This Day On The Street
Continue to site
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

Cramer's 'Mad Money' Recap: Breaking Up Not Hard to Do

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

NEW YORK ( TheStreet) -- Before you sell your stocks on the latest round of euro-fears, think about News Corp (NWSA - Get Report), Jim Cramer told his "Mad Money" viewers Tuesday. He said just the rumor the media giant might be breaking itself in two proves just how undervalued stocks have become.

If News Corp does indeed follow up on the rumors and split its fast-growing entertainment division from its non-growing publishing business, Cramer said shares could be worth up to $28. That's proof positive the markets aren't even looking at the fundamentals of the underlying companies anymore, he said.

The split makes total sense, noted Cramer, as News Corp's film and cable divisions are growing a 8% and 15%, while its news and magazine divisions are shrinking by 24% and 19%. That means that growth fund managers can pile into the entertainment division at lofty valuations while more conservative investors can stick with the lower valuations of the news division.

But News Corp is symbolic of a larger problem, said Cramer, as company after company is realizing just how poorly the markets are valuing their stocks and are doing something about it. Kraft (KFT), Sara Lee (SLE), ConocoPhillips (COP) and Marathon Oil (MRO) have already announced breakup plans, and many more companies could follow suit.

So before investors sell their stocks based on the next Spanish bond auction or bailout plan, Cramer told them to think about these names and think about how much value there really is underneath that beaten down share price.

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Tim Main, CEO of Jabil Circuit (JBL - Get Report), a contract manufacturer that delivered in-line earnings when it last reported but also offered cloudy guidance for the rest of 2012. Shares of Jabil are eight points off their highs, trading at just seven times earnings with a 12% growth rate.

Main said Jabil has hit a "flat spot" in its growth and is currently a little below the trend line set at the beginning of the year. He said the company's transition away from consumer electronics and into industrial and medical applications is being hurt by the global slowdown, but by 2013 he expects growth to return along with more stable performance.
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FDX $160.37 -2.95%
JBL $17.09 -0.64%
NWSA $12.17 0.16%
UPS $102.14 -0.94%
AAPL $93.24 -0.41%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs