Cramer's 'Mad Money Recap': Yum! Brands' Delicious Global Business

The world's largest restaurant chain is rapidly growing overseas, especially in China.
By TheStreet.com Staff ,

Click here for an archive of Cramer's "Mad Money" recaps.

Despite skyrocketing food costs,

Yum! Brands

(YUM) - Get Report

recently turned in an incredible quarter and is now trading at close to its 52-week high, Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

Cramer welcomed David Novak, president and CEO of Yum!, to the show to find out more about the company's run of success.

Yum!, whose brands include Kentucky Fried Chicken, Pizza Hut and Taco Bell, beat earnings estimates in the past quarter by 2 cents a share and the stock is up 65% since Cramer first recommended it on Oct. 11, 2005. Cramer called Yum! an incredibly well run international growth story.

Cramer Interviews ConAgra CEO

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1519803222; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

Novak said Yum!'s business is booming in China and around the globe, with expectations for another great year.

Asked about China in particular, Novak said he expects his company's 3,000 store footprint in China to far exceed the 18,000 stores it has in the U.S.

He also said that Yum has overcome China's high inflation by increasing its sales and opening more new stores.

Novak said that he is very pleased with Yum!'s strong portfolio of brands and its international exposure, noting the company is able to weather just about any storm and still deliver consistent results.

When asked about Yum's domestic business, Novak said that the company is transforming its menus to strengthen all of its brands. Pizza Hut, for example, will be expanding to offer pasta while KFC will be offering grilled chicken. Novak said the changes will unlock the value of the company's brands.

Cramer told viewers that they need to "get with the program" and invest in this booming international story. "I want to be in Yum!" he declared.

America's New Technology

Cramer declared that America is once again the greatest manufacturing nation. He cited both superior engineering and the weak dollar as the catalysts driving the country's new economy.

Cramer cited

Parker Hannifin

(PH) - Get Report

as one of America's new manufacturing companies. He said the company is on the cutting edge of industrial technology in such areas as electrical engineering products and motion and control systems for commercial trucks and aerospace.

Cramer welcomed Don Washkewicz, chairman, president and CEO of Parker Hannifin, to discuss his company's bright outlook.

Washkewicz said that his company has just completed a seven-year transformation from a largely domestic company into a company that now derives 55% of its sales overseas.

3 Stocks I Saw on TV

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1529437560; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

"North America is in recession, but Parker Hannifin is not," said Washkewicz. And while he admits having felt the downfall of the U.S. economy, Washkewicz feels that it will only be a matter of time until that economy starts to recover.

In the meantime, he said, "you have to be in every region around the world."

Cramer called Parker Hannifin one of the greatest manufacturing companies in the world. Of the sixteen analysts covering the company, he noted that only four rate it a buy, while 12 have it as a hold. "Those people are morons," said Cramer.

The ConAgra Conundrum

In light of the surprise bid for

Wrigley

( WWY), Cramer discussed why his recommendation of

ConAgra

(CAG) - Get Report

hasn't been working.

Cramer first recommended ConAgra on Oct. 26, 2005, and then again on March 28, 2006. Those calls are down 10% and 6% respectively.

"Why hasn't this worked?" he asked. ConAgra, he explained, is a great food company, with 27 different brands that are either No. 1 or No. 2 in their categories. Cramer expected the company to increase profits through cost savings, but instead, higher raw food costs have derailed that plan.

Cramer welcomed Gary Rodkin, president and CEO of ConAgra, to explain what's happening. Rodkin expressed his confidence in his company's business model and its strong brand portfolio.

He defended the sale of the commodity food business, saying it will help transform ConAgra into a more lucrative packaged food company.

Rodkin explained that a combination of strong global demand, a weak dollar sparking exports, and the U.S.'s current energy policy that promotes increased ethanol production are all contributing to the company's higher food costs.''

However, Rodkin feels selling the commodity side of their business will make ConAgra a better business that's more focused on what matters.

Cramer reserved judgment on ConAgra. He told investors if they believe raw costs will continue to rise, they should choose to stay away from ConAgra, but if not, the company's great brands are selling for way too little.

Lightning Round

In the Lightning Round, Cramer was bullish on

Diageo

(DEO) - Get Report

,

Schering-Plough

( SGP),

Ford Motor

(F) - Get Report

,

AT&T

(T) - Get Report

,

Verizon

(VZ) - Get Report

,

Atlas Energy Resources

( ATN)and

Yamana Gold

(AUY) - Get Report

.

Cramer was bearish on

LSI Logic

(LSI) - Get Report

,

Lifecell

( LIFC)and

Citizens Communications

( CZN).

Want more Cramer? Check out Jim's rules and commandments for investing by

clicking here

.

For more of Cramer's insights during the Lightning Round, click here

.

At the time of publication, Cramer was long Yamana Gold, Schering-Plough and Verizon.

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.

Loading ...