Cramer's 'Mad Money' Recap: Aug. 27

Stick With Walgreen

For his "In The Ring" segment, Cramer pitted CVS Caremark (CVS Quote) against Walgreen (WAG Quote), which he also owns for his Action Alerts PLUS portfolio, to determine which drugstore giant is the better buy.

When looking at the drugstore sector overall, Cramer gave both company's a 4 out of 5, as drugstores offer safety and consistency in uncertain markets. He reminded viewers that 50% of a stock's performance is usually linked to its sector.

Next, Cramer looked at growth. For drugstores, Cramer said the key metric is same-store sales. CVS last reported same-store sales up 3.1%, while Walgreen reported 4.1%, giving the latter a one-point lead on Cramer's scorecard.

Cramer also considered each company's growth strategy. Last year CVS acquired Caremark, a pharmacy benefits manager, and by all accounts that acquisition has not gone well.

Meanwhile, Walgreen has stuck to its core strategy of being just a great pharmacy and drugstore, he said. Cramer awarded one point to CVS for its strategy, but none for its execution, while awarding Walgreen a point for its simplicity.

In the end, Cramer said Walgreen comes out on top 7-5 on his scorecard. He said this is not a market that values complexity or poor execution and CVS unfortunately has both.

Am I Diversified?

Cramer spoke with callers to see if their portfolios have what it takes.

The first caller's portfolio included Altria (MO Quote), Bristol-Myers Squibb (BMY Quote), Nike (NKE Quote), General Electric (GE Quote) and Cisco (CSCO Quote).

Cramer called this portfolio "perfect" and said he loved it.

The second caller's top holdings included Great Lakes Dredge (GLDD Quote), Darling Int'l (DAR Quote), Frontline (FRO Quote), Tupperware (TUP Quote) and Temple Inland (TIN Quote).

Cramer said this portfolio also was perfect for this market.

The third caller had Coca-Cola (KO Quote), Terra Int'l (TRA Quote), Hewlett-Packard (HPQ Quote), John Deere (DE Quote) and Amgen (AMGN Quote) as their top five stocks.

Cramer identified two of a kind with Terra and Deere, and he recommended selling Terra for a defense stock or industrial company.

Mad Mail

In this segment, Cramer clarified an earlier "Sudden Death" call to sell Banco Santander-Chile (SAN Quote).

He said he still likes Santander but he meant to say he recommended selling the European bank Banco Santander (STD Quote).

He told a second viewer not to invest in any single home building stock, but instead to invest in a home building index if they feel home builders are on the rise.

Sudden Death

Cramer was bullish on Dawson Geophysica (DWSN Quote), Bristol-Myers Squibb (BMY Quote) and Energen (EGN Quote).

Lightning Round

Cramer was bullish on Emerson Electric (EMR Quote), Cisco Systems (CSCO Quote), GrafTech International (GTI Quote), Verizon (VZ Quote), Google (GOOG Quote) and Cummins (CMI Quote).

He was bearish on Terra Nitrogen (TNH Quote), Ambac Financial Group (ABK Quote) and ACCO Brands (ABD Quote). P/>Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

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