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Cramer's 'Mad Money' Recap: Unleashing Polish Vodka

TheStreet.com Staff

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"It takes a very special company to sell vodka to the Russians," Jim Cramer told viewers of his "Mad Money" TV show Thursday. "But tonight I've found one."

That company is Central European Distribution (CEDC Quote) and it's located in Poland.

Throughout the week, Cramer has been on the hunt for promising stock picks in Russia and countries that were once members of the Warsaw Pact.

In tonight's show, he takes a look at Poland, whose economy is booming just like those of its Russian neighbors. The Polish government is doing everything right from privatizing many government assets to cutting taxes to spark growth. The country also sports a strong currency.

Central European Distribution's future is just as bright. The company is the No. 1 producer of vodka in Poland and distributes over 900 different brands of spirits throughout Eastern Europe.

CED is also the largest beverage distributor in both Poland and Hungary and is making a successful push into the Russian vodka market.

Cramer says now is the time to invest in CED since it's still early in the company's story. He notes that none of the seven analysts who cover the stock are from a major bank, making the stock virtually invisible to Wall Street. "Hardly anyone knows about this company," he said.

The company currently trades at 22 times expected 2009 earnings, but sports a 24% long-term growth rate.

"This stock is going a lot higher once people sit up and take notice," he said.

Riding the Oil Boom

Continuing with his series on "catch-up" stocks, Cramer recommended Baker Hughes (BHI Quote) as another company that has fallen behind its peers and is due for a rally.

Cramer said Baker Hughes is in a solid sector. That's important, he explained, because 50% of a stock's performance comes from the sector that it's in. In the case of Baker Hughes, the oil service index has rallied 18% since Jan. 11 while Baker Hughes' stock is up a scant 3%.

"This is for good reason," said Cramer, who characterized Baker Hughes as not as good as some of its peers. But now Cramer feels Baker Hughes is getting better and is ready to "catch up."

Citing increased oil and gas drilling all over globe, Cramer says all of the oil sector stocks should be poised to rally. He noted recent positive comments from Chesapeake Energy (CHK Quote), Devon Energy (DVN Quote), Anadarko Petroleum (APC Quote) and XTO Energy (XTO Quote), a stock which he owns for his charitable trust, Action Alerts PLUS, as positive signs for Baker Hughes, which supplies all four companies.

Cramer said that Baker Hughes is a classic under-promise, over-deliver situation. The company underwhelmed analysts with its last quarterly earnings, but is now forecasting an impressive 21% increase in earnings for 2008.

The company also does 58% of its business overseas, including in Russia and Brazil, two markets Cramer has been behind for quite some time.

Bottom line: even the worst house in the best neighborhood is worth taking a look at, he says.

Yamana's Disappointing Quarter

"Gold stocks are still worth owning," said Cramer, noting the recent weakness in gold and gold stocks as signs of a classic bull market pullback.

Although the "markets have put these stocks on sale," Cramer cited three reasons why he feels gold is now heading higher. First, the Federal Reserve still has to lower interest rates even more, which will make stocks less attractive and gold more attractive.

Second, gold is the perfect way to play the uncertainly of the upcoming presidential election cycle. And third, he said, "We simply don't have enough of the stuff."

Cramer then welcomed Peter Marrone, chairman and CEO of Yamana Gold (AUY Quote), a stock which he owns for Action Alerts PLUS, to the show to discuss the company's recent production problems.

Marrone called Yamana's disappointing quarter a transition period due to its recent large acquisition. He defended the acquisition, saying he didn't feel he overpaid for the assets and explained that its still cheaper to purchase existing production than it is to develop new projects.

After the interview, Cramer remained skeptical. Although Yamana's production issues have tarnished the company's reputation as a solid performer, he said he will continue to own it and buy more.

Mad Mail

In this viewer feedback segment, Cramer clarified his position on Dolan Media (DM Quote) and said that he does indeed like the company.

Lightning Round

In the Lightning Round, Cramer was bullish on Bristol-Myers Squibb (BMY Quote), Merck (MRK Quote), Verizon (VZ Quote), Exploration Co Delaware (TXCO Quote) and Petroleo Brasileiro (PBR Quote).

Cramer was bearish on Gannett (GCI Quote), Qwest Communications (Q Quote), Yahoo! (YHOO Quote), Macquarie Infrastructure (MIC Quote), Petrobras (PZE Quote), NVIDIA (NVDA Quote), Sandisk (SNDK Quote), Brookfield Asset Management (BAM Quote) and Ambac Financial Group (ABK 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.