Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
NEW YORK (
) -- Are the politicians in Washington moving toward a deal to avoid the fiscal cliff? If so, that would be good for business and terrific for the stock market, Jim Cramer told
That may just be why the market was soaring again today -- the time to get into stocks will be before, not after, a deal is announced.
Cramer said the rhetoric in Washington seems to be softening lately, and today's rally foreshadows just what could happen if a deal is reached. Some of his most important indicators, such as the transports, are breaking out of their trading range, signaling the economy may be slowly coming back to life. Nothing tells you how well the economy is like planes, trains and trucks, noted Cramer.
Then there are the financials, another beaten-down sector that is coming back to life. Cramer said that he still thinks stocks including
, a stock he owns for his charitable trust,
Action Alerts PLUS, can go higher.
Cramer said what the markets need most is certainty, but the time to get into the markets is before that certainty arrives.
Off the Charts
In the "Off The Charts" segment, Cramer went head to head with colleague Bob Lang over the chart of
to see if the strong rally in that stock can continue.
Looking at a two-year weekly chart, Lang noted Goldman is still well off its 2011 highs and is completing a "W" bottom formation, which is a bullish sign. He said that if Goldman can stay stay above the current resistance level then its off to $140 a share and $170 a share after that.
Turning to a shorter-term daily chart, Lang also noted Goldman has been building a base since June but is now above all of its major moving averages. There has been strong volume on the up days and the MACD indicator is also showing a bullish crossover.
Cramer said the fundamentals agree with the technical analysis. He said Goldman trades at just 0.9 times book value, a historically low valuation for such a well-known investment bank. The company has also been buying back stock, reducing its share count by 10% in recent years. Given how the world's economies are on the mend, things are looking up at Goldman, Cramer concluded.
Problems With Catamaran
Bulls make money, bears make money but pigs get slaughtered, Cramer reminded viewers, as he followed up on SXC Health Solutions, a pharmacy benefit manager he recommended about a year ago. A lot has changed in the year since he made that recommendation, said Cramer, which is why we must revisit this stock.
Cramer said the first thing investors may notice is that SXC Health Solutions no longer exists. The company did a $4.4 billion merger in July and rebranded itself as
. Shares of Catamaran, however, are up 74% since last December.
Catamaran is still a great story, said Cramer. The new company has great scale to compete with the likes of
. There is also a wave of patented drug expirations underway, leaving a wave of generic competion for Catamaran to capitalize on.
But there is a problem, noted Cramer, and that's Catamaran's largest customer,
( HS), which accounts for 10% of the company's earnings. HealthSpring has a contract with Catamaran through 2014, but the status of that contract will be known in January. Since HealthSpring was itself acquired, it may not be renewing its contract.
Cramer said Catamaran can eventually replace these lost earnings with new business, but that won't stop anaylsts from sounding the alarm in the coming weeks -- which is why investors need to sell ahead of that pending news. "Don't give up your gains," Cramer concluded.
In the Lightning Round, Cramer was bullish on
Cramer was bearish on
United States Steel
Cliffs Natural Resources
SandRidge Permian Trust
Digging Into Mine Safety
There's always money to be made speculating on takeovers, Cramer told viewers, but only if it's done wisely. That means never speculating on a company with declining fundamentals.
Fortunately, in the case of
Mine Safety Appliances
, makers of safety equipment for miners, oil and gas workers, firemen and those in the construction industry, business is booming.
Cramer said Mine Safety is a classic case of a stock that's unknown and under-covered by Wall Street. He said the company delivered a miss when it last reported, but that was only due to weakness in Europe, which accounts for 24% of the company's sales. As Europe continues to stabilize, Europe will become less of a factor, he said.
So who would be a buyer of Mine Safety? Cramer said both Honeywell and
have long histories of making profitable acquisitions in this space, and either could be an acquirer. Mine Safety also sports a respectable 2.7% dividend yield.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer sounded off on the recent downgrade of
, an Action Alerts PLUS holding, from buy to neutral at
Cramer reminded viewers Citi anaylsts issued a buy rating on Apple on Nov 28 at $571 a share, only to reiterate that buy rating just days later. Since then, shares of Apple have slumped to $509 a share, where Citi, just 18 days after its initial recommendation, advised selling the stock. Since advising a sale, shares of Apple are now up to $534.
Cramer said Citi is acting more like traders than analysts and investors need to beware of "research" of this nature. He advised doing your own homework and not blindly following analysts who were clearly panicking that their trade went awry. If you like a stock at $571 a share, he quipped, you should like it a lot more at $509 since it's a lot cheaper.
To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC
-- Written by Scott Rutt in Washington, D.C.
To email Scott about this article, click here:
Follow Scott on Twitter
or get updates on Facebook,
At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, BMY, DD and WFC.
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.