Cramer's 'Mad Money' Recap: Make Exxon an Ex-Holding

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Jim Cramer told his "Mad Money" viewers Thursday evening that all we heard on Wall Street in the morning was how good Exxon Mobil's(XOM Quote) quarter was.

So why did the stock do very little on Thursday? The market yawned, Cramer said, because the company's second-quarter earnings were a penny shy of Wall Street expectations.

What's more, Cramer said, Exxon doesn't care enough about growth. Instead of plowing all of its profits into exploration and drilling, Exxon would rather buy back its own stock, Cramer said. During the second quarter, the company bought back 64 million shares. Now it's embarking on a $5 billion stock buyback. But Cramer said the buyback doesn't amount to much when the company has almost 6 billion shares outstanding. That is why you shouldn't own Exxon Mobil or Royal Dutch Shell(RD Quote) for that matter, Cramer said.

So what should you own? Cramer said investors should be buying Chesapeake Energy(CHK Quote) and Southwestern Energy(SWN Quote). Both of those companies are investing in the future -- trying to find oil -- so that they can produce more growth for investors.

When it comes to Chesapeake and Southwestern vs. Exxon Mobil, "it's growth vs. no growth," Cramer said. "Retire your shares of Exxon," Cramer urged. And buy Chesapeake and Southwestern Energy.

Lock and Load

Cramer also was hot for gunmakers Smith & Wesson(SWB Quote) and Sturm Ruger(RGR Quote). The Senate is getting ready to pass a new bill that helps gunmakers immensely. The bill will eliminate big legal and insurance fees that gun manufacturers have always paid. Once the bill passes, said Cramer, the gunmakers won't have to worry so much about crippling lawsuits.

Sturm Ruger has grown sales by 8.2% this year; the company has no debt and it has a fat 4.38% dividend. Smith & Wesson, meanwhile, is expanding into the rifle business. Both companies also could take market share from European companies. When the bill passes, Cramer believes that both stocks could rise 20% to 25%. Both should be bought, Cramer said.