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Cramer's 'Mad Money' Recap: McDonald's Supersized

TheStreet.com Staff

11/09/07 - 07:42 PM EST

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

In a brutal week for the market that looks like 1990 "all over again," investors should look to the "Golden Arches" for support, Cramer told viewers of his "Mad Money" TV show Friday.

After the Federal Reserve indicated it would not likely act again to help the economy, and Cisco(CSCO) said that the subprime mess is cutting into orders in America, the market turned ugly. Retail and banks were hit hard, with Washington Mutual(WM) down to $18.

In an environment of weakness, Cramer urged viewers to seize on "opportunities to buy the stocks that could make your portfolio into a bulletproof vest."

McDonald's (MCD), which Cramer has applauded for its consistent performance, is "loaded with American growth and European growth," important qualities for a stock that is expected to weather a market storm.

Additionally, there's a catalyst to buy McDonald's, Cramer said: "There's an analysts' meeting next Tuesday, and if I were you, I'd get in ahead of this meeting." With McDonald's down a dollar ahead of the meeting, investors should find a good entry point, Cramer said.

"Yesterday, McDonald's was one of the only stocks that actually went up," Cramer said, thanks to positive same-store sales.

"The McDonald's I know is an international story," Cramer said. Viewers can expect the company to showcase new products, new initiatives and European growth at the analysts' meeting.

"There aren't that many stocks that can deliver consistently on international growth," Cramer said, but McDonald's is one of them. Furthermore, the economy is likely to make times tougher for people. When things are bad, people start to eat at McDonald's more often.

"I would buy this on Monday," Cramer said.

Dodd on U.S. Energy Policy

Cramer said that the Street can often pay too much attention to money, especially when the market is down. "You need to be paying attention to politics" and the upcoming presidential election, he told viewers. In light of this observation, Cramer welcomed Democratic presidential candidate Sen. Chris Dodd of Connecticut to the show.

When Cramer asked Dodd about energy policy, Dodd replied, "We borrow a billion dollars every day to borrow foreign oil." He added that carbon is a major problem in terms of the environment and public health. Dodd also expressed concern about oil dependency's effect on American security.

Cramer pressed Dodd about his stance on nuclear energy. "I mention everywhere I go you can't have an honest discussion about energy independence" without discussing nuclear power, Dodd affirmed.

Dodd further asserted that nuclear power could be a solution to energy dependence for the developing world.

When Cramer asked Dodd about the precarious economic situation, he stressed that "liquidity, liquidity, liquidity" is the driving problem behind the U.S.' woes. "We've got a liquidity crisis as well as a mortgage crisis." If investigators "start hammering on Fannie(FNM) and Freddie(FRE)," they will disrupt the vehicles that can bail the economy out.

"Is a hedge fund group above ordinary income tax?" Cramer asked. Dodd said he wasn't certain that taxing capital gains would be productive, saying he wants to "make sure there aren't unintended consequences" to a tax for hedge fund managers.

Dodd concluded the interview by defending Democrats' record on the economy: "If you look back over the years, Democrats have been much better managers of the economy."

Foster Wheeler CEO Speaks

Cramer welcomed Ray Milchovich, CEO of Foster Wheeler (FWLT), a "Mad Money" favorite.

Cramer noted that the stock had performed exceptionally, but lately there had been speculation that Foster Wheeler's market had been saturated. "Is there any more ahead?" he asked Milchovich.

"Every time we released a quarter, the markets that support these businesses continue to be extremely strong," Milchovich replied. He added that "Saudi Aramco ... just announced their intent to spend ninety billion on oil projects," so there are healthy prospects for the company.

Milchovich recognized the need for Foster Wheeler to show leadership in the clean-energy domain. He said the company is working on carbon-capture technology to help develop clean coal power and has made a $30 million equity investment in wind farms in Italy.

Asked about the company's balance sheet, Milchovich said that Foster Wheeler's leverage ratios are competitive with others in the industry.

Cramer asked about Foster Wheeler's global reach. Milchovich said that "75% to 80% of our business is outside of North America. ... We are truly a global company." With strong performance in the Asia-Pacific region, the company is not exclusively dependent on the Middle East.

Mad Mail

During the Mad Mail segment of the show, one writer thanked Cramer for his sound investment advice. Cramer replied that even though the market showed weakness this week, "If we take profits, weeks like this do not feel the same." He added that "big runs ... demand, demand profit-taking."

A long-term Under Armour (UA) investor wrote in to ask whether Cramer's diminished valuation of Under Armour was due to a bruised ego over [CEO] Kevin Plank's sale of a large volume of shares.

"I felt like I was used," Cramer replied. But he stressed that his message had more to do with Under Armour's buildup of inventory. "That's what I'm more concerned about." "You can own it," Cramer said, "but I got to tell you, it may never be good again."

Lightning Round

Cramer was bullish on Celgene (CELG), Barrick Gold (ABX), Lundin Mining (LMC), Yamana (AUY), Aircastle (AYR), Genesis Lease (GLS), Shaw Group (SGR), Exelon (EXC), ConEdison (ED), CVS Caremark (CVS), Textron (TXT), Boeing (BA), EnCana (ECA), Suncor (SU), Honeywell (HON), United Technologies (UTX), MasterCard (MA), L. B. Foster (FSTR) and Foster Wheeler (FWLT). Cramer was bearish on Biovail (BVF), Uranium Resources (URRE), Cameco (CCJ), RiteAid (RAD), Ceradyne (CRDN), American Express (AXP) and Capital One (COF).

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.

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