Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
NEW YORK ( TheStreet) -- It's time to dust off your 2012 game plan, Jim Cramer said on Mad Money Tuesday. The markets are once again divided into two groups -- companies that are impacted by European events and those that aren't.
Yes, it's 2012 all over again, Cramer told viewers. Investors are dumping the industrial and technology stocks in favor of anything domestic, including health care, transportation, restaurants and entertainment. With the U.S. dollar continuing to strengthen, the banks and the consumer packaged goods stocks continue to slide, but names like Twitter (TWTR) , a stock he owns for his charitable trust, Action Alerts PLUS, GoPro (GPRO) , Tesla Motors (TSLA) and Netflix (NFLX) will likely be go-to names for money managers for the rest of the year.
Read More: 7 Stocks Warren Buffett Is Selling in 2014
Stocking Up on VitaminsThere are too many bricks and mortar stores in America, Cramer told viewers, which is why the markets have been rewarding companies making acquisitions, merging to take out their competition and preserve their growth and margins. That's why Cramer said he's a big fan of a recent report suggesting GNC Holdings (GNC - Get Report) will acquire its rival, Vitamin Shoppe (VSI - Get Report) . He said these two chains are suffering at the hand of intense competition, but a combined company would indeed be a thing of beauty. Cramer said according to his own research, a full 100% of Vitamin Shoppe locations are within five miles of a GNC location. By shutting down half of those locations, a combined company could cut costs in half and still preserve almost all their sales. Even just merging back-end operations would be a huge win for GNC. Read More: Big Three U.S. Airlines and Labor Get First Round Win Over Norwegian Air
Vitamin Shoppe shares trade at just 15.4 times earnings, Cramer noted, so even offering a 35% premium would still be a steal for GNC. Projecting $140 million in synergies, Cramer said the combined company would see a huge 40% increase in earnings.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts