Cramer's 'Mad Money' Recap: From Russia With Love

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The former Warsaw Pact countries have turned themselves around, Jim Cramer told viewers of his "Mad Money" TV show Monday.

While many investors may think of Russia just in terms of its vast natural resources, Cramer noted that many sectors of the Russian economy are now "on fire."

According to Cramer, the way to play the newly ignited Russian economy is with steelmaker Mechel (MTL), one of the "one of the best international steel plays around."

Cramer: Stick With Ag

He said the company is seeing strong demand not only from inside Russia, but also from China and the Middle East.

Cramer also likes Mechel for its vertical integration. The company currently produces 100% of its own coal, 92% of its own iron ore and 55% of its own nickel. As a result, Mechel is a leader in its industry because it is able to source all of its own raw materials.

Cramer warned investors to exercise some caution in purchasing Mechel shares. He said that the company's current valuation, at 11 times forward earnings, makes the stock expensive. He also noted that Mechel is only 13 points off a recent 52-week high.

His advice: Wait at least five days from today or for a pull back before pulling the trigger.

A Stimulus Plan That Works

"Forget about the economic stimulus package here in the U.S.," Cramer said. Instead, he encouraged viewers to look into the recently announced $5.6 billion stimulus package in Mexico really benefits companies.

He said the package, which includes a 3% income tax break for companies, along with a 10% to 20% decrease in the price of electricity and reductions in mandatory payroll benefit payments, should be a windfall for the Mexican economy.

One of the largest beneficiaries of the new stimulus, is Formento Economico Mexicano (FMX), parent company to the largest bottler of Coca-Cola (KO) in Latin America, he says.

Besides Coca-Cola, the leading soft drink brand in Latin America, Formento also distributes over 70 other soft drink brands throughout the region. It is also the second largest brewer in Mexico, distributing over 31 brands.

Cramer also likes Formento for its ownership of the OXXO convenience store chain. "These convenience stores are the perfect outlet for Formento's products," he said. He said Formento also makes its own glass bottles and bottle caps, making it less susceptible to any increase in raw costs.

As with investing in Mechel shares, Cramer advised investors to wait for a pullback and buy the stock on weakness.

Catch-Up Stocks

In a new series called "Catch-Up Stocks," Cramer highlights stocks that are lagging versus their competitors and are poised to "catch-up" for big gains.

Tonight he focused on corregated cardboard maker Temple-Inland (TIN), a stock which is down 27% since he first recommended it back on March 20, 2007.

According to Cramer, Temple-Inland doesn't deserve to be lagging behind competitor Louisiana-Pacific (LPX), which is up a quick 25% since March 20 of this year, while Temple-Inland is up a paltry 11% in the same period.

With its 3.1% dividend yield, Cramer called Temple-Inland the "picture of stability," saying that weakness in both the economy and housing sectors will not hurt the company as much as anticipated.

According to Cramer, the weak U.S. dollar makes U.S. cardboard cheaper around the world. With the U.S. having one of the largest uncut softwood forests left on the planet, Temple-Inland is poised for years of success, he says.

Cramer also looks favorably at Carl Icahn's 9.8% stake in the company as added protection.