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Jim Cramer's Stop Trading! KB and the Sunshine Band

Cramer says doom-and-gloom talk is overdone.

A solid quarter at

KB Home

(KBH) - Get KB Home Report

shows how bearish coverage of the homebuilding sector has spun out of control, Jim Cramer said Tuesday on


's "Stop Trading!" segment.

Cramer noted that the average price of a house sold by KB rose 4% from a year ago in the latest quarter and that revenue rose over all as well. Cramer said these underlying fundamentals show that the Los Angeles-based homebuilder is ripe for a takeover.

But people "are so busy burying this company," Cramer lamented, that the strength of KB's position is being ignored, Tuesday's 4% rise in the stock notwithstanding.

Cramer said chatter of a bid for


(AA) - Get Alcoa Corp. Report

makes sense because the last year or two has shown that "undermanaged companies" in the metals sector have gotten takeout deals. Cramer said he expects

Rio Tinto


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to buy the Pittsburgh-based aluminum smelter, whose shares were up 6% Tuesday.

Cramer also lamented a $7 billion buyback plan at


(MMM) - Get 3M Company Report

, saying management should "fix the company first."

At the time of publication, Cramer had no positions in stocks mentioned.

Jim Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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