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Cramer's 'Mad Money' Recap: The Next Oil Gusher

TheStreet.com Staff

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

There are market opportunities to find stocks that work based on their fundamentals, Jim Cramer told viewers of his "Mad Money" TV show Thursday.

While Cramer remains bullish on agriculture, infrastructure and health care stocks, he believes oil stocks may present the biggest opportunity for investors.

Cramer cited dwindling oil reserves as the long-term catalyst that make oil stocks attractive. He noted companies like Statoil (STO Quote) and BP (BP Quote), both of which were taken lower recently on fears the companies may be running out of reserves.

For this market, Cramer raves about FMC Technologies (FTI Quote), a high-tech oil equipment and service company.

In particular, FMC makes products for underwater oil processing systems and has recently landed large contracts for the coveted Pazflor Project off West Africa, among others. In a world where Cramer sees oil heading to $125 a barrel, FMC's commanding lead in its market will allow it to continue to prosper.

In addition, he points out, the company offers investors a cushion with a huge stock-repurchase program with 14 million shares left to buy. And he says it's also cheap, trading at less than twice its growth rate, with solid fundamentals.

Looking Out for the Little Guy

Cramer welcomed Eric Dinallo, the state of New York insurance superintendent, to the show to discuss recent concerns and allegations involving MBIA (MBI Quote) and other insurers ravaged by the subprime mortgage mess.

Cramer expressed his concerns for municipal bondholders who may get short-changed by the growing credit crisis.

Dinallo said his agency is looking out for "the little guy," and that he was happy to see MBIA recently cut its dividend to preserve capital. He defended his recent move to persuade Berkshire Hathaway(BRK Quote), to get into the bond insurance business. And he pointed out that many firms are now working with his agency to become more transparent and resolve the current concerns.

A Difference of Opinion

There's a battle brewing over Salesforce.com (CRM Quote) and Cramer's taking sides. It seems Salesforce was recently upgraded by UBS on the same day Goldman Sachs downgraded the stock.

"What's amazing about these differing opinions," Cramer points out, "is how much the analysts agree on."

Both firms agree that Salesforce is the best run company in the software service industry, with the best management and great recurring revenues. Both analysts also agree that the company is the leader in its industry and is having a great quarter. So why, Cramer asks, did the Goldman analyst downgrade Salesforce? Because the stock is priced for perfection, he points out.

Cramer is siding with the Goldman analyst and recommends trimming your position in Salesforce and selling into any strength.

The stock, he points out, trades at 170 times its 2008 estimates, and that's just too high. Any bad news could signal disaster for Salesforce. Cramer believes there may be 10 points of upside, but perhaps as much as 30 points of potential downside. The lesson, Cramer says, "is even great companies can be too expensive."

Am I Diversified?

In his "Am I Diversified" segment, a viewer called in with Monsanto (MON Quote), Corning (GLW Quote), Microsoft (MSFT Quote), McDonald's (MCD Quote) and Merck (MRK Quote) as his top holdings. Cramer blessed this portfolio as diversified, saying it was "picture perfect."

The next caller's portfolio included Berkshire Hathaway (BRKB Quote), Cypress Semiconductor (CY Quote), Monsanto (MON Quote), EMC (EMC Quote) and Leucadia National (LUK Quote).

Cramer noted that there is overlap between Cypress and EMC's Sunpower (SPWR Quote) subsidiary, but blesses the portfolio as diversified because Sunpower could be categorized as an energy play.

And finally, the third caller's portfolio included Goldman Sachs (GS Quote), Transocean (RIG Quote), Google (GOOG Quote), Caterpillar (CAT Quote) and Raytheon (RTN Quote). Cramer felt the caller's portfolio was diversified and asked "what's not to like?"

In the Lightning Round, Cramer was bullish on Accenture (ACN Quote), First Cash Financial Services (FCFS Quote), Harsco (HSC Quote), Thompson Creek Metal (TC Quote) and CVS Caremark (CVS Quote)

Cramer was bearish on Ciber (CBR Quote), Pacer International (PACR Quote), Intuitive Surgical (ISRG Quote), KeyCorp (KEY Quote), American International Group (AIG Quote) and Rite Aid (RAD 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.