Cramer's 'Mad Money' Recap: An Irrational Stock Market
So should investors sell Pfizer to buy Zoetis? Cramer said absolutely not! Pfizer will retain 80% of Zoetis after the IPO and will be using the proceeds to reward shareholders with a sizable stock buyback. In addition, the split companies will both receive higher market valuations as individual companies are easier for analysts to value.
Cramer said he would get in on the Zoetis IPO if possible, but noted that existing Pfizer shareholders will also do quite well in 2013.
Riding the Rails
There's a bull market roaring on America's rails, Cramer told viewers, but that doesn't mean investors should jump into just any rail stock. He said while railroad operators CSX (CSX) and Norfolk Southern (NSC) have all posted terrific results, it's the rail car makers that represent the most value.
Specifically, the demand for tanker cars has been red-hot as the American energy renaissance has created the need for thousands of new tankers. Other industries need them, too, to move everything from chemicals to corn syrup.The railroad business is highly cyclical, Cramer warned, which means that if the economy falters, this group will be hit hard. But if America continues to recover, then the rail car makers is the place to be. Of the four major players, Cramer said that American Railcar (ARII) is his favorite, as the company gets 20% of sales from tankers and it offers a 2.8% dividend. Next on the list would be Trinity Industries (TRN), which also gets 20% of revenue from tankers. Unlike American, Trinity has exposure to other industries such as barges and windmills, which makes it more risky. Cramer said he'd avoid FreightCar America (RAIL) because that car maker has a lot of exposure to the weak coal market. He is also not a fan of Greenbriar (GBX).
Lightning RoundIn the Lightning Round, Cramer was bullish on EOG Resources (EOG), Westar Energy (WR), Morgan Stanley (MS), Duke Energy (DUK), Masco (MAS), Healthcare Trust of America (HTA) and Travelers Companies (TRV). Cramer was bearish on Isis Pharmaceuticals (ISIS), Nuance Communications (NUAN) and Genworth Financial (GNW).
Am I Diversified?In the "Am I Diversified?" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets.
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