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People should consider getting into
, as it has bottomed, Jim Cramer told viewers on his "Mad Money" TV show Friday.
Securities and Exchange Commission
passed Regulation FD, figuring out a company's earnings was as simple as making a phone call to the company's CFO, he said.
But now hedge funds use a new approach to decipher whether they can anticipate better-than-expected numbers.
Not only does Cramer recommend that investors listen to the company's conference call, but he also believes that people should find out all the facts.
For example, Lowe's conference call was "scary," he said. And looking at the company from the bottom up,
, one of Lowe's suppliers, said it had too much inventory.
This did not look good for Lowe's, Cramer said. But then on Thursday,
Black & Decker
reported slim inventories -- the opposite of what Stanley Works said.
, two other suppliers, also said business has been slowing, Cramer went on to say.
came out and said the remodeling market is stable. This is the most current news, and as Lowe's serves the remake and remodel market, Cramer believes that Lowe's is going higher from here.
Moreover, there is strength in casual dining, which is a great number to help decipher consumer confidence, Cramer said.
"This tells me Lowe's has bottomed, and you can start building a position right now before it reports Nov. 20," he said.
"When you get a stock really right, you have to take some profits," but if it works, you should stick with it, Cramer told viewers.
An example of a stock that has gone up, and will continue to do so, is
Palomar Medical Technologies
, he said.
"People will always pay up for their vanity," Cramer said. "Our desire to look young, healthy and sexy is what powers capitalism."
After an excellent earnings report, Palomar is up big, he said, so if market players got into it under $40, they should take some off the table. However, "the best is yet to come," for this stock.
"The shorts don't understand how many faces Palomar has," Cramer said.
Recently, the company teamed up with
Johnson & Johnson
, which he owns for his charitable trust,
Action Alerts PLUS, and
to produce home-use lasers.
Although the shorts are betting the
Food and Drug Administration
won't approve the deal with Gillette, Cramer believes that the FDA will. Even if it doesn't, the deal shouldn't affect Palomar too much, he said.
In addition to having the best products, Palomar also has the best patents. But the stock trades at just 30 times forward earnings, Cramer said.
"It is an old-fashioned secular growth story," he said. "Palomar is up, but it can still make people some mad money."
The Week Ahead
If people own
, it's time to take it off the table, Cramer said.
Next week, trading is going to be affected by the election, he said. Therefore, next week the game plan is to make money off of the speculations of which party will win the race.
The Street is afraid that if the Democrats win, they will bargain for lower drug prices, which will kill big pharma, Cramer said.
Therefore, he suggests that people sell
And as the Democrats also want the U.S. out of Iraq, people should sell
PowerShares Aerospace & Defense
. In addition, big oil stocks and
Energy Select Sector SPDR
are also sells this Monday.
"I don't believe in taking unnecessary risk," Cramer said. "If you own a big drug stock, big defense contractor or big oil stock, you should sell them this Monday and buy them back next Monday, as they will be beaten down by then."
Swap out of these sectors Monday to Monday to avoid any pain, he said. And if people believe they'll see a Democratic sweep, then they shouldn't buy these stocks back.
Market players should look at getting into alternative-energy stocks this Monday, particularly
, and selling them next Monday, Cramer said.
He also advised buying homeland-security plays, such as
could also work as election-expectation trades, Cramer said.
In the "Mad Mail" segment of the show, Cramer apologized to a viewer for calling
bearish before it went up four points.
Cramer said he got PF Chang's wrong because he was looking at its longer-term story, instead of its current facts.
is expanding its brand, Cramer told another viewer.
"The bears have been wrong and will stay wrong on this stock," he said.
Cramer was bullish on
Cramer was bearish on
For more of Cramer's insights during the most recent Lightning Round,
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At the time of publication, Cramer was long Johnson & Johnson.
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