Cramer's 'Mad Money' Recap: June 30

Cramer predicted that healthcare and medical reform companies will outperform every sector in the market with the possible exception of oil and gas in the coming quarter.

"Medicare is a huge, non-economically sensitive giveaway to a lot of companies," he said.

A Boost for Dialysis Providers

Cramer said Fresenius (FMS Quote) is poised to benefit from this year's Medicare spending bill. He said dialysis is one area Congress is expected to increase funding, and Fresenius will be the primary benefactor.

Cramer said Medicare dialysis reimbursements are based on a so-called "composite rate," an aggregate number that is without an annual update formula to adjust for inflation. The composite rate has only increased two times in the past twelve years, for a total of just 3.6%.

However this year's spending bill allows for a 1% increase in 2009 and 2010, and establishes a formula to regularly adjust for inflation.

Cramer said that the dialysis market is a duopoly between Fresenius and DaVita (DVA Quote), which collectively control 60% of the U.S. market.

Cramer said both Fresenius and DaVita are terrific companies, but he likes the larger Fresenius for its growth and international footprint. With 173,000 patients worldwide, Fresenius maintains a 30% share of the market and is a vertically integrated dialysis company. Cramer called the company the "best of breed," with 25% of the company's sales coming from dialysis products.

Cramaer said he also likes Fresenius for its expansion into high-growth markets. While its U.S. revenues grew 11% domestically, its international revenues grew 24% in 2007.

With the Chinese dialysis market alone expected to grow 30% to 40% in 2008, Fresenius is poised for growth. The company trades at just 17 times its consensus earnings, but maintains an 11% long-term growth rate.

Cramer called Fresenius a $65 stock masquerading as a $54 stock and expects the company to earn $3.26 a share compared to the $3.10-a-share estimates for 2009.

A Beleaguered Industry

"If you own a house, and that house has a mortgage, you don't really own it, the bank does," Cramer told viewers.

He used the analogy to drive home the point that while the stocks of both General Motors (GM Quote) and Ford (F Quote) look cheap in the single digits, it's the bond holders, not the stock holders, who really control the company.

Cramer said that both GM and Ford have simply borrowed more than they can repay, leaving the bondholders in control of their destiny. He said that despite their huge assets, GM has a negative book value and Ford's book value is barely zero.

Cramer compared the fate of both companies to that of Bethlehem Steel in the 1980's. Then, Bethlehem Steel was one of the largest companies in the world. But over time, its pension, healthcare and bond obligations crushed the company until one day, it simply canceled its common stock. "The bondholders are in control," said Cramer, "not the shareholders."

Cramer said he wouldn't own either company and extended the warning to shares of many of the ailing bank stocks as well. He called all of them far more speculative than he would ever recommend on "Mad Money." "No matter how low they are," he cautioned, "they can still go to zero."

A Juicy Dividend

Cramer welcomed Glen Post, chairman and CEO of CenturyTel (CTL Quote) to the show to discuss his company's recent decision to increase its dividend ten-fold to return more money to its shareholders.

Post said that after years of buying back shares, CenturyTel still had significant free cash flow and felt the increase would help bridge the gap between its share price and the true value of the company.

He said that CenturyTel has a high-quality fiber network in place and is bringing broadband Internet services to over 85% of their customers today. He expects to see broadband services continue to be strong and expects CenturyTel to continue to prosper.

Cramer commended Post for returning value to shareholders and told viewers to just start buying.

Sudden Death

Cramer was bullish on Nike (NKE Quote) and Research In Motion (RIMM Quote).

He was bearish on Corning (GLW Quote).

Lightning Round

Mastercard (MA Quote), Accenture (ACN Quote), Rex Energy (REXX Quote), Chesapeake Energy (CHK Quote), Applied Materials (AMAT Quote), First Solar (FSLR Quote) and Consolidated Edison (ED Quote).

Cramer was bearish on American Oriental (AOB Quote), Visa (V Quote), Tata Motors (TTM Quote), ingli Green Energy (YGE Quote), BJ's Restaurants (BJRI Quote) and Canadian Solar (CSIQ Quote).

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For more of Cramer's insights during the Lightning Round, click here.