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Cramer's 'Mad Money' Recap: Antidotes to a Selloff

TheStreet.com Staff

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It's time to sift through the rubble and find companies that we trust, Jim Cramer told viewers of his "Mad Money" TV show Friday.

How do people find the situations in which stocks were damaged but not the companies themselves? he asked. They find stocks that reported great earnings just before the selloff.

Most of the companies are "robust and healthy," but because of the downturn, these stocks have been put on sale, Cramer said. However, the housing, financial and brokerage stocks are "no good," and investors should lighten up on these on any lift.

Cramer gave viewers eight "trustworthy" stocks and said that people should only buy them if the stocks help diversify their portfolios. Also, market players should buy any of these eight only if they have already taken some profits in their existing positions, Cramer added.

Starting with PepsiCo (PEP - Cramer's Take - Stockpickr) and Kellogg (K - Cramer's Take - Stockpickr), Cramer said both delivered "serious upside." Pepsi, Cramer said, ran and then gave it all back. Meanwhile, "no one even noticed Kellogg, which is flat since it reported."

Pepsi at $66 is "very attractive," and because it's growing faster than Coca-Cola (KO - Cramer's Take - Stockpickr), it is worth $80, he said. Kellogg should blow away the numbers for its next quarter.

"These two could be the antidote, especially if the economy is slowing," Cramer said.

Moving on, small companies such as Nova Chemicals (NCX - Cramer's Take - Stockpickr) are being taken over, he said. Plus, this company's quarter was "unbelievably good," and its fundamentals are strong.

Schering-Plough (SGP - Cramer's Take - Stockpickr) and Celgene (CELG - Cramer's Take - Stockpickr) are two more stocks Cramer said he likes.

Celgene, however, is tough because it was up today, Cramer said. At the same time, he believes it could have a fantastic 2010, 2011 and 2012 and should go up to $75. Celgene closed Friday up 93 cents at $61.13. Concerning Schering, Cramer said he still can't believe how good its number was.

Further, EMC (EMC - Cramer's Take - Stockpickr) reported a "strong" quarter Tuesday, and Cramer, with a shout-out to Victor Kiam, said he likes the company so much that he bought some for his charitable trust, Action Alerts PLUS.

Cramer said he also likes EMC because it is spinning off VMware "in what looks like the sexiest initial public offering of the year." After the spinoff, Cramer said, he expects EMC's buyback activity to increase.

Two More to Buy

Boeing (BA - Cramer's Take - Stockpickr) and Lockheed Martin (LMT - Cramer's Take - Stockpickr) are two stocks that should go to $120, Cramer told viewers, wrapping up his list of eight buyable stocks.

According to Cramer's $80-to-$120 thesis, stocks that hit $80 usually make it to par -- Wall Street gibberish for $100 -- and then usually go to $120 in a bull market. Both Boeing and Lockheed, which have already made it to $100, "fit this profile of $80 to $120," he said.

Boeing's new planes carry more people and don't use as much fuel. Plus, the global aerospace cycle has nothing to do with the economy, Cramer said.

Boeing had a far better-than-expected quarter and is down. However, the fact that it's down has nothing to do with the company's fundamentals, he said.

Furthermore, Boeing doesn't see an end in sight in demand for its energy-efficient planes, and neither does Cramer. If the market opens up on Monday, he said he wouldn't buy the stock.

But if it opens down, Cramer said he would buy Boeing incrementally, up to 100 shares.

At $100, he believes that Lockheed stock has the potential to bust through the rubble and hit $120, he continued. As the U.S. fights a war in Iraq, the defense budget is "huge," and Lockheed works, Cramer said. Plus, the company has good international exposure and is a "buyback king."

'Tis the Season

Tech has seasonal strength and is more immune to subprime than any group he follows, Cramer said, other than food and drugs.

Tech does not need to borrow money, he said. The only reason it was down Thursday and today is because the market was in "a pure panic mode." He said that tech is one of few sectors money will be pouring into, as people migrate out of the financials.

Cramer said he thinks Adobe (ADBE - Cramer's Take - Stockpickr) is a buy. He believes that Adobe's third and fourth quarters should be the first to benefit from the company's new Creative Suite 3, the "best software" for publishing.

Cramer said he likes Adobe more than Microsoft (MSFT - Cramer's Take - Stockpickr) and Oracle (ORCL - Cramer's Take - Stockpickr).

Adobe, he said, "fits perfectly" with his seasonal tech thesis, and its Creative Suite 3 software should take it higher.

During his "Mad Mail" segment, Cramer told a viewer that he considers Transocean (RIG - Cramer's Take - Stockpickr), which he owns for his charitable trust, one of the most creditworthy oil companies out there other than Schlumberger (SLB - Cramer's Take - Stockpickr).

Cramer also said he would certainly bless taking some gains in the stock.

Responding to another piece of mail, Cramer said he hopes those who recently caught a quick $4 in Omniture (OMTR - Cramer's Take - Stockpickr) did some profit-taking on the stock.

Lightning Round

Cramer was bullish on Woodward Governor (WGOV - Cramer's Take - Stockpickr), Caterpillar (CAT - Cramer's Take - Stockpickr), Sears Holdings (SHLD - Cramer's Take - Stockpickr), Toyota Motor (TM - Cramer's Take - Stockpickr) and Macy's (M - Cramer's Take - Stockpickr).

Cramer was bearish on Manitowoc (MTW - Cramer's Take - Stockpickr) and Alcoa (AA - Cramer's Take - Stockpickr).

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.