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Food for Thought
For a safe, smart way to invest in China, Jim Cramer recommended
Tuesday on his "Mad Money" TV show.
Yum!, which owns Taco Bell, Pizza Hut and Kentucky Fried Chicken, may have saturated the U.S. market, said Cramer, but it has far from saturated the market in China.
The company has 2280 stores in China, said Cramer, and he expects China to generate 35% of Yum!'s growth through 2007.
Additionally, in 2004, 15% of Yum!'s operating profit came from China, said Cramer.
By 2007, Cramer expects that number to be 25%.
In response to a question about
as a play on China, Cramer said the company doesn't yet have the critical mass necessary to see a lot of benefit from China.
However, he expects Starbucks to be a China play in the future.
Commenting on restaurant stocks in the U.S., Cramer reiterated his bullishness on
McCormick & Schmick's Seafood Restaurant
( MSSR) and
Ruth's Chris Steak House
For the first time in 19 years, the real estate prices in Japan are rising, said Cramer. The situation is reminiscent of the U.S., which came out of a real estate depression in 1991. At that time, Cramer made a lot of money investing in
The Citibank of Japan is
Mitsubishi UFJ Financial Group
, said Cramer.
Although MTU's stock looks expensive and appears to have already bottomed, that "doesn't mean you missed most of the move," said Cramer.
If Japan's real estate market continues to recover, more and more people will be taking out real estate loans, he said.
MTU's earnings should continue to grow, and the stock won't look so expensive, he said. "If my restrictions would let me, I'd be buying some MTU."
In response to a question about Korea, Cramer said the
is "absolutely right" here. He would endorse KF as a trade and MTU as an investment.
With the recent slide in oil stocks, investors seem to have forgotten that "so much of oil is about Chinese demand," said Cramer, "and that isn't slacking at all."
Cramer pointed to the recent acquisition attempt by Chinese oil company
in which CNOOC was willing to pay up to $9.25 a barrel for proven reserves, said Cramer.
Cramer believes CNOOC is still looking to make an acquisition, and "I'm betting that's going to happen," he said.
The three oil stocks that "might be most attractive on a valuation basis," said Cramer, are
Petrobras Energia Participaciones
Based on recent stock prices, Suncor's reserves are valued at about $5.50 a barrel, said Cramer. Petrobras' reserves are valued at about $7.10 a barrel.
Occidental, while not as cheap on a reserve basis, owns a "gigantic chemical business," said Cramer, who believes that Occidental is the "most likely target for another CNOOC takeover attempt."
Occidental's stock is "too cheap in the $70s," he said. OXY ended the regular trading session Tuesday at $78.88.
Donny Deutsch, advertising executive and host of
"The Big Idea with Donny Deutsch," joined Cramer as a guest on the show to talk about advertising.
Duetsch said smart advertising holding companies such as
will be good long-term investments, but they "need to get their act together."
Cramer was bullish on
Automatic Data Processing
Sirius Satellite Radio
Capital One Financial
Medco Health Solutions
Principal Financial Group
Cramer was bearish on
Williams Scotsman International
At the time of publication, Cramer was long EnCana, Altria, Occidental Petroleum, Cendant and Lucent.
James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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