This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cramer's 'Mad Money' Recap: Promising Signs (Final)

Real Dogs

"Most losers stay losers," Cramer told viewers, as he examined the dogs of the S&P 500 for 2010. Just because a stock has come down, said Cramer, doesn't make it cheap. While may big losers eventually snap back, bad companies are not worth owning at any price.

When Cramer last looked at the dogs of the S&P back in July, the results were incredibly positive. Cramer identified Nvidia (NVDA), Jabil Circuit (JBL) and Verizon (VZ), three stocks that are up 55%, 44% and 42% respectively.

But this year's dog are a different story, said Cramer. They include Dean Foods (DF), H&R Block (HRB), Apollo Group (APOL), Diamond Offshore (DO), Supervalu (SVU), Western Digital (WDC) and Pulte Homes (PHM).

With each of these stocks declining between 24% and 55% over the past year, Cramer said investors may be tempted to buy into these stocks.

But secular trends are working against each and every one, said Cramer, from Dean Foods, which is fighting overcapacity, to Diamond Offshore, which has the wrong type of drilling rigs, to Supervalu, which is struggling with its Albertson's acquisition.

Cramer said in the oil patch, stocks like Schlumberger (SLB), or Action Alerts PLUS name Weatherford (WFT), would be better plays. Investors looking for housing exposure need to consider Bank of America, said Cramer.

Of all of the dogs he examined, Cramer said he wouldn't be a buyer of any of them.

A Second Look

Some dogs can be winners, said Cramer, as he uncovered three stocks that are worth a second look.

Coming in third was memory chip maker Micron (MU), a stock that was down 24% last year.

Cramer said this company is rapidly moving from old school DRAM memory into the hot new flash memory that goes into tablets and other mobile devices. He said at eight times earnings, Micron is a speculative way to play the continued growth of Apple (AAPL), an Action Alerts PLUS bellwether.

Coming in second, steel maker AK Steel (AKS), who saw its shares slide 23% in 2010. Cramer said AK Steel is a cyclical play, and with aluminum and steel being late in the recovery cycle, AK may be in the sweet spot for 2011. He also liked AK for the possibility of a takeover.

And the winner of Cramer's dogs of the S&P 500 contest is Southwestern Energy (SWN), a provider of natural gas that was down 22% in 2010.

Cramer said Southwestern got crushed by falling natural gas prices, but with prices now stabilizing, Southwestern should recover. While the stock was down for 2010, the company has delivered a 2,600% gain over the past decade. "Don't count this one out," said Cramer.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,079.57 -42.44 -0.25%
S&P 500 1,996.74 -3.38 -0.17%
NASDAQ 4,557.6950 -11.9260 -0.26%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs