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When does a loser stock make you mad money? When it's

US Steel

(X) - Get Report

, Jim Cramer told on his "Mad Money" TV show Friday.

Even though he's not a fan of the steel sector, US Steel is an incredible takeover target, Cramer said.

That's because there are three companies getting ready to bid for

Dofasco

, a Canadian steel company that is the same size as US Steel and in the same business as US Steel, he said.

The two companies that don't get Dofasco will be looking for someone else, and US Steel is dirt cheap, according to Cramer. And he thinks that makes US Steel the next logical choice.

CSFB upgraded US Steel partly on the basis of takeover speculation, and that even if consolidation doesn't happen speculation could drive the stock higher, Cramer said.

However, he warned, it's not worth owning if it's not a potential takeover target.

A caller asked whether carbon fibers are a good investment or a speculative play. Cramer said to be very careful about choosing a carbon fiber stock, but recommended looking into

Cabot

(CBT) - Get Report

.

ISE Offers Investment Option

Stock platforms have been on fire, Cramer said, and now it is time for

International Securities Exchange

( ISE) to play catch-up.

Its stock will move because it's an options exchange, he said, pointing out that the options market has grown at a 17% compound annual growth rate, a lot faster than the equity market.

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Plus, he said, there's still pricing power in the options market.

There is no reason to expect ISE's excellent growth picture to change since it has a top reputation among traders for superb execution, he said.

And to sweeten the deal, Cramer said it traded at 30 times earnings, in line with its peers, but is growing faster and taking more market share than the competition.

The Seven Samurai

Cramer presented the final member of his "Seven Samurai" top picks in Japan,

Matsushita Electric Industrial

(MC) - Get Report

.

Japan is turning around. Big-screen plasma TVs are hot and Matsushita is making itself into a flat-screen powerhouse, he said. In fact, Cramer said he'd rather own Matsushita at $22 than

Corning

(GLW) - Get Report

at $24.80.

He said that Matsushita intends to control 40% of the plasma market by 2010, and that means 10 million units.

The company is well-positioned to be the No. 1 player because it's upping its production capability faster than the competition, he said, pointing out that it's opening plants sooner than expected and plans to spend $1.57 billion on a plasma TV plant in western Japan.

That would give Matsushita the biggest plasma TV production capacity in the world, Cramer said.

He told a caller that even though

Sony

(SNE) - Get Report

is boosting its plasma TV business, the stock is only going higher because the Japanese economy is turning around.

Cramer was asked which of his Seven Samurai plays he would choose if he could only have one.

He said that the finance play

Mitsubishi UFJ

(MTU)

would be his pick of the group, which also includes

Kirin

(KNBWY)

,

Kubota

(KUB)

,

Kyocera

(KYO)

,

Honda

(HMC) - Get Report

and

Toyota

(TM) - Get Report

.

Mad Mail

Reaching into the "Mad Money" mailbag, Cramer answered a viewer who asked why

JDSU

(JDSU)

is trading higher than

CMGI

( CMGI).

Cramer said it's because CMGI hasn't turned around, while JDSU has improved dramatically and diversified.

He agreed with a viewer who noted that

Occidental Petroleum

(OXY) - Get Report

is very cheap, adding that he owns it for his

Action Alerts PLUS charitable trust.

But he said to stay away from

Guangshen Railway

(GSH) - Get Report

because he would stay away from the Chinese equity market altogether.

He commended a viewer for pointing out home health care company

Matria Healthcare's

(MATR) - Get Report

potential upside given the fact that chronic illnesses such as diabetes are on the rise.

And finally, he said that there's still money to be made in

Under Armour

( UARM).

Lightning Round

Cramer was bullish on

Peabody Energy

(BTU) - Get Report

,

Google

(GOOG) - Get Report

,

T. Rowe Price

(TROW) - Get Report

,

Continental

(CAL) - Get Report

,

GOL Linhas

(GOL) - Get Report

,

Dynegy

(DYN)

,

Chesapeake Energy

(CHK) - Get Report

,

Cooper Cameron

(CAM)

,

TradeStation

( TRAD),

Reynolds & Reynolds

( REY),

Johnson Controls

(JCI) - Get Report

,

Polaris

(PII) - Get Report

,

Hewlett-Packard

(HPQ) - Get Report

,

Todco

( THE),

GlobalSantaFe

(GSF)

,

Transocean

(RIG) - Get Report

,

ENGlobal

(ENG) - Get Report

and

Aqua America

(WTR) - Get Report

.

Cramer was bearish on

SulphCo

( SUF),

Sonic

(SONC)

,

JetBlue Airways

(JBLU) - Get Report

,

Dell

(DELL) - Get Report

,

Steelcase

(SCS) - Get Report

,

ASV

( ASVI),

Quiksilver

(ZQK)

,

Engelhard

(EC) - Get Report

and

Suntech Power

(STP)

.

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 Aqua America and Occidental Petroleum.

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."

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