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Cramer's 'Mad Money' Recap: Energetic Ag Stocks

TheStreet.com Staff

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Agriculture these days has less to do with food and more to do with energy, Jim Cramer told viewers of his "Mad Money" TV show Friday.

As long as oil remains expensive, the agriculture complex is going to take on increasing importance as a source for alternative energy, as evidenced by the soaring demand for corn and soy as energy crops, he said.

Cramer touted agriculture as the fifth long-term bull market during the weeklong preview of his his new book, Stay Mad for Life. Earlier in the week, he mentioned aerospace and defense, minerals and mining, oil and infrastructure.

Market players who own these agriculture stocks know they've paid off so far, he said. Deere (DE Quote), Monsanto (MON Quote) and Bunge (BG Quote) all have had significant upsides this year.

Fertilizer has been the biggest winner, and the No. 1 name in this group is Mosaic (MOS Quote), Cramer said.

In addition, Agrium (AGU Quote) and Potash (POT Quote) have had enormous gains, too, he continued.

"All of these gains have been driven by demand," and this is just the beginning, Cramer said. There should be years and years of upside for this industry.

But while the long-term story, he said, is "fabulous," the market should give you a better opportunity two or three weeks from now to get in. Ag is right, but maybe not at these prices, Cramer said. People should wait for a pullback before they buy these stocks.

Sticking With It

The entire year has been a battle for Cramer with NYSE Euronext (NYX Quote), a stock he owns for his charitable trust, Action Alerts PLUS.

This last year the stock has traded worse than any other stock he has ever seen in his 26 years of trading, Cramer said. When all other stocks went up, this one went down and the most frustrating thing about it was his thesis for owning it was entirely intact the entire time.

It wasn't going down because he was wrong about the company, he said. "It was just going down."

Now that NYX is nearly back to where it was when he recommended it at the beginning of the year, Cramer said he's sure many investors are ready to give up and sell it. However, he advised not to quit now.

"Even though you hate owning it, nothing fundamental has changed for the company underneath, it," Cramer said of NYX. Not only is the company intact, he said, but its estimates have continually increased and it keeps beating them.

It would be foolish to walk away from NYX now, especially because the fundamentals are better than they were at the beginning of the year, he said.

Taking a Pass

The Federal Reserve meets Tuesday, and right now Cramer said he's not sure what's going to happen. Therefore, he believes the best thing to do is to wait it out.

At times, investors must be willing to admit that they're powerless, he said, noting this is one of those times.

If the Fed cuts by a quarter, the fear of recession will still be around and that will keep stocks down, Cramer said. On the other hand, he said, if it cuts by half a point, people will be able to buy stocks in various industries like the industrial, tech and banking sectors.

Under normal circumstances, Cramer said he would recommend buying Costco (COST Quote) and Kroger (KR Quote), both of which report their earnings next week.

However, sometimes being a good investor means sitting it out -- the best trade sometimes being no trade at all, he said.

The Muhlenkamp Fund

Cramer said he devotes some space in his new book to mutual funds people should invest in if they don't have time to own stocks.

When a person invests in a mutual fund, it's essentially an investment in the fund's money manager, the person who will make the money. One mutual fund Cramer said he likes is Muhlenkamp(MUHLX Quote).

He welcomed the fund's lead manager Ron Muhlenkamp to the show and asked him to discuss his investment philosophy.

Muhlenkamp said he looks for "good companies and, when prices get cheap, to buy them." The only way people can do this, he continued, is to find good companies others don't like, he noted.

One of the stocks his fund owns is Altria (MO Quote), an Action Alerts PLUS name, Muhlenkamp said.

The money manger said he also believes Devon Energy (DVN Quote) and Cemex (CX Quote) are both stocks that have more room for upside.

Lightning Round

Cramer was bullish on Under Armour (UA Quote), VF Corp (VFC Quote), Apple (AAPL Quote), Masimo (MASI Quote), Stryker (SYK Quote), Genentech (symbol Quote), CVS Caremark (CVS Quote), Rite Aid (RAD Quote), Citigroup (C Quote), AK Steel (AKS Quote), Reliance Steel (RS Quote), Research In Motion (RIMM Quote), ConocoPhillips (COP Quote) and Exxon Mobil (XOM Quote).

Cramer was bearish on Walgreen (WAG Quote), China Precision Steel (CPSL Quote), E Trade (ETFC Quote) and DivX (DIVX 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.