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Cramer's 'Mad Money' Recap: Profit Mining With Freeport-McMoRan

TheStreet.com Staff

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The minerals and mining sector is in a long-term bull market that's en fuego. The way to play it is with Freeport-McMoRan (FCX Quote), Jim Cramer told viewers of his "Mad Money" TV show Wednesday.

Cramer considers mining stocks among the best to hold because of the huge global demand for raw materials. In addition, he said investors can benefit from the great deal of consolidation occurring in the sector. "Where there are takeovers, there are stocks that usually go much, much higher," Cramer said.

His favorite play in the industry is Freeport-McMoRan, which he owns for his charitable trust, Action Alerts PLUS.

This company is just "fabulous," Cramer said, and it has nothing to do with the U.S. economy.

He said the demand for copper seems to be increasing while supply is decreasing, and Freeport-McMoRan should profit as a leading copper mining company. He also said it has "an unbelievably great" buyback going.

Where consolidation is concerned, Cramer said he doesn't want to see a takeover here, because he believes Freeport-McMoRan has so much upside on its own. It is a stock people should consider, he said.

Going With Hudson City Bancorp

If his thesis is right and the Federal Reserve starts slicing and dicing rates, people should consider owning a bank, Cramer said.

However, because every bank will profit if the Fed cuts, he said he's more concerned with recommending the bank with the least downside risk in case there isn't a rate cut. That bank, Cramer said, is Hudson City Bancorp (HCBK Quote). This is the one he feels safe about recommending.

The company's CEO is concerned with only two things: depositors and shareholders, Cramer said.

Hudson City Bancorp "has an amazing model," he said. "It takes deposits; it lends to good, hard-working people who then pay the loans back."

It stays away from subprime, Cramer said. In fact, the bank holds fewer nonperforming loans than the rest of the banks -- even Wells Fargo (WFC Quote).

They do a thorough job of lending to people that they're sure will be able to pay their loans back, he said. Plus, it doesn't nickel-and-dime its customers by charging them exorbitant fees for things like overdrafts. They're more concerned with the bigger picture, Cramer said.

If the Fed cuts next week by half a point, the banks should go up, but if it doesn't cut Hudson City has the least to lose, he said. It's the bank people should consider owning.

A Well-Positioned REIT

Federal Realty Investment Trust's (FRT Quote) Donald Wood joined Cramer on the show, and the chief executive discussed the investment strategy behind his company's portfolios.

It's easy to say consumer spending is going to be bad for the shopping center real estate market, but this is not the case for certain strong areas in the country, Wood said. The company, said Wood, made the decision a long time ago to select areas where there is money to spend and there are a lot of people.

"We leave other parts of the country alone," he said. "There is no hedge, in my view, in real estate like great locations." The trust's business model, Wood continued, is about consistent sustainable growth in good times and bad.

Cramer said he's sticking with FRT and suggested others do the same.

Am I Diversified?

During the "Am I Diversified?" segment, Cramer's first player called out these five names: Allscripts Healthcare Solutions (MDRX Quote), Brookfield Asset Management (BAM Quote), General Maritime (GMR Quote), Corning (GLW Quote) and EMC (EMC Quote), the latter two of which Cramer owns for his charitable trust.

"Yes, you are diversified and I am digging your portfolio, other than MDRX," Cramer told the viewer.

The second caller asked if he was diversified with these five holdings: Hasbro (HAS Quote), VMware (VMW Quote), Citigroup (C Quote), Hewlett-Packard (HPQ Quote) and McDonald's (MCD Quote), the latter three of which Cramer owns for Action Alerts PLUS.

Cramer suggested the caller swap out of VMware and get into a defense contractor like Raytheon (RTN Quote), another stock he owns.

The next caller said he owns these five stocks: Raytheon, CVRD (RIO Quote), Unilver (UN Quote), Hewlett-Packard and Schlumberger (SLB Quote).

Cramer blessed the portfolio as diversified.

The final player called out the following five plays: BankUnited (BKUNA Quote), Ford (F Quote), Sirius Satellite Radio (SIRI Quote), Circuit City (CC Quote) and Micron Technology (MU Quote).

Cramer said that although the caller is diversified, he doesn't think the portfolio is that great.

Sudden Death

During the "Sudden Death" round, Cramer was bullish on Wolverine World Wide (WWW Quote), Nike (NKE Quote), Vimpel-Communications (VIP Quote), Foster Wheeler(FWLT Quote) and Shaw Group (SGR Quote).

Lightning Round

Cramer was bullish on CVS Caremark (CVS Quote), Hewlett-Packard, Monster Worldwide (MNST Quote), St. Jude Medical (STJ Quote), Freeport-McMoran (FCX Quote), Transocean (RIG Quote), Schlumberger (SLB Quote) and Raytheon.

Cramer was bearish on Sysco (SYY Quote), Boston Scientific (BSX Quote), Titanium Metals (TIE Quote) and Taser (TASR Quote).

Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

For more of Cramer's insights during the Lightning Round, click here.