Mad Money Recap

Return to Article

Cramer's 'Mad Money' Recap: Seeing Green

TheStreet.com Staff

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

Investing in "green" stocks can be profitable, Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

To Cramer, green stocks are companies that benefit from the trend in corporate environmental responsibility.

As evidence, Cramer ticked off eight companies that have gained an average of 65% since the third week in April when he picked them. By contrast, the S&P 500 has risen about 3.5% over the same period.

Shaw Group (SGR Quote), the first of his green plays, is up 147% since April and "could still double," Cramer said.

Foster Wheeler (FWLT Quote) is up 99% since April, Cramer said, noting it's worth owning more for its infrastructure component than for its green component.

BorgWarner (BWA Quote) is up 38% since April and still has legs, Cramer continued.

OM Group (OMG Quote) has been "the dog of the green group," he said. It went down 5% since April because of uncertainties regarding its pricing. And although its recent quarter was "really good," he said he's not going to be too aggressive in recommending it.

First Solar (FSLR Quote), up 170% since April, reports tomorrow, with Cramer expecting analysts to raise estimates. Cramer said he would wait for it to report before buying, because it's had such a big run.

Fuel-Tech (FTEK Quote) is up 35.3% since April, Cramer said. Instead of getting out of OMG, Cramer said he would rather ring the register on FTEK.

The one stock out of his green group that he still regards as a bargain is MEMC (WFR Quote) even though it is up 19.8% since April. This company has the silicon that solar companies are addicted to. "The risk/reward is too good to give up," Cramer said.

Finally, he said, Tetra Tech (TTEK Quote), up 16.9% since April, could also do better.

Wells Fargo Gets Green

With oil prices so high, it's time to start considering alternative energy plays such as Wells Fargo (WFC Quote), one of the few banks Cramer said he's been sticking by in the current period.

Wells Fargo, he said, has been investing "aggressively" in a lot of green projects, such as solar and wind farms. It also happens to be the largest buyer of renewable energy in the country.

When the bank last reported its quarter, it missed consensus estimates and consequently got hit, but it's still worth owning, according to Cramer.

Cramer suspects it's being lumped with a lot of bad banks and is being punished unfairly. Even though its quarter wasn't great, Wells Fargo had a few positives, including improved loan growth, and he's inclined to believe it deserves to go higher right now.

Cramer welcomed the financial institution's CEO John Stumpf to the show and asked him how his company has spent and developed green as a concept of making money for its business.

Stumpt said green is important to the bank's shareholders, customers and society. He said the company is involved with some "really important projects where we can do well and do good at the same time."

He said Wells Fargo's green efforts have absolutely resonated with younger people, as well as the middle-aged and the elderly.

When Cramer asked Stumpf if he's shocked when he hears about all the foreclosures, the CEO said that this is the third housing cycle he's seen, but this one was different from the other two because so much demand was created five or six years ago when interest rates were low.

However, from Wells Fargo's perspective, the bank is triple-A rated by Standard & Poor's and Moody's and it has a strong balance sheet, Stumpf said. "So this is an opportunity for us." Moreover, Stumpf said he likes the company long term.

If people have to own one bank, Cramer said they should consider the "well-run" Wells Fargo.

Am I Diversified?

During the "Am I Diversified?" round, Cramer's first caller asked about these five stocks: Kraft (KFT Quote), Research In Motion (RIMM Quote), VMware (VMW Quote), EMC (EMC Quote) and Altria (MO Quote).

Cramer said he sees a lot of problems with this portfolio. First, EMC and VMware are basically the same kind of tech company, he said. Additionally, RIMM is a tech stock, too. Plus, Altria and Kraft are too much alike.

Cramer suggested keeping EMC and Altria, both of which he owns for his charitable trust, Action Alerts PLUS, and swapping out of the rest.

The next player called out these five names: Core Labs (CLB Quote), China Telecom (CHA Quote), Baidu.com (BIDU Quote), Southern Copper (PCU Quote) and Grant Prideco (GRP Quote).

Core Labs and Grant Prideco are both oil-related, and China Telecom and Baidu are both China plays, Cramer said. He told the caller to drop one of the two related stocks in each category and to pick up a health care cost-containment stock and a defensive play.

Next, a caller asked about the following five: Intuitive Surgical (ISRG Quote), Textron (TXT Quote), Transocean (RIG Quote), NYSE (NYX Quote) and EMC, the last three of which Cramer owns for Action Alerts PLUS.

"Not a single change needs to be made in that portfolio," Cramer said, blessing it as diversified.

The final caller owned these five plays: Nuance Communications (NUAN Quote), Radiant Systems (RADS Quote), Evergreen Solar (ESLR Quote), Masimo (MASI Quote) and JDA Software (JDAS Quote).

Cramer strongly urged the caller to cut down on speculation. Too many of these stocks are speculative, he warned, noting he should keep one or two of these and swap out of the rest.

Mad Mail

In his "Mad Mail" segment, Cramer told an emailer that every time he's tried to pick a financial on his show, he's messed up. He said he was too bullish on the financials and retailers.

Concerning UBS (UBS Quote), Cramer suggested waiting for the stock to hit $45 before buying more. UBS closed at $ 48.73 today.

Responding to another viewer, Cramer said he didn't like Oceaneering International's (OII Quote) earnings call too much. Although they admitted to some problems, he said, "The execution was not too good this quarter."

Asked about lululemon (LULU Quote), Cramer said he has already declared a win in this stock and wants nothing to do with it now. "The money's been made," he said.

Lightning Round

Cramer was bullish on PetroChina (PTR Quote), Baidu.com (BIDU Quote), Focus Media (FMCN Quote), Cnooc (CEO Quote), Inverness Medical (IMA Quote), Teck Cominco (TCK Quote), CVRD (RIO Quote), Lundin Mining (LMC Quote), Freeport-McMoRan (FCX Quote) and Intuitive Surgical (ISRG Quote).

Cramer was bearish on Pacific Capital (PCBC Quote), AspenBio Pharma (APPY Quote), Sohu.com (SOHU Quote) and Accuray (ARAY 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.