Cramer's 'Mad Money' Recap: Shampoo and Cut

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Hair Ye

To satisfy your inner desire for a great trade, Jim Cramer recommended Alberto-Culver(ACV) on Tuesday's episode of his "Mad Money" TV show.

The run-of-the-mill shampoo company is poised to explode in the second-quarter of 2006, when it makes its high-end Nexxus products broadly available and lower the price, Cramer said.

Right now Nexxus pulls in $30 million in salon sales, and the company sees sales going as high as $250 million to $300 million over the next five years.

But Cramer said, "This is a trade. This is not an investment."

Buy now and sell when the hype of the Nexxus launch vastly inflates the stock. But don't give into the temptation to hold on, Cramer says.

Want a long-term buy? Go for Procter & Gamble(PG).

Ralph on the Rack

But despite his enthusiasm for Alberto-Culver, Ralph Lauren(RL) was Cramer's stock of the week.

The pick had nothing to do with the clothes or the fact that Oprah is hyping the company's sweaters. It's because of the company's high-end clothing line Cramer called best of breed.

Ralph Lauren has 54 % gross margins, about 20 % more than the industry average; and Cramer also likes the company's strong management team, good balance sheet and first-ever billion-dollar quarter.

One caller was worried because the company is expanding into high-end markets in the midst of a Wal-Mart(WMT) economy. Cramer said fear not.

"The worst thing would be to see Ralph Lauren stuff on racks in discount houses. It's really important that they stay out of the midtier or they'll lose that gross margin," he said.

"It's a great product people pay a high premium for."

In other upbeat news for Ralph Lauren, the company just bought back its shoe brand name from Reebok(RBK) and will launch a footwear line that Cramer said could be huge.