax-Brillian (BRLC).

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

Sudden Death

During his "Sudden Death" round, Cramer was bullish on eBay (EBAY), Navteq (NVT) and Ultra Petroleum (UPL).

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

Pop Quiz! Are you a loyal "Mad Money" viewer? Take TheStreet.com's latest "Mad Money" culture quiz to see how much of the show you've caught this week or just to immerse yourself in Cramer's nonfinancial madness.