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The Wonders of Software

It was a special "all-automation show," Jim Cramer told "Mad Money" viewers Wednesday, meaning that he had a play on industries that have used no automation to date and are "truly being taken over by the wonders of software."

Automation saves companies money, so demand for the products can make you serious cash, he said.

That means taking a look at banking and health care, "which have been in backwaters when it comes to technology." Automation in these industries could make people some mad money.

He said that the best pure play for online banking is

Online Resources

( ORCC), which makes software for online banking and bill payment.

He said that Online Resources is different from other companies because it focuses on small and midsize banks.

This is the "sweet spot," Cramer said, because small banks are the ones that most need to contain costs and offer customers more value added.

These banks will have to spend more on online banking just to compete with big banks, said Cramer.

The company has incurred huge expenses to install its software, now it is just waiting for its customers to start adopting it, Cramer said.

So, if you buy the stock soon, you could get it just after the company has spent money on the installation and before it starts making money as customers use the software.

A caller reminded Cramer that automation is also a good play when the economy weakens because companies get rid of employees to save money.

Cramer also said that he likes

Digital Insight

( DGIN).

Image placeholder title

In more automation plays, he said to look at


(CERN) - Get Report

for health care automation. "It fits my automation thesis perfectly," he said.

Cramer said that the health care industry needs to automate, and by doing so it could save $162 billion a year by implementing modern software products in clinics, hospitals and doctors' offices.

That's where Cerner comes into play, he said, because it makes systems that manage patient information.

The stock has gone up nearly 400% since 2003, but for "excellent reasons" that should keep pushing the shares higher, he said.

For starters, he pointed out that Cerner has posted sequential revenue growth in the last 10 quarters and that its cash flow has grown since 2002.

Plus, he said that its technology is the best in the business and that Cerner has spent more than $1 billion in research and development over the last year.

Sales bookings were strong in the last quarter, and because the company has consistently bumped up its earnings guidance, Cramer believes it could happen again.

Am I Diversified?

In "Am I Diversified," callers find out if their portfolios are diversified among enough sectors to help protect them from risk.

He blessed the first caller's portfolio as diversified. It included

General Electric

(GE) - Get Report



(S) - Get Report


Urban Outfitters

(URBN) - Get Report



(PNR) - Get Report



( ILSE).

But he told the next caller that he would need to "take radical action" on a portfolio that included




( LU),

Time Warner


, GE and




Cramer said to sell Lucent and that Time Warner is an underperforming stock. Plus, Avaya and Lucent are both telecom plays. He suggested bringing in a health care company, even though the sector is down and out.

Finally, Cramer said that a caller who owned

Bank of America

(BAC) - Get Report



( GENZ),

Exxon Mobil

(XOM) - Get Report


Duke Energy

(DUK) - Get Report


Canadian National Railway

(CNI) - Get Report

had "one smacking-good portfolio."

In the "Mad Money" mailbag, a viewer wanted to know how Cramer would play


(NUVA) - Get Report

ahead of its earnings announcement.

Cramer said that buying a huge position ahead of a quarter "is too much of a dice roll."

Cramer said he would put on half of his position now and then wait for the announcement. If the quarter is a blowout then you'll have posted a good gain, he said. If the stock falls, then you can choose to pick up more shares at a cheaper price.

Cramer had said he would recommend



up to $18 because he sees it going to $20. But a viewer said that he bought it at $17 and has already lost 5%, and wanted to know if he should cut his losses.

Cramer said that the company has solid fundamentals and that he believes it will go higher, giving the viewer a chance to post a gain.

Lightning Round


Cramer was bullish on





(AAPL) - Get Report


Crown Holdings

(CCK) - Get Report





Biogen Idec

(BIIB) - Get Report


Tom Online

( TOMO),

Procter & Gamble

(PG) - Get Report


Crystallex International

( KRY),

Illinois Tool Works

(ITW) - Get Report


Arena Pharmaceuticals

(ARNA) - Get Report


Darden Restaurants

(DRI) - Get Report


Yum Brands

(YUM) - Get Report



Cramer was bearish on

China Medical Technologies

( CMED),


(AUDC) - Get Report


Intuitive Surgical

(ISRG) - Get Report



(KMB) - Get Report



(ORCL) - Get Report



(FAST) - Get Report


Applebee's International



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

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by

clicking here


At the time of publication, Cramer was long Procter & Gamble.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on Mad Money are his own and do not reflect the opinions of 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, 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 is related to the specific opinions expressed by him on "Mad Money."

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