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NEW YORK (
) -- The dogs will remain dogs, but the thoroughbreds are still worth betting on. That was Jim Cramer's assessment of the
Dow Jones Industrial Average
going into 2013.
Cramer told his
viewers Thursday that 2013 should be a lot better than 2012 for the Dow, and he gave a quick assessment of all the Dow stocks to show why.
Starting from the best performers in 2012, Cramer said that
Bank Of America
(BAC) - Get Report
remains cheap, despite its 108% gain last year. Bigger gains will come, he said, as the housing recovery continues.
Home Depot
(HD) - Get Report
continues to take market share, which makes that stock a winner as well.
Cramer said that
Walt Disney
(DIS) - Get Report
can extend its 32% rally last year thanks to strong attendance at its parks and strong entertainment properties. And while he's not as bullish on
JPMorgan Chase
(JPM) - Get Report
,
American Express
(AXP) - Get Report
and
Travelers
(TRV) - Get Report
, Cramer expects all three to still have a good 2013.
Cramer was also bullish on
General Electric
(GE) - Get Report
, a stock he owns for his charitable trust,
Action Alerts PLUS, along with
Pfizer
(PFE) - Get Report
,
3M
(MMM) - Get Report
and
United Technologies
(UTX) - Get Report
, all stocks he said should be able to at least match last year's slow-growth performance.
His only bearish call in the slow-growth group, Wal-Mart, in the face of a weaker U.S. consumer going into 2013.
Cramer said
AT&T
(T) - Get Report
will allow investors to sleep at night, while
Cisco
(CSCO) - Get Report
should see its shares rise in 2013. Meanwhile,
Merck
(MRK) - Get Report
needs a big catalyst to match its 8.6% performance last year and Cramer doesn't see one.
He felt
Verizon
(VZ) - Get Report
will likely play catchup this year, while
United Healthcare
(UNH) - Get Report
will do poorly without job creation.
Then there were the dogs of the Dow, the under-performers. Cramer was bullish on
Johnson & Johnson
(JNJ) - Get Report
and
IBM
(IBM) - Get Report
, another Action Alerts PLUS name, and felt that
Coca-Cola
(KO) - Get Report
should be able to beat its 3.6% gain in 2012, as should
Boeing
(BA) - Get Report
given the aerospace cycle. His only worry is
Microsoft
(MSFT) - Get Report
, a stock he said is "hard to love."
Cramer was lukewarm on
Exxon Mobil
(XOM) - Get Report
and
Chevron
(CVX) - Get Report
, but gave Chevron, an Action Alerts PLUS name, the edge. He was bearish on
Alcoa
(AA) - Get Report
and
DuPont
(DD) - Get Report
and said he doesn't trust
McDonald's
(MCD) - Get Report
.
Cramer made an exception for
Caterpillar
(CAT) - Get Report
, calling that dog of the Dow undervalued, but rounded out the group by saying that
Intel
(INTC) - Get Report
will likely remain flat in 2013 and the worst performer,
Hewlett-Packard
(HPQ) - Get Report
could only save the averages by being booted from them, even with it's 44% loss for 2012.
Executive Decision
In the "Executive Decision" segment, Cramer spoke with Charif Souki, chairman and CEO of
Cheniere Energy
(LNG) - Get Report
, a company that plans to export U.S.-born natural gas to the rest of the world. Shares of Cheniere are up 147% since Cramer first spoke with Souki in June 2011, and 18% since his last visit in September.
Souki said it takes a lot of time and money to follow the rules and get approval to build an export terminal in the U.S., but that's what Cheniere has been able to do and why it will be the first to have an export terminal online in mid to late 2015, a full year ahead of schedule.
He said that while he expects others to follow in Cheniere's footsteps, his company's Louisiana facility will certainly be the first and will enjoy many years of successes.
Souki also expressed how urgent the need is to do something with our natural gas. He said gas is produced as a byproduct of producing more oil and, to date, the industry is simply "flaring," or burning off, more gas than it uses just to get rid of it. He said the practice is wasteful and bad for the environment, but it's being done more and more as our country struggles to do something with its energy policies.
Souki also confirmed that Cheniere is not in need of additional equity to complete its facility and thus won't be diluting shareholders with more equity offerings anytime soon. That news left Cramer speechless, as he said there are few companies he follows that have such an excellent story to tell.
A Deal That Sticks
In his second "Executive Decision" segment, Cramer spoke with Jeffrey Ettinger, chairman, president and CEO of
Hormel Foods
(HRL) - Get Report
, on the heels of the company's acquisition of Skippy peanut butter. Shares of Hormel are up 14% since Cramer recommended it in May 2012 and are flirting with their 52-week highs.
Ettinger said Hormel is emerging as a leader in the sandwich market and the company now has a strong presence three of the top four sandwich categories. He said Skippy will enhance Hormel's business model and he's confident in their projections for both growth and margins.
When asked how Hormel will be able to run Skippy better than giant
Unilever
(UL) - Get Report
, Ettinger said Hormel excels in niche areas and has proven it can hold its own against bigger competitors. Skippy also fits well into Hormel's international strategy, particularly in China.
Skippy also gives Hormel a bigger footprint into the healthy eating category, noted Ettinger, and fits into Hormel's plans to build a broad portfolio of brands that span multiple categories and channels. Ettinger said the Skippy deal was not a strain on his company's balance sheet and the company remains committed to its dividend and its long history of paying one.
Cramer called the Skippy deal "transformative" for Hormel.
Lightning Round
In the Lightning Round, Cramer was bullish on
Whiting Petroleum
(WLL) - Get Report
,
Becton Dickinson
(BDX) - Get Report
,
Hain Celestial
(HAIN) - Get Report
,
Whole Foods Markets
(WFM)
and
Sprint Nextel
(S) - Get Report
.
Cramer was bearish on
Medtronic
(MDT) - Get Report
,
The Geo Group
(GEO) - Get Report
,
Mako Surgical
(MAKO)
,
Amarin
(AMRN) - Get Report
and
Clearwire
(CLWR)
.
Am I Diversified?
In the "Am I Diversified?" segment, Cramer spoke with callers and responded to tweets sent via Twitter to
to see if investors' portfolios have what it takes for today's markets.
The first portfolio included:
Starbucks
(SBUX) - Get Report
,
(FB) - Get Report
,
Apple
(AAPL) - Get Report
,
McDonald's
(MCD) - Get Report
and
Pandora
(P)
.
Cramer said that he's not a fan of McDonald's or Pandora and would add an industrial and a health-care or drug stock to complete this portfolio.
The second portfolio's top holdings included:
3D Systems
(DDD) - Get Report
,
Chicos
(CHS) - Get Report
,
United Rentals
(URI) - Get Report
,
Neustar
(NSR)
and
Wells Fargo
(WFC) - Get Report
.
Cramer advised selling Neustar and adding a health-care stock in order to diversify this portfolio.
The third portfolio had:
KeyCorp
(KEY) - Get Report
,
Cheniere Energy
(LNG) - Get Report
,
Valero Energy
(VLO) - Get Report
,
Jarden
(JAH)
and
SPDR Gold Shares
(GLD) - Get Report
as its top five stocks.
Cramer said this portfolio has too much energy with Valero and Cheniere so he once again advised selling Valero in favor of a health-care stock.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer reminded viewers that while most retail stocks are cheap, only a few are worth buying.
Nordstrom
(JWN) - Get Report
remains outstanding, while both
Ross Stores
(ROST) - Get Report
and
Target
(TGT) - Get Report
delivered stronger than expected results.
Cramer said
Gap Stores
(GPS) - Get Report
remains a favorite after the company's brilliant acquisition, but the dollar stores, like
Family Dollar
(FDO)
, are getting squeezed hard.
"Don't bottom-fish," warned Cramer, as retail remains as dicey an investment as ever.
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.
-- 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, CAT, CVX, DD, GE, IBM, KEY, KO, SBUX, UTX 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."
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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.
