'Mad Money' Recap: Cash for Caulkers

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NEW YORK (TheStreet) -- "Sometimes investors need to take a look around at the big picture," Jim Cramer told the viewers of his "Mad Money" TV show Wednesday.

He said while the markets were essentially flat today, he found the next big investment idea on the front page of the New York Times.

Cramer said the article highlighted a stimulus plan proposed by former President Bill Clinton for home weatherization incentives, aptly named "Cash For Caulkers." Cramer said the plan, if passed, could be a huge windfall, if you know which companies will be the beneficiaries.

Cramer said the "Cash For Clunkers" auto program was great for auto dealers like AutoNation (AN Quote) and Carmax (KMX Quote), which were up 80% to 90% from the time the plan was merely speculation until it became law. The same will be true for companies that can take advantage of residential home weatherization, he said.

Cramer said the obvious choices for who would benefit from making homes more energy efficient would be Owens Corning (OC Quote), which is the leader in home insulation, and Home Depot (HD Quote), a stock which Cramer owns for his charitable trust, Action Alerts PLUS, and the likely place homeowners and contractors would go for their insulation, caulking and weatherization needs.

However Cramer said there are some less obvious companies that would benefit from the plan as well. He said a company like Cypress Semiconductor (CY Quote), whose Envirosystems division is developing wireless thermostats that can be monitored and remotely controlled, is likely to benefit. As is Watsco (WSO Quote), one of the installation leaders in high-efficiency residential heating, ventilation and air conditioning systems.

"Don't wait until cash for caulkers becomes law," said Cramer. The time to invest in these names is now, he said.

Time to Reconsider

Cramer did an about face on a group that he's been telling investors to avoid. He said the Canadian Energy Trusts are a group that can no longer be ignored, and every single company in the group can now be bought.

What changed? Cramer said he'd initially panned this group because of they were losing their favorable tax status in Canada, meaning that its once enormous dividends were soon going to be not so enormous. But Cramer said recently these firms have begun to be taken over at huge premiums, which now makes their dividend issues seem trivial.

Cramer said while the Canadian energy trusts have been soaring on the takeover fever, U.S. investors haven't missed a thing. He said the best in the group is Baytex Energy Trust (BTE Quote), a trust with a juicy 5% dividend yield and production growth to boot.

Baytex has the least exposure to natural gas and the most exposure to crude oil, which Cramer said is a good thing since Canadian firms can't compete with U.S natural gas shale plays given the weak dollar. He said that new technology is allowing the company to extend the life of its wells, which is also great news.

Baytex is up 181% year to date, but Cramer said the company is worth it given its solid dividend, its growth prospects and the new technology it's using.

A Shift in Focus

In the "Executive Decision" segment, Cramer spoke with Larry Nichols, chairman and CEO of Devon Energy (DVN Quote), whom he last spoke with at the University of Oklahoma on Oct. 30.

On Monday, Devon announced its plan to sell its Gulf of Mexico and international properties by year's end so that it can focus on its U.S. onshore properties.

Nichols said that while he loves his international and offshore properties, the reality was that with all of their major projects working so well, they exceeded the capital the company had available to expand them.

He said that Wall Street was also not recognizing the value of these properties, adding a sale will give Devon the cash it needs to fully monetize its domestic operations.

Nichols said that Devon is maintaining its diversity between oil and natural gas and is keeping the balance between properties that investors have come to expect from the company. He said the sale is bittersweet, since it means losing great employees, but the capital raised will mean sizable investments in the company's other properties.

Finally, when asked about natural gas' prospects in Congress, Nichols said he is seeing movement on Capitol Hill. He said that clean-coal technology legislation is being pushed back until next year, and there is some renewed interest in natural gas as a bridge fuel to the future.

Cramer again threw his support behind Nichols and Devon Energy.

Am I Diversified?

Cramer played "Am I Diversified" with callers to see if their portfolios have what it takes. The first caller's portfolio included Amgen (AMGN Quote), Wal-Mart (WMT Quote), Entergy (ETR Quote), Vodaphone (VOD Quote) and Bank of America (BAC Quote).

Cramer called this a fabulous portfolio.

The second caller's top holdings included AK Steel (AKS Quote), Allscripts (MDRX Quote), Corning (GLW Quote), Applied Materials (AMAT Quote) and Crocs (CROX Quote).

Cramer said this portfolio has two technology plays. He advised selling Applied Materials and getting a financial stock.

The third caller had General Mills (GIS Quote), Abbott Labs (ABT Quote), Intel (INTC Quote), AT&T (T Quote) and Enterprise Energy Partners (EPD Quote) as their top five stocks.

Cramer called it a great portfolio.

Lightning Round

Cramer was bullish on Wynn Resorts (WYNN Quote), Tellabs (TLAB Quote), ADC Telecommunications (ADCT Quote), Brocade Communications (BRCD Quote), Echostar Communications (DISH Quote), DirecTV (DTV Quote) and CMS Energy (CMS Quote).

He was bearish on MGM Mirage (MGM Quote).

Final Note

Cramer said that Netapp (NTAP Quote) reported a monster quarter after the close and is up 50% from where he recommended it. Cramer said he'd still hold onto the stock.

-- Written by Scott Rutt in Washington

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