Cramer's 'Mad Money' Recap: Why Starbucks Will Rebound

Stock quotes in this article: SBUX , MCD , MER , GS , BMY , SGP , BIIB , EMC  

Click here for an archive of Cramer's "Mad Money" recaps.


"It's time to worry less about capital appreciation and more about capital preservation," Jim Cramer told viewers of his "Mad Money" TV show Tuesday -- at least until the Federal Reserve finally acts and slashes rates big.

Cramer said he wants to keep home-gamers involved in the market, but advised them to keep a low-risk profile. They should invest in stocks with good dividends and hold some cash on the sidelines to take advantage of opportunities.

And one of those opportunities has arrived, said Cramer, when four companies recently took a lesson from Donald Trump and fired three CEOs and one chairman. Cramer examined each of these firings to see which ones will make money.

First up is Starbucks (SBUX Quote), which just replaced CEO Jim Donald with company founder Howard Schultz. Cramer has loathed Starbucks since February 2007.

Cramer, long a fan of Schultz, said the stock has taken a beating because Starbucks has too many stores; it was expanding to suit the needs of Wall Street; it was failing to innovate; and it was lagging in customer service.

That all changes now that Schultz is back at the helm, Cramer said. He compared the company's turnaround to that of McDonald's(MCD Quote), a stock he owns for Action Alerts PLUS. Coincidentally, McDonald's also brought back key executives to spur innovation and growth.

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