Cramer's 'Mad Money' Recap: Jan. 13

Cramer says investors shouldn't have been surprised by the bad numbers from some companies.
Author:
Publish date:

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

"These are times that try a bull's soul," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday.

He said he's baffled that all of last week's most loved stocks have become the most hated this week. "Why are people so astonished by the bad numbers," he asked?

Cramer said the only surprise in the markets is that people are actually surprised. At the end of 2008, he said, there was simply too much excitement in the markets, and the analysts were too positive. This week's moves however, simply brings things back to reality and back to a level where the markets make sense.

Cramer said

KLA Tencor

's

(KLAC) - Get Report

earnings shortfall should have been expected. The departure of

Seagate

's

(STX) - Get Report

top executives should have been expected, and

Transocean

's

(RIG) - Get Report

order cancellations shouldn't have come as any surprise, he said.

Cramer said people should not have been surprised when

Alcoa

TICKER TYPE="EQUITY" SYMBOL="AA" PRIMARY="NO"/> missed its numbers because it's the worst run company out there.

Cramer told investors they need to "wake up" and start expecting the worst.

This market is creating opportunities, however. He said

Caterpillar

(CAT) - Get Report

, he said, is a steal under $40.

He said also to consider

NYSE Euronext

(NYX)

, which now yields 4.9%, while new Cramer favorite

Home Depot

(HD) - Get Report

yields 4%.

"These are not damaged companies," said Cramer, "just damaged stocks."

Cramer: Ignore Oil and Tech

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 10457642; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

An Oil Gusher

Cramer continued "Chart Week" on Mad Money, with a look at the technicals versus the fundamentals.

Tonight's stock was

ConocoPhillips

(COP) - Get Report

, a stock which he owns for his charitable trust,

Action Alerts PLUS.

Image placeholder title

Cramer said Conoco had a huge selloff in October, retreating from $65 a share to $45. This "climax" selloff is what the chartists look for, when everyone who wants out of a stock, gets out. Since then, the stock has been trading sideways, building a bottom and generating confidence that the stock won't go any lower. Thus Conoco, according to the technical analysts, is now a buy.

But Cramer said he's a believer in the fundamentals. Conoco is the third largest integrated oil company in the U.S., he said, and is now trading at the steepest discount ever to its peers, at 30%. The company also has a good history of buybacks and raising its dividend, he said.

Conoco's oil production should increase in 2009, said Cramer, and with oil prices low, the company's refining business should also enjoy better margins. The company trades at only 7.1 times its earnings, while historically it should fetch a multiple of 9.2 times.

Cramer's conclusion: the charts say "buy", but the fundamentals say "buy after Friday," when the company offers up its mid-quarter update.

Easy Choice

When it comes to cellphone makers, who's the cheapest? Cramer took a close look at

Motorola

(MOT)

,

Nokia

(NOK) - Get Report

and

Research In Motion

(RIMM)

to find out.

Image placeholder title

Cramer said all three stocks are down hard from their highs, with Motorola down 70%, Nokia down 60% and RIMM down 50%. And while Motorola may be the cheapest stock to buy at $4 a share, it's the price earnings ratio that investors need to look for.

Research In Motion trades at just 12 times earnings, with a growth rate of 25%, while Nokia trades at 15 times earnings for only a 20% growth rate. Motorola on the other hand, trades at a staggering 72 times earnings, for a growth rate that may not even pan out in 2009.

Cramer said the choice is easy: Buy Research In Motion, hold Nokia, and sell Motorola.

He said its clear that if President-elect Barack Obama won't give up his Blackberry, there must be something to the company's products. The company has a broad product line that's taking share, he said.

Nokia, however, lowered guidance and is betting on a strategy that consumers will trade down to less expensive phones. This strategy has failed to work, as the company has been losing marketshare, with less than 6% unit growth expected in 2009.

Outrage of the Day

Cramer sounded off against the so-called "ultra" short ETFs, which he says are fooling the public daily.

Citing a recent article at

TheStreet.com

, Cramer said it's been revealed that these ETFs, which supposedly allow investors to short stocks with two and three times the firepower, simply don't work. "They generate losses even on the worst stocks in the market," he said.

Cramer said he feels shocked and betrayed by the government for allowing these funds to exist. He said the SEC needs to protect investors against misleading products, saying they need to simply be banned. "These funds must be stopped," he emphasized.

Lightning Round

Cramer was bullish on

Ashland

(ASH) - Get Report

,

Bristol-Myers Squibb

(BMY) - Get Report

,

Kroger

(KR) - Get Report

,

Dryships

(DRYS) - Get Report

and

Frontline

(FRO) - Get Report

.

Cramer was bearish on

Corn Products International

(CPO)

.

Check out the latest edition of

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

Image placeholder title

Want more Cramer? Check out Jim's rules and commandments for investing by

clicking here

.

Read more of Cramer's Mad Money Lightning Round insights

.

For "Mad Money" performance statistics and other links, check out Mad Money stats

At the time of publication, Cramer was long ConcoPhillips.

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.