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NEW YORK ( TheStreet) -- Before you buy a stock, ask yourself if the company's products can easily be duplicated. If the answer is yes, then think twice, Jim Cramer said on "Mad Money" Tuesday. Today's markets are all about commodities versus proprietary products, and those companies that are commodities are getting tossed aside, he said.
Some companies can turn commodities into something proprietary, said Cramer, which is exactly how Starbucks (SBUX) can charge twice as much for a cup of joe and why its stores command twice the same-store sales as rival Dunkin Brands (DNKN). That's also why shares of DuPont (DD) vaulted over 10% in today's trading, after management just hinted it may be leaving the commodity business that is titanium dioxide.
Things like fertilizer are true commodities, Cramer explained, but for things like paper, International Paper (IP) has been able to transcend the market by expanding into emerging markets. The airlines have made the jump as well, thanks to a string of mergers and bankruptcies. But in technology, companies such as Seagate (STX) and SanDisk (SNDK) struggle to differentiate themselves.Retail brands such as PVH Corp (PVH) are unique, said Cramer, so they can command great margins. So, too, can orphan drug makers. But carbonated beverages? Not a chance. That's why those stocks are also under a lot of pressure of late.