Skip to main content

Click here for an archive of Cramer's "Mad Money" recaps.



is a broken stock, not a broken company, Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

Walgreen, which has long been one of Cramer's favorite pharmacy stocks and touched $42 on Monday, is being "condemned" by people for the wrong reasons. The stock closed at $45.11 on Tuesday.

Investors fear that


(WMT) - Get Walmart Inc. Report

is going to "undercut" Walgreen with lower prices.

What's really "killed" the stock is that people believe it has stopped growing, when in reality, it is "only seeing a slight decline" in this area, Cramer said.

The case against Walgreen is "full of holes," he said. And the people who crushed Walgreen and said it's not a good stock don't know what they're talking about. "The company is not broken at all," Cramer said.

Image placeholder title

If people give Walgreen the same type of multiple that


(KO) - Get Coca-Cola Company Report

gets, then Walgreen is a $72 stock, Cramer said. In addition, if you compare it with

TheStreet Recommends


(PEP) - Get PepsiCo, Inc. Report

, then Walgreen's going to $70, he said.

Moreover, the Wal-Mart problem is the first thing Walgreen addressed in its conference call. In reality, Walgreen's prices are as cheap -- if not cheaper -- than Wal-Mart's, Cramer said.

Walgreen is a "cheap stock" that "should have much higher margins soon," he said. "It is far from a broken company. It is a broken stock that will soon be healed."


Cramer said he's caught an "overlooked IPO" in



. And he believes that the stock, which has increased almost 17% after its IPO, still has a lot of potential to make people money.

DivX is a company that makes software for video compression and decompression and does 18% of its business with


(GOOG) - Get Alphabet Inc. Class C Report

, Cramer said.

"We love Google and anything connected to Google," he said. "Soon there is going to be a bandwidth shortage, and that's why we believe DivX is sexy."

But that's not the only reason Cramer likes the stock. Sure, DivX may have "hotness potential," but the real reason he likes it is because of its fundamentals.

"I regard the numbers here as a thing of beauty," Cramer said.

DivX has a great business model, with 80% of its business coming from licensing fees. In addition, for 2005, DivX's gross margins were 89%. Additionally, in three straight years, DivX has doubled its revenue, he said.

The company has accelerated revenue growth, Cramer said. People missed getting into this stock because "it's a small company that is off the radar screen," said Cramer, who believes that DivX could be the next

Akamai Technologies

(AKAM) - Get Akamai Technologies, Inc. Report


In fact, Cramer said DivX is "such a screaming buy" that it would be "criminal" not to recommend it.

Best Name in Pharma

Next Cramer ran his screens to see what seemed "out of whack." He looked for stocks with more than a $50 billion market cap, one year's earnings-per-share growth of at least 25% and at least 20% growth expected next year.

Although investors might expect more stocks to pop up with this search, only four names appeared in this category:

America Movil

(AMX) - Get America Movil SAB de CV Sponsored ADR Class L Report

, Google,


(AAPL) - Get Apple Inc. (AAPL) Report





The cheapest stock on this screen was Genentech, which Cramer said has the "most upside and potential here by far."

Genentech, a stock near its 52-week low, doesn't deserve to be "so down and out," Cramer said. In fact, Genentech is the "best name in pharma, with the possible exception of

Johnson & Johnson

(JNJ) - Get Johnson & Johnson (JNJ) Report




," both of which Cramer owns for his charitable trust,

Action Alerts PLUS.

Genentech is a good company that is down for some "not-so-important, short-term reasons," he said, adding that it "amazes" him that it's not near its 52-week high.

"First, Genentech should be able to hit its 25% growth for the next few years," Cramer said. "I have no problem believing it could have

a 31% long-term growth rate."

Genentech is cheap because of short-term catalysts, he said. First, people are waiting to see if the Food and Drug Administration will approve a Rituxan, Genentech's No. 1 drug, to be used to treat low-grade, non-Hodgkin's Lymphoma. Cramer believes that Genentech will get a nod for this.

Another decision that's going to take place next month is on Avastin. If this drug is approved by the FDA, it could be used for lung cancer and could "more than double sales" for Genentech, Cramer said. He believes that Genentech should get the nod here as well.

Another decision taking place next month deals with Genentech's Herceptin drug.

Cramer believes that "any possible bad news has already been priced into Genentech" as it is so low. The bottom line: "People should be buyers of Genentech."

Cramer welcomed


(LEN) - Get Lennar Corporation Class A Report

President and CEO Stuart Miller to his show and asked him his thoughts on why the stock is going up.

"We're talking about being primarily focused on our balance sheet, keeping our inventory levels low and recognizing that the market is a little or a lot soft right now," Miller said. "But we're preparing for what happens when the market turns around."

At this point in the cycle, typically a company's debt to total capital spikes horribly, Cramer said. He asked where Lennar's debt to total capital is.

At quarter end, it was 31.9%, down from 37% a year ago, Miller said.

"We're focused on keeping that inventory really light, and cash and liquidity really strong," he went on to say. "There is a difference between what people want to pay for homes and what homes are worth.

Miller said there has been an inventory buildup in the marketplace that he believes "is going to correct in due time, which is why we think liquidity is king."

To view Cramer's interview with Stuart Miller, please click here.

Lightning Round

Cramer was bullish on


(MO) - Get Altria Group Inc Report



(HAL) - Get Halliburton Company (HAL) Report


Lincoln National

(LNC) - Get Lincoln National Corporation (LNC) Report


T. Rowe Price

(TROW) - Get T. Rowe Price Group Report


Legg Mason

(LM) - Get Legg Mason, Inc. Report





Johnson & Johnson

(JNJ) - Get Johnson & Johnson (JNJ) Report



(HOG) - Get Harley-Davidson, Inc. (HOG) Report








General Dynamics

(GD) - Get General Dynamics Corporation (GD) Report


Limited Brands




(TJX) - Get TJX Companies Inc Report


Automatic Data Processing

(ADP) - Get Automatic Data Processing, Inc. Report



(PRU) - Get Prudential Financial, Inc. Report


Yamana Gold

(AUY) - Get Yamana Gold Inc. Report


Cramer was bearish on

Evergreen Solar



Walter Industries




(FCX) - Get Freeport-McMoRan, Inc. (FCX) Report


Tibco Software



Principal Financial

(PFG) - Get Principal Financial Group, Inc. Report


In his "Sudden Death" round, Cramer was bullish on

Foster Wheeler


, which he owns for his charitable trust,

Action Alerts PLUS, and

Piper Jaffray

(PJC) - Get Piper Jaffray Companies Report


He was bearish on

Maxwell Technologies

(MXWL) - Get Maxwell Technologies, Inc. Report


For more of Cramer's insights during the Lightning Round, click here


Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by

clicking here


At the time of publication, Cramer was long Halliburton, Schering-Plough, Foster Wheeler, Altria and Johnson & Johnson.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on Mad Money are his own and do not reflect the opinions of 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, 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 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, 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, 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. 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, 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.