Cramer's 'Mad Money' Recap: Building Confidence

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Jim Cramer has changed his mind about the homebuilders, he said Friday on his "Mad Money" TV show. With the Federal Reserve nearly finished raising interest rates, it's time to buy Pulte Homes (PHM Quote), the "cheapest of the homebuilders," he said.

Cramer is a fan of Pulte not only because it is cheap but also because it has exposure to all price levels of homebuilding. Additionally, 40% of Pulte's business is building "active adult [retirement] communities," he said. Pulte is the "smartest play on retirement out there."

Finally, Pulte should have easy comparisons vs. last year, said Cramer, when the company experienced a shortfall due to too much exposure to Las Vegas, he said.

In response to a question about REITs, Cramer said the group is being hit by tax-loss selling, and we're not yet close enough to the end of the Federal Reserve's tightening cycle to purchase REITs.

Commenting on St. Joe (JOE Quote), Cramer said St. Joe has the "easiest comparisons of all" due to the difficult hurricane season this year.

Albertson's(ABS Quote) is going private, said Cramer, and he expects the new owners will shut down the worst-performing stores, which is good news for Safeway (SWY Quote). Safeway is Albertson's closest competitor, said Cramer, with an approximate store overlap of 65%. For each store Albertson's closes, there is a two-in-three chance those customers will become Safeway customers, he said.

Safeway has had steady same-store sales and was already taking market share from Albertson's, said Cramer, before the latest development. Safeway mildly disappointed investors with its gross margin recently, but that problem should be taken care of by the closure of the Albertson's stores, he said.

In response to a question about Costco (COST Quote), Cramer said Costco is a very good company, but with the stock at $49, he doesn't have the level of comfort he would like to have to recommend the stock. He believes Costco is really more of an upscale retailer, and at this point in the cycle, he believes Wal-Mart (WMT Quote) is a better play.