This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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: Market Negativity Ebbs (Final)

Stocks in this article: BEAM DEO AMZN VGR PM KMR MO MKC MWE

Deere Looks Attractive

It's time to buy some Deere & Company (DE), Cramer told viewers, as he featured the stock owned by his charitable trust, Action Alerts PLUS . Cramer said that Deere is not only a cheap stock, but one with a short and long-term catalyst to boot.

John Deere is largest maker of agriculture equipment on earth and despite strong earnings and raised guidance, shares have still traded down 16% on the year and at a 30% discount to the company's historical price earnings multiple. Cramer said he's start a small position at current levels, and buy even more on any pullback.

In the short term, Cramer said he expects Wednesday's crop report from the Department of Agriculture to be a positive for the stock, while in the longer term, he likes the global trend that calls for a 70% increase in food production by 2050 to feed the world's estimated 9.1 billion inhabitants.

Not only will there be a lot more people, said Cramer, but those people will be eating more grains and more meat, which also requires more grains. He said the only way to feed everyone will be with more output per acre of farm land, and that requires more Deere.

Cramer said he also likes the internals of Deere's stock, as the company is taking market share, expanding international sales and has a stock buyback and a 2.3% dividend. Shares of Deere are trading at just 10.2 times earnings, despite a historical average of 14.9 times earnings.

Best of Breed

Now that Fortune Brands has been broken up into three companies, Cramer said that Beam (BEAM), Fortune's former liquor unit, is the one to buy.

Cramer explained that the old Fortune Brands, which made everything from golf equipment to kitchen cabinets to premium liquor, never really made much sense under one roof, but now that Beam is a best of breed, stand alone pure-play on liquor, it's the only division that matters.

Unlike all other spirits companies, Cramer said Beam is the only one that's not family-owned or mired with complex voting issues that would prevent a takeover. He said Beam would be an excellent fit for a company like Diageo (DEO), which also specializes in quality liquors.

Beam is also a company that works well no matter what the economy, said Cramer, as evidenced by the company's August volumes, which rose by 11.9%, far higher than the industry average of 4.7%.

Cramer said that Beam has a "magic formula" which includes investing in its brands and marketing, while at the same time innovating on new products. Nearly 25% of Beam's growth stems from new products, he noted.

Beam also has pricing power, said Cramer, and the company pays a respectable 1.6% dividend as well. He said that Beam does trade at a premium multiple, but considering all the company has going for it, it deserves that multiple.

2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

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