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is a "great stock" that is going to be put on sale next week, Jim Cramer told viewers of his "Mad Money" TV show Monday.
Cramer said he has "little doubt" that on Nov. 7, voters in California will pass Proposition 87, which "seeks to lessen dependence on foreign and domestic oil."
Chevron said this initiative might cost it $200 million, Cramer said. The measure would impose a tax on oil production. It seeks to raise $4 billion to develop and promote alternative energy technologies and promote the reduction of petroleum use.
After the "excellent" Chevron quarter and the company's "big find" in the Gulf of Mexico, it will be time to buy this stock on Wednesday or Thursday of next week when it gets hit by this initiative, Cramer said.
"Don't buy it today, tomorrow or later this week," Cramer warned.
If Proposition 87 passes, and it is expected to, analysts who cover Chevron are going to have to cut numbers, he explained. "When it gets put on sale, people should buy it."
Aside from improvements in Big Oil's prospects, another reason to buy Chevron is that it had the "biggest earnings upside surprise," almost a 15% beat, Cramer said.
Plus, the company has "stronger marketing," he said. "It's not burning money any more; now it's spending it."
Also, it's still cheaper than
and has a "hefty" 3% dividend, Cramer said. In addition to the yield, Chevron has a "sweet buyback," which shows the company is confident and has "very little debt," he said.
"The last and best reason to buy it is that Chevron has great long-term prospects," Cramer said. "It has taken us out of the House of Pain after its great quarter, and it's time to buy it Wednesday or Thursday of next week."
Tobacco's Tough Road
Hospitals in California, Missouri and Arizona are lobbying to increase cigarette taxes, but people should still consider getting into the tobacco sector, Jim Cramer told viewers of his "Mad Money" TV show Monday.
If Proposition 86 is passed in California, it would raise the state cigarette tax from 87 cents to $3.47 a pack, Cramer said. However, tobacco companies are "taking a stand and fighting a back" and spending millions on political advertising.
Although Cramer said he doesn't smoke nor condone it, calling it "gross and sad," he believes people can make mad money from these stocks.
, which Cramer owns for his charitable trust,
Action Alerts PLUS, is the best of breed, he said.
It is better than
and is better valued than
, Cramer said.
However, Reynolds, which "has been on a roll" the last few years, is Cramer's second pick, and UST is an underdog/potential takeover target that he believes might be worth buying as well.
If market players prefer smaller plays, Cramer recommends
Even with tobacco excise taxes, cigarette companies should be bought, Cramer said.
There has been "furious trading" in
Delta Air Lines
stock recently, Cramer told viewers of his show.
As it is "incredibly risky" to buy bankrupt stocks, and because he doesn't like the risk/reward in these situations, Cramer said he doesn't recommend buying Delta. Based on previous airline bankruptcies, it is possible the stock will become valueless and bond holders will get all the equity, he said.
But this could be a "great sign" for the rest of the stocks in the sector, Cramer said, as it's a "fabulous" way to tell where the buyers are.
"When bankrupt stocks trade at a high volume, it could be good news for nonbankrupt peers," he said.
Therefore, Cramer advised "taking a sign from Delta" and buying other companies in the sector that have sound financials.
It's not too late to get into
, he said.
Cramer believes these stocks should go up, as there is a shortage of investable airline stocks, and "for once, there are actual barriers to entry."
The Rite Aid Way
Cramer asked his guest,
President and CEO Mary Sammons, if it's a narrow way of thinking to believe
can wreck Rite Aid's pricing on drugs.
"If you look at Wal-Mart taking a small percentage of generics and using them as a loss leader, it doesn't impact a drugstore that has a whole different business proposition," Sammons responded. "In addition to the fact that 95% of drugs are paid by a third party, my customer would not pay much more than $4 at Rite Aid, and in many instances, they will pay less than $4."
"is a terrific acquisition ... couldn't find a better one for our company," Sammons added.
In addition to being able "take advantage of potential in the drugstore sector," the acquisition will enable Rite Aid to put its "branding proposition out there for a tremendous amount of more people," she said.
To view Cramer's interview with Mary Sammons, please click here.
Cramer was bullish on
MEMC Electronic Materials
Level 3 Communications
California Pizza Kitchen
Cramer was bearish on
In the "Sudden Death" round, Cramer was bullish on
He was bearish on
For more of Cramer's insights during the Lightning Round,
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At the time of publication, Cramer was long Altria and Marvell Technology.
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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