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Cramer's 'Mad Money' Recap: When Buffett and Cramer Concur

TheStreet.com Staff

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

"Looking at great investors for ideas of what to buy will rarely steer you the wrong way," Jim Cramer told viewers of his "Mad Money" TV show Thursday.

At the same time, people should still do their homework before blindly piggybacking off a master money manager.

Everyone wants to invest like Warren Buffett, he said. "But is it desirable? Will it make you money or hurt you?"

A visitor on Stockpickr.com came up with a review of Warren Buffett's stock picks that was so popular it crashed the site.

Cramer liked the idea so much he said he's devoting two segments of today's show to it.

"I want to teach you to become a better, more effective piggybacker," he said.

The first Buffett stock he called out was Burlington Northern Santa Fe (BNI), the best railroad for moving coal.

"Buffett is dead-on" with BNI, Cramer said. Coal is king, and BNI is among the quartet of rails that has banished competition in the sector by dividing the country up into different sections, in which each can operate and raise prices.

Second is Coca-Cola (KO), he said. Though this stock has been "really crummy" for a long time, it's the right place to be right now.

The beverage company's CEO, Neville Isdell, has transformed Coke with new products such as Coke Zero, which will help drive the stock higher.

Cramer believes that Buffett's next pick, Procter & Gamble (PG), has lost its way. He said he would rather own Colgate-Palmolive (CL), after years of touting P&G.

Moving on, Cramer said Wal-Mart (WMT) has been a company he's "despised" for the last 15 years. But because it has stopped putting up new stores, and after its recent $15 billion buyback, he likes it.

"Buffett is onto something with Wal-Mart," Cramer said. "I'm following him on it."

USG (USG), on the other hand, is heavily levered to housing, he said. Housing is "awful," and even if people have a long-term focus, like Buffett does, on USG, there's no reason to go through the pain and own it now.

"Someday, USG will be right," Cramer said. But in the 16- to 18-month time period he's looking at now, USG doesn't look like it's worth owning, he said.

Cramer does like American Express (AXP), which, he pointed out, is even cheaper than MasterCard (MA). He believes that American Express, which closed at $62.66 Thursday, will finish the year at $72.

Further, Cramer said he has "nothing but respect" for best-of-breed Wells Fargo (WFC), which is also part of Buffett's portfolio.

And although Buffett's Moody's (MCO) pick is "controversial," Cramer feels that he's right about it. "This one is worth owning" because of its solid duopoly in the ratings business and the fact that it could be taken over.

As for Johnson & Johnson (JNJ), Cramer doesn't understand why Buffett owns it, because it doesn't have much of a pipeline. Maybe Buffett likes it as a play on a great American franchise, Cramer said, but most of its products are drugs and medical devices, not Band-Aids. In addition, until 2012, JNJ has a drug a year going off patent.

More Buffet Bets

ConocoPhillips (COP) and Union Pacific (UNP) are both Buffett-owned stocks Cramer that encourages viewers to buy. UNP, which he owns for his charitable trust, Action Alerts PLUS, is his rail of choice for value, and COP is a triple-buy, he said.

Furthermore, Cramer said, he considers US Bancorp (USB) "a serious buy" because of the stock's great yield and big buybacks and because it has consistently raised its dividend over the past few years. On the other hand, Cramer called Buffet stock M&T Bank (MTB) "scary" and said would get out of it.

In contrast,American Standard Companies (ASD) is a company Cramer believes "still has legs -- 15 points worth of legs."

Cramer also said he likes Norfolk Southern (NSC) and considers WellPoint (WLP) among the best health containment companies.

Cramer said he can't comment on General Electric (GE) but that it's been a winner in past weeks.

Also, once the UnitedHealth (UNH) (a stock he owns for his charitable trust) and Sierra Health Services (SIE) deal closes, Cramer said it should free up some cash for UNH to buy back some stock. He called UNH the cheapest, but not best-run, in its group.

In addition, Buffett-owned Ingersoll-Rand (IR) seems to have the value to go higher, but H&R Block (HRB) is not in great shape, Cramer said. The market keeps beating the latter up, and it keeps going lower.

Cramer is baffled by what Buffett sees in H&R Block, but Cramer's bottom line is: When it comes to picking winning stocks, "Buffett's still got it."

Sell Block

During his "Sell Block" segment, Cramer advised viewers to be cautious and prudent with their gains "because they can be taken away." In cases in which investors have made double-digit gains, he urged profit taking.

He suggested taking 25% of VF Corp. (VFC) and Ralph Lauren (RL) positions off the table and allowing the rest to run.

Further, Cramer asked people to consider ringing the register on most or all of RadioShack (RSH).

Take some General Cable (BGC), First Solar (FSLR) and Chemed (CHE) off the table, too, he said, as all have had big runs.

It's also time for viewers to take some gains in their green-day plays, such as Fuel-Tech (FTEK), Foster Wheeler (FWLT) and Shaw Group (SGR), Cramer said.

He advised viewers to clear out of Oakley (OO) and to consider selling some Clearwire (CLWR).

Acadia

Acadia Pharmaceuticals (ACAD) CEO Dr. Uli Hacksell joined Cramer on his show and said that Acadia has made some "very exciting progress" in its schizophrenia treatments.

Acadia has been busy working on two schizophrenia programs, one of which -- the advanced program -- recently completed a phase II study, Hacksell said. Acadia is now looking to form alliances with a partner that will help take the program through phase III.

Cramer said he believes Acadia will find a partner, and he iterated his buy at $14. "I think the stock could see $20 next year at this time," he said.

To view Cramer's interview with Uli Hacksell , please click here.

Lightning Round

Cramer was bullish on Texas Instruments (TXN), National Semiconductor (NSM), Intel (INTC), Halliburton (HAL), Gerdau AmeriSteel (GNA), US Steel (X), Allegheny Technologies (ATI), Sears holdings (SHLD), Brookfield Asset Management (BAM), PepsiCo (PEP), Smith & Wesson (SWHC), Apple (AAPL) and Caterpillar (CAT).

Cramer was bearish on Integrated Device Technology (IDTI), Grey Wolf (GW), Pepsi Bottling Group (PBG), Starbucks (SBUX) and Whole Foods Market (WFMI).

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

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