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Cramer's 'Mad Money' Recap: Hidden Gems

Scott Rutt

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"There are still some hidden gems in this market," Jim Cramer told viewers on another special, midday episode of his "Mad Money" TV show Wednesday.

While the markets continue to focus almost exclusively on the fates of Freddie Mac (FRE Quote) and Fannie Mae (FNM Quote), Cramer said the real buys may be in retail and tech.

Cramer said that he's taking a new look at the retailers after many have reported better-than-expected numbers this past quarter. He said that TJ Maxx (TJX Quote) is now among his favorites.

In the technology sector, Cramer said the earnings from Hewlett Packard (HPQ Quote), which he also owns for his Action Alerts PLUS portfolio, really do matter and that it's amazing that HP's business has been so good in a worldwide slowdown.

He sees strength in many of the big cap tech names like Research In Motion (RIMM Quote), Apple (AAPL Quote), Intel (INTC Quote), Google (GOOG Quote) and even Qualcomm (QCOM Quote).

Surviving the Ethanol Mandate

Cramer talked with Tyson Foods (TSN Quote) CEO Dick Bond to get some insights into the state of the food business as it struggles against sharply rising inflation in raw costs.

Bond reiterated his opposition to government mandated quotas on ethanol production, saying that the conversion of 30% of the nation's corn crop to 3% of the country's gasoline needs hurts consumers more than it helps. He called the mandates just wrong, saying the consumers haven't yet felt the true magnitude of the inflation since many companies have been working hard to absorb them.

According to Bond's estimates, the price of corn could drop as much as $1 a bushel to $1.20 a bushel if the mandates were repealed.

Asked about growth opportunties in China, Bond said the Chinese population only consumes about 20 pounds of poultry per capita. He said that number could rise to 30 pounds in five to six years.

Another area of strength for Tyson is the tortilla market. Bond said his company is the second largest producer of tortillas and is rapidly taking market share from traditional bread products.

Outrage of the Day

In this segment, Cramer wondered "what ever happened to stopping trading when news is pending?"

In the "old days," when a company had news that was known by some, but not by all, trading would be stopped until that news could disseminate, he noted.

However, in the case of the precipitious decline of Freddie Mac and Fannie Mae shares, Cramer said the trading indicates someone, somewhere, knows something. He urged the government to just make its intentions known so the markets can move on.

A Sticky Bid

Cramer talked with David Steiner, CEO of Waste Management (WMI Quote) to discuss his company's recent unsolicited bid for competitor Republic Services (RSG Quote), -- a deal has negatively impacted its share price.

Steiner defended the offer, saying that the combined company has the potential to leverage the great assets of both companies and create even more value. He emphasized that Waste Management is committed to creating shareholder value, and that if the deal doesn't create both long-term and short-term value for its shareholders, it would walk away from the deal.

Steiner said that he feels Waste Management's current share price is undervalued, and even if the Republic deal doesn't happen, it's still good news for the industry and his company wins. He predicts strong growth and margin expansion to continue, either way.

Final Thoughts

Cramer said he thinks we're near a bottom in the Chinese markets, and that should cause a global stabilization in oil and other commodity prices.

He said that stabilization, along with his target price for oil at $110 a barrel, would be good news for technology, infrastructure and coals stocks, as well as for the banking stocks, which could meant a fresh injection of Chinese capital.

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