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Cramer's 'Mad Money' Recap: Bank on Banco Bradesco

TheStreet.com Staff

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Brazil's banks should offer solace to investors who are turned off by America's weak consumers, Jim Cramer told viewers of his "Mad Money" TV show on Tuesday.

Calling Brazil's growing economy "investor nirvana," Cramer pointed out that Latin America provides an important market to American companies that are suffering at home.

Whirlpool (WHR Quote) and Colgate (CL Quote) can both attribute today's earnings success to Latin American exposure, Cramer said.

Brazil is particularly good for investors because its consumers are growing richer. The Fed also has a role in a Brazil play. Lower interest rates are great for Brazil's banks, because "credit cards and mortgages are a recent discovery" for the country," Cramer said. Lower interest rates in America mean the Brazilian market will open up as well.

Additionally, global money managers want to buy banks, but takeover targets are scarce. Brazil offers two possible candidates: Banco Bradesco (BBD Quote) and Banco Itau (ITU Quote).

Banco Bradesco is the best way to play the Brazilian utopia, Cramer said. BBD has five advantages over ITU.

First, BBD is the larger of the two banks. Second, it has fewer bad loans as a percentage of total loans. Third, BBD is the market leader in asset management insurance and pension plans. Fourth, BBD has 20% of its ATMs and branches in the wealthier northern half of Brazil compared to ITU's 6%.

And finally, BBD trades at 14 times earnings, whereas ITU trades at 16 times earnings. If BBD's price-over-earnings ratio were to rise to match ITU, the share price would rise from $32 to $40.

Banco Bradesco handily beats Banco Itau as a play on Brazil's emerging market, Cramer said.

Corning a Value Play

An upcoming FCC ruling on cable companies' relationships with building developers and owners should benefit Corning (GLW Quote), Cramer said. Additionally, the company has innovated bendable optical fiber, a development that should significantly reduce the cost of installing cable networks in apartments and apartment buildings, Cramer said.

Furthermore, Corning has issued a conservative forecast in a recent earnings report. Cramer believes that means the company is playing the underpromise, overdeliver game. Compared with other companies in its sector, the company is tremendously undervalued, Cramer said. Investors looking to make a play on LCD companies and fiber optics should take a look at this company.

Tesoro Treasure

Lightning Round

Cramer was bullish on Vodafone(VOD Quote), Annaly Capital Management(NLY Quote), Perry Ellis International(PERY Quote), NexCen Brands(NEXC Quote), Phillips-Van Heusen(PVH Quote), Synchronoss Technologies(SNCR Quote), ValueClick(VCLK Quote), Apple(AAPL Quote), Google(GOOG Quote), Research In Motion(RIMM Quote), Furmanite Corporation(FRM Quote), Foster Wheeler(FWLT Quote), Altria(MO Quote) and Colgate-Palmolive(CL Quote).

Cramer was bearish on J2 Global Communications(JCOM Quote) , 3SBio(SSRX Quote), Vimpel-Communications(VIP Quote), E-House (China) Holdings(EJ Quote), ConAgra Foods(CAG Quote), Synaptics(SYNA Quote) and Procter & Gamble(PG Quote).

Sudden Death

He was bearish on Palm (PALM Quote) and Coach (COH Quote).

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.