Cramer's 'Mad Money' Recap: Exiting Overcrowded Sectors (Final)

Cramer says smart investors are moving into uncrowded sectors like food and drug stocks. <A HREF="http://www.thestreet.com/headlines-and-perspectives/jim-cramer/index.html?cm_ven_int=320X240TSCAD"target="blank">Click for news from Jim Cramer.</A>
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Jim Cramer told viewers of his "Mad Money" TV show Wednesday that an exodus has begun out of the commodity sectors that have been overcrowded with big institutional investors.

Cramer said it's typical on Wall Street for big money to move in tandem. So naturally as the world's central banks began printing money and offering up stimulus, hedge funds and mutual funds began flocking into hard assets such as mining, minerals, steel, oil and fertilizers.

The reverse is true when these sectors get too hot, or too crowded, said Cramer. And that's exactly what's happening now. With the European central banks hinting that stimulus might stop, oil struggling to top $72 a barrel, and today

Potash

(POT)

signaling weakness in fertilizer prices, the exodus out of commodity stocks has begun, said Cramer.

Where is the institutional money headed next? Cramer said it's back to the safety of the defensive names such as the food and beverage stocks and the drug stocks.

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He said stocks like Potash, along with

Agrium

(AGU)

and

Mosaic

(MOS) - Get Report

will see continued pressure, while stocks like

Pepsi

(PEP) - Get Report

, a stock which Cramer owns for his charitable trust,

Action Alerts PLUS, and

Wal-Mart

(WMT) - Get Report

will continue to rally.

Healthcare Lift-off

Cramer said clarity is driving the seemingly endless rally in the healthcare stocks.

Wall Street has been punishing the healthcare group since before Obama took office, he said, largely on the fears of what sweeping reforms in healthcare might mean for the companies. But now that we know what the plans are, and the curtains been lifted, investors can begin investing again.

Cramer recommend

WellPoint

(WLP)

as one healthcare stock that's benefiting from the clarity of what Obama's plans include. He said the stock is trading at just eight times next year's earnings, but noted that those multiple won't last for long.

Cramer said he likes the Wellpoint's sale of its pharmacy management business to

ExpressScripts

(ESRX)

and said the company is poised to crush earnings estimates going forward. He said the company could trade as high as 10 to 11 times earings, taking shares to the $60's.

But if Obama's plans turn out to be even better than expected, or if they don't happen at all, as was the case in the Clinton era, Cramer said Wellpoint and other HMOs could return to historic multiples of 13 to 14 times earnings.

If that happens, he said, Wellpoint could soar to $100 a share.

Outrage of the Day

Cramer sounded off against the

United States Natural Gas

(UNG) - Get Report

ETF, a new fund designed to track the price of natural gas.

According to Cramer, this new fund, which buys natural gas futures, is now large enough that its buying actually moves the price of the commodity itself.

Cramer once again pleaded to the Securities and Exchange Commission to ban these ETFs and return to their roots of leveling the playing field for average investors.

He said funds like the U.S. Natural Gas Fund only exemplifies how the SEC is making terrible mistakes and is allowing day traders and short sellers to run amok and manipulate prices.

"This is the tail wagging the dog," said Cramer, "and it needs to stop."

Mad Mail

Cramer told a viewer that when it comes to

McDonald's

(MCD) - Get Report

versus

Wendy's

(WEN) - Get Report

, he just cannot recommend Wendy's. It's too expensive, he said, and just has no momentum.

Cramer told a second viewer that the rally in smartphones will not extend to

Amdocs

(DOX) - Get Report

, a billing and software provider to many of the major carriers. He told the viewer that

Apple

(AAPL) - Get Report

is the best way to invest in this trend.

Am I Diversified?

Cramer played "Am I Diversified" with callers to see if their portfolios have what it takes. The first caller's portfolio included

Dominion Resources

(D) - Get Report

,

PennWest

(PWE)

,

Bank Of America

(BAC) - Get Report

,

CitiGroup

(C) - Get Report

and

Foot Locker

(FL) - Get Report

.

Cramer advised selling CitiGroup and adding a healthcare company.

The second caller's top holdings included

Lockheed Martin

(LMT) - Get Report

,

Duke Energy

(DUK) - Get Report

,

Microsoft

(MSFT) - Get Report

,

Coca-Cola

(KO) - Get Report

and

3M

(MMM) - Get Report

.

Cramer said this portfolio rocked.

The third caller had

Visa

(V) - Get Report

,

Terra Nitrogen

(TNH)

,

Energy Transfer Partners

(ETP)

,

Heinz

(HNZ)

and

AT&T

(T) - Get Report

as their top five stocks.

Cramer said this portfolio was also diversified.

Lightning Round

Cramer was bullish on

Frontline

(FRO) - Get Report

,

Nordic American Tanker

(NAT) - Get Report

,

Emerson Electric

(EMR) - Get Report

,

Huntington Bancshares

(HBAN) - Get Report

and

Home Depot

(HD) - Get Report

.

He was bearish on

Dryships

(DRYS) - Get Report

,

WESCO International

(WCC) - Get Report

,

Herbalife

(HLF) - Get Report

,

Zions Bancorp

(ZION) - Get Report

,

World Wrestling Entertainment

(WWE) - Get Report

,

Rosetta Stone

(RST) - Get Report

and

Lowes

(LOW) - Get Report

.

Check out the latest edition of

"Cramer's Take onTop-Searched Stocks" on Stockpickr.

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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, click here

.

At the time of publication, Cramer was long Pepsi, Home Depot, Visa.

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.