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'RealMoney' Radio Recap: Katrina Plays

Refineries are currently the bottleneck, and the refinery play Cramer recommends is Valero Energy (VLO). Valero, "should be a core holding," said Cramer. Use the recent weakness to buy some shares, he said.

Companies that own energy resources should also do well. Cramer recommends EnCana (ECA - Get Report), Marathon Oil (MRO - Get Report) and Chesapeake Energy (CHK - Get Report). "Pick them up here for the long term," Cramer said.

As for communications, Cramer said cell-phone towers will have to be added and we'll have to put more antennas on the towers we have. Cramer recommends American Tower (AMT - Get Report) and Global Signal (GSL - Get Report).

Insurance carries should be able to raise rates in the wake of the hurricane. Cramer likes Montpelier Re (MRH - Get Report), Argonaut Group (AGII - Get Report) and American International Group (AIG - Get Report).

Cramer focused on the homebuilding sector in Tuesday's Sector Spotlight. In response to an email question about Comstock Homebuilding (CHCI - Get Report), Cramer said, "I don't see a lot here." Cramer said the bear case for homebuilders included a dramatic rise in raw costs for wood and building supplies. Additionally, recent news articles have suggested the Washington, D.C., housing market, Comstock's home market, had cooled. Cramer said Comstock was "down too much to sell." But, he cautioned, just because a stock is finished going down doesn't mean it is going to start going back up again.

Another emailer asked about Centex (CTX). Cramer said Centex was the cheapest homebuilder and has a "huge presence" in Texas. Centex should benefit from rebuilding along the Gulf coast.

Toll Brothers (TOL - Get Report) is too expensive, said Cramer.

Beazer Homes (BZH - Get Report) is "good," but it is "too high relative to its 52-week high."

D.R. Horton (DHI - Get Report) is too expensive relative to other homebuilders and is barely down from its 52-week high. "I don't want to own it," said Cramer.

A caller asked regarding Cramer's stance of focusing on high-end retail plays whether Costco would be considered low end or high end. Cramer said he feels Costco is not high-end, but it should be.

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CTX $26.17 -1.70%
AGII $48.81 -0.20%
AIG $56.00 0.70%
AMT $96.61 -2.65%
BZH $16.27 -2.22%


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