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NEW YORK (
) -- With President Obama's agenda stumbling and his popularity waning, Jim Cramer told viewers of his "Mad Money" TV show Thursday that it's now safe to buy the companies that were once in Obama's crosshairs.
Cramer unveiled a compelling chart that overlaid Obama's disapproval rating with that of the
S&P 500 Index
to illustrate his point. The two lines ran in perfect lock-step, with the S&P rising as Obama's popularity stumbled.
He said with all of the president's major initiatives, like "card check" forced arbitration for unions, cap and trade for utilities, and healthcare reforms, are running into road blocks, Cramer said it's safe for investors to start buying into these affected sectors.
Cramer advised investors keep a diversified portfolio, with 20% in gold as a hedge against chaos, another 20% in international stocks, and a third 20% in health care, a sector which Cramer said is ready to surge higher.
Cramer said with government-run health care seemingly off the table, the healthcare stocks will be a classic "multiple expansion" story, with investors now willing to pay more for these companies' earnings now that they know those earnings are safe.
remained Cramer's favorite healthcare name. He said this stock, which trades at just eight times earnings, should fetch 13 times earnings. He said the company is well-capitalized and is buying back stock to help bolster its share price.
Cramer also gave the nod to the speculative
, a company that's raised guidance twice so far this year. He also said
, a stock which he owns for his charitable trust,
Action Alerts PLUS, should also fare well in this environment.
Cramer said if investors are willing to pay historical multiples for these names, they could see a 35% gain in the share price of Wellpoint, while Triple-S could pop 57%.
The Nuclear Option
In the fight for clean, renewable energy, Cramer explored the nuclear option with Jim Bernhard, chairman and CEO of
( SGR), to get the latest on the nuclear industry.
Bernhard said nuclear energy is the cleanest fuel around and will have to be a part of our country's future. He said he's beginning to see encouraging signs coming from Washington on the matter, including new legislation that favors expanding current reactor sites.
Bernhard said Shaw Group is working on the preprocessing of plutonium, which could allow up to 75% of the nuclear waste products to be recycled and reused, as they do in other countries. Shaw Group has already hired 1,000 new employees in the nuclear field and expects to hire some 2,000 more, he said.
In addition to nuclear, Bernhard said Shaw Group's infrastructure business and its energy and chemical division are doing well.
With site preparation already underway in Georgia and South Carolina for new reactors, Shaw is poised to continue its 20-year history of completing nuclear facilities on time and under budget, he said.
In the Thursday "Sell Block" segment, Cramer said he'd hedge his bets in the home video entertainment space and sell
while at the same time, buying
, which owns the "Red Box" video rental kiosks that rent DVDs for just $1.
Cramer said in the home video space, it's clear the people are just not buying DVDs anymore and building home libraries of them. Instead, a battle has begun between the phone companies, the cable companies, and brick-and-mortar stores like
( BBI) to see who will get consumers' home entertainment dollars.
Cramer said while he likes Netflix, the industry leader in DVD rentals by mail, the Red Box model is brilliant, with a huge upside. Coinstar is trading at 37 times earnings, which Cramer said is cheap compared to the company's growth potential. The company already has a 14% share of the DVD rental market, but Red Box is estimated to grow 61% in the next year, as the company expands its kiosks to more locations.
Cramer said recent lawsuits over content distribution are worrisome, but noted that the growth outweighs the risk. He's a buyer of Coinstar, and as a hedge, he'd also be a seller of Netflix.
In his "Eureka Moment" segment, Cramer welcomed Mark Benioff, chairman and CEO of
, to the show to discuss that company's upside surprise that included both better-than-expected revenue and earnings.
Benioff said Saleforce.com had a remarkable quarter that saw a 32% increase in its customer base. He said the company now has $1 billion of cash on hand and has raised both revenue and earnings per-share guidance for the upcoming year.
When asked about the economy, Benioff said that with such a diverse user based Salesforce.com will begin to benefit as those users add more licenses when the economy recovers. He also said his company is making big strides in adding new customers in the insurance industry and also internationally.
Cramer said he continues to be behind Salesforce.com, as it, along with
are the only two technology companies to beat on both the top and bottom lines.
Cramer was bullish on
Nordic American Tanker
Cramer was bearish on
( ME) and
-- Written by Scott Rutt in Washington
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At the time of publication, Cramer was long ESRX.
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."
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