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: All Is Not Lost

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


NEW YORK (TheStreet) -- The U.S. economy was almost there, almost ready to spring higher, Jim Cramer told his"Mad Money" TV show viewers Thursday. But then Washington got involved, and all was lost. We're now facing the first congressionally mandated bear market we've ever seen, said Cramer, all because 536 people couldn't agree.

Cramer said it's downright infuriating, just when the housing market was beginning to recover, just when autos were getting stronger, when retail sales were growing and when the banks looked like they were finally finding their footing, Congress has been able to undo it all and send our markets sharply lower. For the year, U.S. stocks are now up just half of their counterparts in Europe, and Europe is in a recession.

So how can investors measure the damage and begin to ascertain when things might be getting better? Cramer came up with three indicators to help. First was the "Washington on TV" indicator. He said anytime the president or member of Congress gets on the air, expect the markets to go lower.

Cramer's second indicator was Lockheed Martin (LMT), the defense contractor with a 5% dividend yield. If the U.S. falls over the fiscal cliff, Lockheed will get hurt by both defense spending cuts and a rise in dividend taxes, Cramer noted, making this stock uniquely positioned to feel the blow.

Finally, Cramer said investors can use Cisco (CSCO), Home Depot (HD) and Petsmart (PETM) as gauges for Washington's damage. Cramer said all three of these companies posted stellar earnings, so if they can't hold onto their gains, no one can.

All of these indicators should help investors figure out whether the effects of the fiscal cliff are baked into the markets and whether its time to begin buying back in.

Sell Block

In the Thursday "Sell Block" segment, Cramer reminded viewers some stocks go down because they deserve to, and that's certainly the case with J.C. Penney (JCP).

Cramer said investors may be tempted by shares of J.C. Penney, which have fallen 61% from their highs, but the company remains a value trap and is showing no signs of improving. Penney has had three disappointing quarters in a row, Cramer noted, and sales still continue to decline, dramatically so, and the company's balance sheet is weakening.

Penney remains in a tailspin, Cramer said, and is offering no clarity on where it plans to go. Initially, CEO Ron Johnson laid out a plan with no coupons, but after customers revolted a few were added back in, then more followed. While it's true that Penney is remodeling its stores, the company may go broke doing so.

Cramer said the bulls point to J.C. Penney's real estate, as the company owns 426 of its own stores. But Cramer questioned that logic, saying there are almost no buyers for stores as large as Penney, meaning they could sell for a fraction of what the company thinks they are worth.

Cramer was also negative on Penney's new store-within-a-store concept, saying that many of Penney's brands are mediocre at best.

Cramer reminded viewers that no company has a right to exist in retail, just ask the former Litz, Gimbles or Woolworths. With the company's "so what" brands and its confusing pricing, the chain may simply have no reason so exist in today's marketplace.

Upside Surprise Party

Continuing with his "Upside Surprise Party" series of stocks to buy as the markets continue to fall on fiscal cliff worries, Cramer recommended drug maker Amgen (AMGN), a company with a huge pipeline of new drugs on the way and a 1.7% yield.

Cramer said Amgen is predicted to double its earnings per share over the next eight years and recently delivered the "triple play" of earnings, including a 20-cent-a-share earnings beat, a 9.5% rise in revenue and upside guidance. After the release, shares rose sharply higher, but have since fallen 6.3% with the broader markets, despite doing everything right.

Cramer said Amgen is the type of stock that will lose less as the market falls and gain more when it recovers. The company's drug for abnormally high cholesterol, AMG145, could be a $2.5 billion opportunity for the company. Amgen also has a substantial stock repurchase program and plans to grow its dividend over time.

Trading at just 12 times earnings with a 10.5% long-term growth rate, Cramer said he's never seen Amgen trade as low as it is right now.

Lightning Round

In the Lightning Round, Cramer was bullish on Isis Pharmaceuticals (ISIS), Southwestern Energy (SWN), American Capital Agency (AGNC), CenturyLink (CTL), AT&T (T), Verizon (VZ) and Kinder Morgan Energy Partners (KMP).

Cramer was bearish on Chesapeake Energy (CHK) and Windstream (WIN).

Executive Decision

In the "Executive Decision" segment, Cramer sat down with Robert Carr, chairman and CEO of Heartland Payment Systems (HPY), our nation's fifth-largest payment processor. Heartland's most recent quarterly results included a 5-cent-a-share earnings beat on better-than-expected revenue with upside guidance.

Carr explained Heartland currently services 250,000 merchants and is the company at the other end of the phone when merchants call in to process a payment. He said his company authorizes the transaction and then pays the merchants in the days that follow. Heartland started as the 62nd largest processor in the country and has risen to No. 5 in just 15 years.

Carr also discussed the 2009 incident where hackers penetrated Heartland's systems, along with 300 other companies. He said Heartland responded quickly and afterward introduced end-to-end encryption for transactions so hackers can no longer cause similar damage. They also created an industry group to share security information to help the entire industry better protect itself.

Carr talked about new innovations in the payments world by saying Heartland welcomes the changes. He said there are currently about 9 million merchants in the U.S., but the addition of so-called micro-merchants could take that number to 25 million. Carr showed off Heartland's mobile payment system that uses a smart phone to allow merchants to process payments even if they lose electricity.

Cramer said Heartland Payment Systems is a great story.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer offered viewers his quick "Top 5" reasons why they shouldn't be sellers in Friday's market.

First, Cramer said stocks are already very oversold, meaning there will be a better time to sell later.

Second, while many stocks will be impacted by the fiscal cliff, others, like international names, will not, which is why it's prudent to buy, not sell, into weakness.

Third, Cramer noted everything gets baked into stock prices eventually, and stocks often bottom before big events occur, not after.

Fourth, Cramer said the higher taxes and spending cuts of the fiscal cliff won't be the end of the world for certain sectors, like health care and those that offer consumers a bargain.

Finally, Cramer said companies with big dividends will likely be able to raise those dividends to cover, at least partially, any higher tax rates from the fiscal cliff.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

At the time of publication, Cramer's Action Alerts PLUS had no positions in stocks mentioned.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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