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Cramer's 'Mad Money' Recap: Milk Macao Casinos

TheStreet.com Staff

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"On a day like today, I debated deflating the game," said Jim Cramer on his "Mad Money" TV show Tuesday.

The Wall Street pact of nobody selling off the last week of August was broken today, he said.

But in spite of the market's 280-point drop, attributed to the Federal Reserve minutes, Cramer decided to stay in the game and try to find the bull market that he's always promising. That market is gambling.

Referring to casinos as "cash machines," Cramer likes Wynn Resorts (WYNN Quote - Cramer on WYNN - Stock Picks). A best of breed among casinos, Cramer said, Wynn is better than Las Vegas Sands (LVS Quote - Cramer on LVS - Stock Picks), which opened its $2.4 billion Venetian Macao Hotel Resort today in Macao -- the world's largest gaming space.

Cramer believes that Macao, where WYNN is also licensed to operate, is a "better version of Vegas." Last year, Macau surpassed Las Vegas as the world's largest gambling market.

But what really caught Cramer's attention was WYNN's conference call this week. Calls tend to be "full of excuses" about underperformance, but Wynn's was succinct, emphasizing product and services strength and the company's great numbers. Cramer said it was one of the greatest conference calls of the quarter.

Cramer likes that Wynn is not a stock that's choking on subprime and that it has $1 billion left in buybacks.

Wynn's second-quarter revenue was up 15% year over year to $687.5 million, and Cramer believes this profitability will continue. He called the company a "Wynn-win situation," adding that "the world is Wynn's oyster."

Buy Wynn as it comes down, Cramer said.

Free to Be IGT

Considered "the arms dealer" to companies such as Wynn and LVS, Cramer said, International Gaming Technology (IGT Quote - Cramer on IGT - Stock Picks) is in a position to grow.

IGT, which Cramer owns for his charitable trust, Action Alerts PLUS, is down 23% from its high. He said that it is simply "on sale."

IGT reported 9% growth year over year on gaming operations revenue in the third quarter. In addition, the company is doing a $50 million buyback. Cramer believes that it "doesn't take a lot to move the stock higher," especially as IGT has nothing to do with the Fed.

Cramer said that IGT is a long-term investment that should not be sold before 2008. It is an undervalued global play in an untapped market. As such, investors should wait at least five days before buying.

Wouldst Thou Woodmark?

American Woodmark (AMWD Quote - Cramer on AMWD - Stock Picks) is buying back $100 million, or 25%, of its total shares.

He believes that "AMWD is not-so-gradually taking itself private."

Cramer believes not only that these buybacks show confidence within the company but also that less stock being available "will help you long-term."

On Aug. 22, American Woodmark posted "truly terrible" numbers that have continued its slide. The stock is down 38% from its high in February. However, it recently increased its dividend 50% to 9 cents a share. It's a great sign when a company raises its dividend even though its stock is down, Cramer said.

Beyond its dividend, Cramer said that the company has a good balance sheet. It also has strong believers in Home Depot (HD Quote - Cramer on HD - Stock Picks) and Lowe's (LOW Quote - Cramer on LOW - Stock Picks), where it gets 60% of its cabinet sales.

Cramer believes that American Woodmark, which is levered to the awful housing industry, is not going to go immediately up, so investors should wait at least five days before pulling the trigger and use limit orders, he said.

Drug High

Cramer believes that big things are ahead for Onyx Pharmaceuticals (ONXX Quote - Cramer on ONXX - Stock Picks), whose Nexavar might be "the next unbelievable blockbuster" drug, he said. .

Cramer welcomed Hollings Renton, Onyx chairman and president, to the show to talk about what's ahead for his company. Renton echoed Cramer's assessment of Nexavar, saying that the drug is in its trial stages but is showing tremendous promise in fighting liver cancer.

Renton pointed out that Onyx reported $80 million in sales in the second quarter. But he insisted that the stock should not be affected by economics.

Cramer said that Nexavar may turn out to be "the best cancer story ever told." In turn, this may be a company that a major player such as Bayer (BAY Quote - Cramer on BAY - Stock Picks) wants to buy. Cramer believes that Onyx will be a buy once it comes down in price.

To view Cramer's interview with Hollings Renton, please click here.

Lightning Round

Cramer was bullish on Elan (ELN Quote - Cramer on ELN - Stock Picks), Schering-Plough (SGP Quote - Cramer on SGP - Stock Picks), Amazon.com (AMZN Quote - Cramer on AMZN - Stock Picks), Research In Motion (RIMM Quote - Cramer on RIMM - Stock Picks), Apple (AAPL Quote - Cramer on AAPL - Stock Picks), Google (GOOG Quote - Cramer on GOOG - Stock Picks), UIL Holdings (UIL Quote - Cramer on UIL - Stock Picks), Consolidated Edison (ED Quote - Cramer on ED - Stock Picks), Gap (GPS Quote - Cramer on GPS - Stock Picks), Kohl's (KSS Quote - Cramer on KSS - Stock Picks), American Eagle Outfitters (AEO Quote - Cramer on AEO - Stock Picks), Costco (COST Quote - Cramer on COST - Stock Picks), Chipotle Mexican Grill (CMG Quote - Cramer on CMG - Stock Picks), Burger King (BKC Quote - Cramer on BKC - Stock Picks), McDonald's (MCD Quote - Cramer on MCD - Stock Picks), Hawaiian Electric (HE Quote - Cramer on HE - Stock Picks) and EMC (EMC Quote - Cramer on EMC - Stock Picks).

Cramer was bearish on Merck (MRK Quote - Cramer on MRK - Stock Picks), Micron Technology (MU Quote - Cramer on MU - Stock Picks), Casual Male Retail Group (CMRG Quote - Cramer on CMRG - Stock Picks), O'Charley's (CHUX Quote - Cramer on CHUX - Stock Picks), Qualcomm (QCOM Quote - Cramer on QCOM - Stock Picks) and Wal-Mart (WMT Quote - Cramer on WMT - Stock Picks).

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.