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Cramer's 'Mad Money': Job Data No Surprise

Scott Rutt

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"Not all news is surprising," Jim Cramer told viewers of his "Mad Money" TV show Friday.

He said that when analyzing why the market only dropped 143 points after such a horrible unemployment number, he concluded that the market simply saw this bad number coming, and that the bad news was already baked into the Dow.

"We've finally reached the moment where everyone is convinced that everything bad is already priced into the market," said Cramer.

Why did stocks like Alcoa (AA Quote) and Intel (INTC Quote), both of which reported horrible quarters, only fall slightly before rebounding? Cramer said it's because Alcoa was already down 65% from its highs, and Intel was already down 38%.

Cramer continued to say that while much of the bad news is now behind us, that does not mean that there's good news ahead.

He predicted the markets will likely be range-bound as the recession unfolds. "Don't expect much from the market when the economy does nothing more, or nothing less, than what's expected," he said.

Going Back to School

Is there a company that actually makes money when more people lose their jobs?

Cramer said there is, and that company is American Public Education , which he highlighted for his "Speculation Friday" segment.

American Public Education owns and operates both American Military University and American Public University, two primarily online schools offering substantially reduced tuitions to its students. Tuition for undergrads is typically 60% lower than traditional state schools and 90% lower for graduate programs.

Cramer said the research is clear, for every 1% increase in unemployment there's a 2% uptick in enrollment at colleges and universities as people go back to school in larger numbers to learn new skills and make themselves more marketable to employers.

Cramer said American Public Education is unique in the fact that 60% of its students are in the military and that it's a well-funded organization committed to bettering its personnel. And since American Public's classes are online, they're often perfect for the hectic schedules of military participants.

With estimates predicting 41% revenue growth in 2009, Cramer said investors will be hard pressed to find that kind of growth anywhere else in the market.

American Public Education recently issued a secondary offering of stock at $37.50 a share. Cramer urged investors to be patient, and let the stock come to them. He said $37 a share would be the price to pull the trigger.

Once Hated, Now Loved

In a surprising change of heart, Cramer added home improvement retailer Home Depot (HD Quote) to his list of the "Top 5 Dow Stocks For 2009."

Home Depot joins Hewlett-Packard (HPQ Quote), Verizon (VZ Quote), Johnson & Johnson and Caterpillar (CAT Quote), which were featured earlier in the week.

Cramer said Home Depot is a play on the coming housing bottom, which he still predicts is only 171 days away. He said the combination of historically low interest rates with a federal government now pulling out all the stops to help people buy and save their homes with be a boon for Home Depot.

"People will be buying homes and fixing them up," said Cramer, who admittedly still likes competitor Lowes (LOW Quote), but noted that since Lowes was not a Dow stock, it couldn't be added to his favorite Dow stock list.

In addition to the macro-economic forces pulling in Home Depot's favor, Cramer likes the internal changes at the company now that former CEO Bob Nardelli has resigned. He said the company is getting better with both its pricing and inventory management. Cramer also likes Home Depot for its juicy 3.8% dividend yield.

Mad Mail

In this segment, Cramer told a viewer that he thinks Molson Coors (TAP Quote) is a terrific stock to own here.

When asked about owning Shaw Group (SGR Quote), Cramer told a second viewer "I think you're in excellent shape with that stock."

Lightning Round

In the Lightning Round, Cramer was bullish on Kraft Foods (KFT Quote), Quanta Services (PWR Quote), Anadarko Petroleum (APC Quote) and McDonald's (MCD Quote).

Cramer was bearish on SPX Corp (SPW Quote), Crosstex Energy (XTXI Quote), Walgreens (WAG Quote), Chipotle Mexican Grille (CMG Quote), Pre-Paid Legal Services (PPD Quote), Ingersoll-Rand (IR Quote), AK Steel Holding (AKS Quote), Nucor (NUE Quote) and Allied Capital (ALD Quote).

Check out the latest edition of "Cramer's Take on Top-Searched Stocks" on Stockpickr.

P/>Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

Read more of Cramer's Mad Money Lightning Round insights.

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