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NEW YORK (
) -- "The only way to make sense of this market is by looking from the bottom up," Jim Cramer told the viewers of his "Mad Money" TV show Monday.
He refuted an article by noted
New York Times
columnist Paul Krugman, who argued that the economy is slowly getting worse.
According to Krugman and others skeptical of the market's recent rally, the economy is simply being propped up by government spending and will return to March lows as that spending wanes. But Cramer asked his viewers pointedly: "Are things slowly getting worse for you?"
Cramer said the market's recent move makes sense from an academic "top-down" approach that looks at macro trends and data to evaluate the market. But the only way to really know what's going on, he said, is to do the homework on individual companies and listen to their executives.
Cramer said things are indeed getting better, and not because of the stimulus, most of which hasn't even hit yet. He said retailers are reporting leaner inventories because there was an actual upside surprise in demand. He said the government isn't buying
iPods with the stimulus, yet Apple had a great quarter.
Cramer went on to say that
isn't at $7 share because of "Cash for Clunkers." Rather, he said it's because of hard work and a long turnaround. He said that the financials have rallied more than 50% from their lows because things are looking up for that group as well.
Cramer said if investors add up all of the comments from the individual companies, the evidence in undeniable. He said the consumer isn't strapped, just frugal. But you'll never know that if you're looking at the markets from the top instead of from the bottom.
As the IPO markets begin to thaw after a yearlong hiatus, Cramer predicts that a slew of new companies will be going public in the coming months. The key, he said, is determining which ones are coming public at the right time and the right price.
Cramer said medical billing provider
, which is set to begin trading on Wednesday under the ticker "EM," is one such company. He said Emdeon not only is the country's largest electronic medical billing system but is also a profitable company that's coming public at the right time.
According to Cramer, with Washington abuzz with talk of health care reform and cost containment, there simply couldn't be a better time for Emdeon to hit the market.
He called the company "the real deal" and said it makes money at several points in the medical billing process and still has plenty of room to grow its business. Emdeon saves health care providers and insurance companies money, he said, and that's exactly what the market wants to hear.
Emdeon is also being priced conservatively, said Cramer, between $13.50 and $15.50 a share, making it an exceptional value. Cramer encouraged investors to get in on the IPO, but he cautioned them about chasing the stock in the open market after the IPO. He said that investors need to try to make the "easy money" by getting in on the IPO itself and avoiding the "harder money" in the days that follow.
Ready to Move Higher
When it comes to fast food, Cramer said there's no question that
is the clear winner. But, he said, there's another fast food chain whose time has finally come, and that chain is
Cramer said the turn in Wendy's is for real, and like rival
, which he recommended on May 22 for a 20% gain, the stock is ready to move.
Cramer said he liked Wendy's based on its valuation, which values the enterprise at only $1.3 billion after backing out its real estate holdings of $1 billion. He said the real estate and the company are worth more than the market realizes.
The company recently reported a fairly good quarter, said Cramer, giving it much-needed credibility on Wall Street. Wendy's is following through with solid execution and cost-cutting initiatives, giving it a same-store-sales boost and increased margins.
The company is also revamping its breakfast menu and expanding its operations overseas, both of which will translate into higher profits, he said.
"Wendy's can go much higher," said Cramer, who also liked the company's dual branding initiatives for its Arby's and flagship Wendy's locations.
Cramer told a viewer that he'd ring the register on
since no one knows what the common stock is worth given the government's huge injection of cash.
Cramer told another viewer that there are a lot of great drug companies out there, but he questions whether
will be one of them going forward.
Cramer was bullish on
He was bearish on
United States Steel
Gran Tierra Energy
Thompson Creek Metal
Written by Scott Rutt in Washington
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At the time of publication, Cramer was not long on any stock.
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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