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: A Family Affair

Stocks in this article: DIS MCD HAS WFM CCL GM ALK CHUY BKS C GIMO DUK UA RAX AMZN NKE CVS GPS WAG AAPL GOOG RAD

Cramer explained that after years of lagging its peers, Rite Aid was finally able to turn itself around earlier this year. The company delivered monster earnings in April, making 13 cents a share when the analysts were expecting just 1 cent. Then it announced the refinancing of much of its high-interest debts at much more favorable rates. That news sent shares soaring but it also created a big problem, Cramer said.

The problem is valuation -- Rite Aid now trades at 12.9 times earnings, just a hair below that of CVS at 13.2 times and Walgreens (WAG) at 13.4 times earnings. CVS and Walgreens offer dividends. Rite Aid does not.

That's why Cramer said it's time to ring the register on Rite Aid and move into CVS, which not only is a better retailer but also benefits from Caremark, its pharmacy benefit management service. With millions more Americans set to have health insurance, Cramer said CVS will be the natural beneficiary on both sides of its business.

Least Valuable Players

For the next installment of his Miami versus San Antonio basketball-style shootout, Cramer shifted gears from the winning stocks from each city to the "least valuable players," the stocks investors need to avoid at all costs.

From Miami, Cramer said the choice was easy: Carnival Cruises (CCL), the ship operator that seems to be doing everything in its power to make sure no one ever takes a cruise again, Cramer quipped. He said less than a year after the company's disaster off the shores of Italy, another Carnival ship lost power and was set adrift for five days, leaving patrons most uncomfortable and in unsanitary conditions.

While Carnival initially said the incident would only ding earnings by 10 cents a share, it was forced to later revise those numbers and cut full-year guidance.

But San Antonio has its losers, too, noted Cramer, mainly Rackspace (RAX), the data center operator that now finds itself in a commodity business fighting against the likes of Amazon.com (AMZN) and others. Cramer said that after reporting an abysmal quarter, shares fell from $75 to $60 a share but still trade at 40 times earnings.

While both stocks are bad, Cramer said Rackspace wins the "least valuable" award because the company can do little to change its position in the marketplace.

Lightning Round

In the Lightning Round, Cramer was bullish on Barnes & Noble (BKS), Citigroup (C), Gigamon (GIMO), Duke Energy (DUK) and Under Armour (UA).

Cramer was bearish on Chuy's Holdings (CHUY).

Quizzing Cramer

In a special "Quiz Cramer" segment, Cramer took questions from his audience.

When asked how to teach younger investors the patience needed to invest for the long haul, Cramer said he advises that all investors look for stocks they think will do well in 2015. He said by setting a longer time horizon, it's easier to let short-term gains keep going.

When asked whether it's time to sell General Motors (GM), Cramer said he'd hold onto that stock until the company resumes paying a bountiful dividend.

Finally, when asked for a stock pick from the quizzer's home state of Alaska, Cramer said he's still a fan of Alaska Air (ALK).

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 a position in AAPL.

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.

2 of 2

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