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NEW YORK (
) -- With the markets taking a rare pause thanks to Hurricane Sandy, Jim Cramer told his
TV show viewers Tuesday that he's had a chance to catch his breath in the middle of a busy earnings season to make some observations.
Cramer said that for the past few years, U.S. companies have been aggressively trying to distance themselves from the sluggish U.S. market, opting to "go global" and expand into Europe, China and emerging markets. That strategy worked well, he said, up until a few years ago when Europe's financial mess brought the global economy to a screeching halt. Now, the evidence is clear. Those companies that now rely on business overseas are doing poorly, while those still based largely in the U.S. are flourishing.
That's certainly the case with
, a company whose strength in the U.S. was almost completely wiped out by losses in Europe. Banks like
, a stock he owns for his charitable trust,
Action Alerts PLUS, are firmly rooted in U.S. mortgages, said Cramer, and they are performing well, as are others like
Meanwhile, companies like
are floundering as their big bet on Europe failed to pay off. Likewise with
Stanley Black & Decker
and luxury retailer
Cramer said this season's earnings have proven time and time again that it's hard to make money overseas, and the easy money is once again back in the U.S. of A.
Buying Into News Corp
Breaking up is easy to do, Cramer reminded viewers, as he highlighted yet another company that's splitting itself apart in an effort to unlock value.
He said his charitable trust,
Action Alerts PLUS, has been buying shares of
ahead of the company's plan to spin off of its publishing assets.
Cramer said News Corp is a "best of breed" media company, with solid assets in its Fox News cable franchise, its Fox TV network and its satellite TV and content businesses. The company does have an Achilles heel, however, and that's its slow-growing publishing division, which was hurt by a very publicized phone-hacking scandal last year. Publishing represents 27% of News Corp's revenue and that is the division the company is set to jettison next year.
Cramer said that News Corp already sports a 16.7% growth rate, even with the beleaguered publishing business. Without it, growth will surge higher for the remaining company, giving the market the opportunity to revalue it with a higher multiple. Cramer said he would use the company's disappointing quarterly results and overall market weakness to pick up shares of News Corp at this historically low multiple of just 14 times earnings.
News Corp still has a $10 billion share repurchase program in place and plans to buy back nearly 9% of its marketcap, said Cramer, which is only another reason to buy in ahead of the split.
Know Your IPO
In the "Know Your IPO" segment, Cramer told viewers that it's time for a new housing-related stock, which is why the upcoming IPO of
is a very intriguing play.
Cramer said there's no denying the rebound in housing is at hand, but the question remains of how best to invest in it. Everything from home builders like
to home furnishings retailers like
Pier 1 Imports
have already run up big for the year. That's why the little-known IPO of Restoration Hardware is so attractive.
Cramer explained that Restoration Hardware is a high-quality play on the luxury home market, as the company's 83 stores sells high-end accessories and home goods in a similar fashion to how
sells high-end kitchen items.
While a private company, Restoration Hardware has been in the middle of a notable turnaround, closing many of its low-end mall stores and replacing them with larger, freestanding galleries. Those new stores sell a lot more than just hinges and doorknobs too, as the company has expanded into high-end furnishings to rival Ethan Allen. With its new focus on high-end consumers, Resotration Hardware was able to post an impressive 27% increase in same store sales, compared to only a 7.4% increase as Williams-Sonoma.
Cramer said the IPO is expected to price between $22 and $24 a share, valuing the company at 25 times earnings. That's more than Williams-Sonoma at 16 times earnings, but given the company's stellar growth, it deserves its premium, said Cramer, which is why investors should try and get in on the IPO.
In the Lightning Round, Cramer was bullish on
Chipotle Mexican Grill
Cramer was bearish on
Off the Charts
In the "Off The Charts" segment, Cramer went head to head with colleague Dan Fitzpatrick over the direction of coal, one of the most hated commodities of 2012.
According to Fitzpatrick, a daily chart of
Dow Jones US Coal Index
shows coal in a solid downtrend since July 2011, when the index fell below its 50-day moving average and stayed there until just recently when it stabilized and built a base of support. Fitzpatrick noted that the buyers seem to be in control after a long hiatus and the stock could break out above its 200-day moving average.
Fitzpatrick also looked at the charts of both
Alpha Natural Resources
, two big coal names, for confirmation. He found that both Peabody and Alpha followed similar patterns, falling below their 50-day averages, only to stabilize then begin to rally on strong volume. What was once the ceiling for these stocks, their 50-day averages, is now their floor of support.
Crame said that with natural gas prices rising, export coal to China likely to improve and nuclear power off the menu post-Japan, there's a lot to like about coal, especially if Mitt Romney, a pro-coal candidate, is elected. However, he noted that if Obama is re-elected, that could give the Environmental Protection Agency a new mandate to phase out coal-fired power plants even sooner.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer opined on the management shakeups at
, an Action Alerts PLUS holding. He said while the news that two underperforming execs are on the way out is good news for the company, the market's reaction will be to sell shares of Apple even lower.
Cramer said the markets are in a full-blown "sell Apple" mode, as these changes remind investors that this is no longer Steve Job's company and the company has yet to debut more than incremental upgrades to existing products.
Cramer said he remains an investor in Apple for the long term, but noted that what the company really needs is a blowout product that no one is expecting in order to excite Wall Street.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC
-- Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, NWSA, SBUX and WFC.
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.