Jim Cramer's 'Stop Trading!': Buy Freeport

Buy Freeport-McMoRan (FCX Quote), Jim Cramer said on CNBC's "Stop Trading!" segment Wednesday.

"American companies benefit" from demand for commodities in China, Cramer said. Executives at companies like CSX (CSX Quote), Peabody (BTU Quote) and Arch Coal (ACI Quote) have been telling Cramer that if customers don't use their products in the U.S., there is demand overseas, he said.

Cramer praised Freeport-McMoRan for its acquisition of Phelps Dodge last year. "That was the greatest acquisition that we've seen in years," he said. He also praised Vale's (RIO Quote) acquisition activity.

He said short-sellers have fallen on their swords in this space. Freeport is not a U.S. housing play, and neither is Caterpillar (CAT Quote), he said.

The U.S. market is "just not that important," to commodities demand, Cramer said. He also observed that consolidation in the industry has led to substantial earnings improvement.

Cramer then moved on to discuss property and casualty insurers. "We all knew that Ambac (ABK Quote) was not so hot," Cramer said. He pointed out the difference between "real insurance, where you insure real things," and "faux insurance, which is the CDO insurance." Cramer said he thinks Safeco (SAF Quote) and Chubb (CB Quote) are great plays in the sector.

The Street has missed out on the insurance game, Cramer said. "There were 12 holds and four sells on Safeco. Thank you, Wall Street," he quipped. On the other hand, "I'm not that high on MBIA (MBI Quote). I don't feel that good about MGIC (MTG Quote). ... I like Met (MET Quote). I like Pru (PRU Quote)," he said. He was also bearish on AIG (AIG Quote) and expressed concern over legal problems at Allstate (ALL Quote).