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Cramer's 'Mad Money' Recap: Game Plan for Next Week

TheStreet.com Staff

07/13/07 - 08:19 PM EDT

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

"This is a market where good news matters," Jim Cramer told viewers of his "Mad Money" TV show on Speculation Friday.

As part of his game plan, Cramer said investors should consider buying two kinds of stocks next week: those he believes will report "BTE," or better-than-expected quarters, and those that are part of "the anger trade."

Cramer told potential investors that he would buy Coca-Cola (KO Quote - Cramer on KO - Stock Picks) ahead of its earnings release on Tuesday because he believes the weak dollar will cause Coca-Cola to report a better-than-expected quarter.

In addition, Cramer said he believes that Intel (INTC Quote - Cramer on INTC - Stock Picks) will also report a better-than-expected quarter on Tuesday, and told viewers that he thought it could go up "a quick point" on the news.

Viewers might want to buy United Technologies (UTX Quote - Cramer on UTX - Stock Picks) before it reports on Wednesday, Cramer said, because he believes its infrastructure and aerospace divisions will cause United Technologies to have a better-than-expected quarter.

Continuing with his game plan, Cramer recommended Freeport McMoRan Copper & Gold (FCX Quote - Cramer on FCX - Stock Picks), which he owns for his charitable trust, Action Alerts PLUS, as another stock that he believes will beat earnings estimates next week.

Honeywell (HON Quote - Cramer on HON - Stock Picks) should report better-than-expected earnings on Wednesday, Cramer predicted. Cramer also said he expects Johnson Controls (JCI Quote - Cramer on JCI - Stock Picks) to beat its earnings estimates on Thursday, and that he would be surprised "if it doesn't rally 10 points."

On Friday, Cramer said, he expects Caterpillar (CAT Quote - Cramer on CAT - Stock Picks) and Schlumberger (SLB Quote - Cramer on SLB - Stock Picks) will both report better-than-expected quarters. "I'd buy all these names before they report and enjoy the good news," he concluded.

Cramer then explained his anger bet, which he said involves the banks. Next week, when Merrill Lynch (MER Quote - Cramer on MER - Stock Picks), Wells Fargo (WFC Quote - Cramer on WFC - Stock Picks), JPMorgan Chase (JPM Quote - Cramer on JPM - Stock Picks), Bank of America (BAC Quote - Cramer on BAC - Stock Picks) and Citigroup (C Quote - Cramer on C - Stock Picks) report, Cramer told viewers, he believes those companies will increase their stock buybacks and raise dividends, because "these banks are on a mission to show that there is no slowdown." Cramer said he would buy any of these five banks and that he has been purchasing Citigroup for his charitable trust.

$80-to-$120 Bonanza

In the final installment of Cramer's series about his $80-to-$120 theory, which states that "stocks that go to $80 in a bull market usually go to $100, and stocks that make it to $100 tend to go all the way to $120," Cramer once again acknowledged that his theory is "preposterous" but nevertheless works.

"I think I'm right about the $80-to-$120 pattern, but I didn't expect to see the kind of quick gains that these stocks have delivered this week," said Cramer, referring to the six stocks he has already named in the series: Boeing (BA Quote - Cramer on BA - Stock Picks), Caterpillar, ConocoPhillips (COP Quote - Cramer on COP - Stock Picks), Energizer (ENR Quote - Cramer on ENR - Stock Picks), Air Products & Chemicals(APD Quote - Cramer on APD - Stock Picks) and Apache (APA Quote - Cramer on APA - Stock Picks).

Cramer said that these stocks, which he began recommending on Monday, were up an average of 5.2% since he first mentioned them this week. "I've discovered alchemy," Cramer said.

The last stock on the list is Terex (TEX Quote - Cramer on TEX - Stock Picks), Cramer said. In addition to having the right price, Cramer said he rates Terex a buy because of its exposure to the "wild bull market" in infrastructure and machinery.

Though Terex is in the same business as Caterpillar, Cramer said it was not a redundant pick because not all of Terex's operations are in competition with Caterpillar's. "Terex's bread and butter is in aerial work platforms," said Cramer, which Caterpillar does not manufacture.

In addition, Cramer said he liked Terex's crane business, despite competition from Manitowoc (MTW Quote - Cramer on MTW - Stock Picks).

Incredibly Risky Plays

"You have a duty to yourself to take a chunk of your portfolio -- no more than 20% of your nonretirement money, your mad money -- and invest it in incredibly risky stocks," Cramer explained to viewers before introducing his pick for Speculation Friday, GeoEye (GEOY Quote - Cramer on GEOY - Stock Picks).

Though GeoEye is the largest commercial satellite imaging company, it remains unprofitable, Cramer said. He called the stock "very risky" and cautioned viewers not to use market orders if they choose to purchase it.

Citing increased demand from governments for outsourced satellite imagery, as well as programs such as Google Earth that make use of satellite imaging, Cramer said that GeoEye is well positioned to thrive because it is part of a "virtual duopoly" in the industry and its main competitor is not publicly traded.

"I think this stock could double," Cramer told viewers, as long as the new satellite they plan to launch this year is commissioned successfully. If the new satellite, which has already had its launch date postponed once, does not go up, GeoEye "will get hammered," said Cramer.

"GeoEye is not for your IRA, but it's the definition of a great spec stock," Cramer said.

Mad Mail

In his "Mad Mail" segment, Cramer answered a viewer's email about the short position in Taser (TASR Quote - Cramer on TASR - Stock Picks), saying that the shorts in Taser are facing "enfilading fire" and "the longs are winning."

Responding to a viewer in Amsterdam who wanted to know how he felt about the fact that a sign with the word "Buhjah," similar to Cramer's "booyah," hangs over a jewelry store, Cramer said he was just happy to have fans in Europe.

Cramer agreed with a viewer who favored Excel Maritime Carriers (EXM Quote - Cramer on EXM - Stock Picks), and admitted that he had previously gotten the stock wrong by being too negative.

Lightning Round

Cramer was bullish on Automatic Data Processing(ADP Quote - Cramer on ADP - Stock Picks), Riverbed (RVBD Quote - Cramer on RVBD - Stock Picks), Reliance Steel & Aluminum(RS Quote - Cramer on RS - Stock Picks), McMoRan Exploration(MMR Quote - Cramer on MMR - Stock Picks), Lundin Mining(LMC Quote - Cramer on LMC - Stock Picks), Qualcomm(QCOM Quote - Cramer on QCOM - Stock Picks), Research In Motion(RIMM Quote - Cramer on RIMM - Stock Picks), Amazon(AMZN Quote - Cramer on AMZN - Stock Picks), Apple(AAPL Quote - Cramer on AAPL - Stock Picks), Google(GOOG Quote - Cramer on GOOG - Stock Picks), Intel(INTC Quote - Cramer on INTC - Stock Picks), Cisco(CSCO Quote - Cramer on CSCO - Stock Picks), Microsoft(MSFT Quote - Cramer on MSFT - Stock Picks), Dell(DELL Quote - Cramer on DELL - Stock Picks), Hewlett-Packard(HPQ Quote - Cramer on HPQ - Stock Picks), EMC(EMC Quote - Cramer on EMC - Stock Picks), SanDisk(SNDK Quote - Cramer on SNDK - Stock Picks), Texas Instruments(TXN Quote - Cramer on TXN - Stock Picks), McDermott(MDR Quote - Cramer on MDR - Stock Picks), Crocs(CROX Quote - Cramer on CROX - Stock Picks), Under Armour(UA Quote - Cramer on UA - Stock Picks), Foster Wheeler(FWLT Quote - Cramer on FWLT - Stock Picks), Shaw Group(SGR Quote - Cramer on SGR - Stock Picks), Chicago Bridge & Iron(CBI Quote - Cramer on CBI - Stock Picks), Jacobs Engineering(JEC Quote - Cramer on JEC - Stock Picks), Teck Cominco(TCK Quote - Cramer on TCK - Stock Picks), Freeport McMoRan Copper & Gold(FCX Quote - Cramer on FCX - Stock Picks), Cleveland-Cliffs(CLF Quote - Cramer on CLF - Stock Picks), Companhia Vale do Rio Doce(RIO Quote - Cramer on RIO - Stock Picks) and Johnson Controls(JCI Quote - Cramer on JCI - Stock Picks).

Cramer was bearish on Gerdau Ameristeel(GNA Quote - Cramer on GNA - Stock Picks), GOL Linhas Aereas Inteligentes(GOL Quote - Cramer on GOL - Stock Picks), Mariner Energy(ME Quote - Cramer on ME - Stock Picks), Geniune Parts(GPC Quote - Cramer on GPC - Stock Picks) and International Royal(ROY Quote - Cramer on ROY - Stock Picks).

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

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