Skip to main content

Cramer's 'Mad Money' Recap: Biggest Election Winner (Final)

Cramer says investors will come out ahead because Republican control of the House means stocks will go higher.
  • Author:
  • Publish date:

Search Jim Cramer's Mad Money trading recommendations using our exclusive Mad Money Stock Screener and watch Jim Cramer's Mad Money Post Game video exclusively on TheStreet.com.

NEW YORK (

TheStreet

) -- "The most important winner in yesterday's election was the American shareholder," Jim Cramer proclaimed to the viewers of his

"Mad Money"

TV show Wednesday, as he recapped what the election results mean for individual investors.

Cramer said the markets received not one, but two multiple enhancing events this week. First, the Republicans taking control of the House, and second, the

Federal Reserve's

announcement that it's buying up to $600 billion in securities in order to make the dollar more competitive overseas.

Cramer explained that in 2006, the average multiple on a stock in the

S&P 500

was 18.6, but since the Democrats took over both houses of Congress, that multiple has slipped to just 15.1. This means that the Democrats have been causing stocks to trade at a discount, and that also means that the discount is likely to reverse going forward, he said.

Cramer singled out House Speaker Nancy Pelosi as the stock market's worst enemy. He said with Pelosi, and her anti-business policies like card check unions and cap and trade, on the way out, stock multiples should expand by a full point.

For a stock like

Apple

(AAPL)

, a stock which Cramer owns for his charitable trust,

Action Alerts PLUS, an increase of one point in the stock's multiple would translate to a $22 pop. Cramer said this exercise can be repeated with just about every stock.

But Cramer said an even bigger winner in last night's election is the coal industry, which made solid investments in the campaigns of many successful candidates.

Cramer said the coal lobby's new "friends" in Congress could help it reel in the EPA and make more profits for shareholders. Cramer recommended

Peabody Energy

(BTU)

as his favorite in that group. He said the stock of Peabody could see $75 a share with the Republicans, at least partially, back in charge.

Healthier Soda

In the "Know Your IPO" segment, Cramer sat down with Daniel Birnbaum, CEO of

SodaStream International

(SODA)

, manufacturer of a home beverage carbonation system, which began trading today.

Birnbaum demonstrated his company's system by making Cramer a carbonated soda beverage in just seconds. SodaStream makes the beverage machine, CO2 refills and also flavorings for over 100 types of soda. SodaStream is already popular in Europe, with 20% home penetration in Sweden among other countries.

Birnbaum said there are many benefits to the SodaStream system. First, it's convenient. Consumers no longer need to lug bottles or cans home from the store. It's also healthier, he said, as none of the company's favorings use high fructose corn syrup, and diet products all use Splenda sweeteners.

SodaStream is also economical, costing up to 70% less than store bough beverages, said Birnbaum. Finally, he said that SodaStream is eco-friendly, eliminating the need for bottles and cans, and replacing them with a single reusable pitcher.

Continuing on the eco theme, Birnbaum explained that CO2 canisters, which make up to the equivalent of 180 cans of soda, can be exchanged at retailers who carry the device, or exchanged online, making the product even better for the environment. SodaStream machines retail between $99 and $149.

Cramer called SodaStream an exciting story, and one he will continue to follow closely, but fell short of offering a recommendation.

Quality Assets

In the "Executive Decision" segment, Cramer spoke with Mark Ellis, president and CEO of

Linn Energy

(LINE)

, an oil and gas driller with a 7.7% dividend yield that's up a stunning 105% since Cramer first recommended it on May 20, 2009.

Ellis said Linn Energy has been benefiting from both higher oil prices and the company's impressive 25% organic growth. He said the company also has lots of "dry powder" to purchase new assets. Linn Energy is "well poised to continue to build its cash flow for shareholders," said Ellis.

When asked how Linn is able to deliver such great results while others struggle, Ellis said that not every company has the quality of assets that Linn does. He said the company derives 20% of its revenues from the Permian Basin region of the country, and is applying new technology to older oil and gas fields with great success.

Ellis was also bullish on the president's mention of natural gas in a speech earlier today. He said the whole industry will benefit if Washington gets behind natural gas. "There's clearly more supply than demand," Ellis said, and Washington can jump start the demand side of the equation.

Cramer said Linn is a great company that's consistently delivered results for shareholders. He gave the company his highest "buy, buy, buy."

Am I Diversified?

Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included

National Oilwell Varco

(NOV)

,

Kinder Morgan Energy Partners

(KMP)

,

AT&T

(T)

,

Dominion Resources

(DRU)

and

HSBC Holdings

(HCS)

.

Cramer said he would bless this portfolio and was proud at the good work this caller did.

The second caller's top holdings included

Ford

(F)

,

General Mills

(GIS)

,

Genworth Financial

(GNW)

,

Schlumberger

(SLB)

and

Cisco

(CSCO)

.

Cramer said this portfolio was also perfectly diversified.

Lightning Round

Cramer was bullish on

DuPont

(DD)

,

Potash

(POT)

,

MEMC Electronics

(WFR)

,

RF Micro Devices

(RFMD)

,

Google

(GOOG)

and

Weatherford International

(WFT)

.

He was bearish on

Nokia

(NOK)

,

Radware

(RDWR)

,

Omnicom Group

(OMC)

and

First Horizon National

(FHN)

.

Closing Comments

Cramer said that the pending IPO of General Motors will be a bullish event for

Ford

(F)

. He said that with Ford firing on all cylinders and gaining share both here and abroad, it's clearly the better company.

With all the hype surrounding GM's IPO, Cramer said the event will have to lift both company's stock valuations. "Keep believing in Ford," Cramer concluded.

--Written by Scott Rutt in Washington, D.C.

To contact the writer of this article, click here:

Scott Rutt

.

To follow the writer on Twitter, go to

http://twitter.com/scottrutt

.

To submit a news tip, send an email to:

tips@thestreet.com

.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC

.

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

clicking here

.

For more of Cramer's insights during the Lightning Round, clickhere

.

At the time of publication, Cramer was long Apple.

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.