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Cramer's 'Mad Money' Recap: New Life for Ailing Stocks

TheStreet.com Staff

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"It's time to trust the markets and trust this upward move," Jim Cramer told viewers of his "Mad Money" TV show Friday.

This move is so powerful that it almost doesn't matter which companies you buy, he explained, as long as they're in the sectors that matter.

Cramer said a panicked Federal Reserve, a desperate Republican Party and a "raving bunch of Democrats" are contributing to the new bull market. In this environment, he said, everything will move higher.

Cramer said this market is so good that he made the unprecedented move of removing Lee Scott, Chairman and CEO of Wal-Mart(WMT), from his "Wall of Shame." "It doesn't matter who runs Walmart," he explained, "because people shop at Wal-Mart during times of economic slowdowns."

In this market, even the bad news doesn't matter, he explained. Cramer cited Freeport(FCX), which he owns for his charitable trust Action Alerts PLUS, as a stock that's up almost 20 points since it reported disappointing earnings.

He also said McDonald's(MCD) and CVS Caremark(CVS), are following a similar pattern. He owns both stocks for his Action Alerts PLUS portfolio.

Cramer remains bullish on retailers. He likes TJ Maxx(TJX). He's also still a fan of the railroads including Union Pacific(UNP), CSX(CSX) and Burlington Northern.

"And let's not forget the agriculture stocks," he reminded viewers.

But there's a special place in Cramer's heart for the bank stocks. Cramer said he likes Capital One(COF), which recently raised its dividend and boosted its stock buyback.

He also likes Merrill Lynch(MER), Washington Mutual(WM) and Citigroup(C). The latter is a stock which he owns for his Action Alerts PLUS portfolio.

Cramer also reiterated a buy on NYSE Euronext(NYX), which he also owns for his Action Alerts PLUS portfolio. He said he would buy NYX before it reports its earnings on Tuesday.

And finally, responding to Friday's news, Cramer said he would also buy Microsoft(MSFT) at under $30 a share, after its surprise takeover bid for Yahoo!(YHOO).

Turning Trash into Profits

For "Speculation Friday," Cramer said investors need to return to China, and look into Gushan Energy(GU). Chinese stocks have been out of favor recently, Cramer said, but that won't last for long.

Gushan Energy, a Chinese maker of biodiesel fuels, is profitable and growing rapidly, he said. The company grew its earnings by 48% year over year and maintains a long-term growth rate of 20%.

Cramer says Gushan has three things going for it. First, it's a play on the growing middle class in China that needs more energy. Second, China has a real desire for cleaner air. The Chinese government has mandated that by 2020, 15% of China's energy must be renewable.

Finally, Gushan's stock has been flying under the radar of Wall Street. The stock has hovered around its offering price since it debuted last December, but Cramer said the stock will head higher once the company gains some attention.

A Good Bet for the Housing Rebound

Cramer told viewers that the single best risk-reward offering in the market right now is toolmaker Black & Decker (BKD).

"This is the right stock at the right price at the right time," he said. Black & Decker is a great company, but also greatly hated on Wall Street, he explained.

Cramer said Black & Decker is a play on the coming rebound in housing. Consumers, he expects, will start fixing up the homes that they have been unable to sell.

All of the bad news has been "baked" into the share price, Cramer explained. The current price presumes a recession is coming, and that means the stock isn't likely to go any lower.

Cramer also likes Black & Decker for its buyback program. The company has cut its float by almost a third in recent years and has increased its dividend as well, all without increasing its debt, Cramer noted.

In 2004, Black & Decker had 81 million shares outstanding and was at $90 a share, making it a $7.2 billion company.

But today the company has just 63 million shares outstanding at $73 a share, making it just a $4.5 billion company, even though there's been a 20% increase in sales since then. "Black and Decker is so cheap that it's begging to be bought," Cramer said.

Fund Advice

Cramer welcomed Brian Ferguson, manager of the Dreyfus Premier Strategic Value Fund (DAGVX) to the show to discuss his investment strategy. The fund has yielded an average annual return of 18% since Ferguson began managing the fund in 2003.

Ferguson said now is not the time to fight the Federal Reserve. Aggressive monetary policy, he said, is the premier leading indicator for bull markets in the financials and he's adhering to his strategy and sticking with the financial stocks.

Cramer said he's sticking with Ferguson and recommending the Dreyfus Strategic Value Fund as one of the best aggressive growth funds out there.

Lightning Round

Cramer was bullish on Focus Media(FMCN), Scana(SCG), PPL(PPL), Exelon(EXC), Countrywide Financial(CFC) and National Oilwell Varco(NOV).

Cramer was bearish on Harman International(HAR), VisionChina Media(VISN), Moneygram(MGI), NetSuite(N) and Brocade Communications(BRCD).

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.