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NEW YORK (
) -- "The averages are masking some big changes in the market," Jim Cramer told the viewers of his
TV show Thursday, as he said some of the market's former high fliers and once again ready to roll.
Cramer said much of the market's recent rally was made on the backs of the industrial stocks and fertilizer plays like
, a stock which he owns for his charitable trust,
Action Alerts PLUS, and
. It was also made by the technology stocks, thanks to strength in smartphones and cloud computing.
In recent days however, as many of these high fliers were taking a breather, Cramer said a minor chord in the market, one that was bullish on the safer consumer products names, took over. That of, of course, until today.
Cramer said worries over rising costs at
Procter & Gamble
have silenced that bull market, sending money flooding back into tech and the industrials.
Cramer said he still likes Caterpillar, which he feels could add another $25 a share, along with
and Potash. In the tech space, Cramer said
remains on fire, as does chipmaker
Also on Cramer's hot list,
, which saw its shares pummeled in recent days, and
Rising Commodity Costs
What can investors learn from Procter & Gamble's recent earnings? Plenty, said Cramer. He said while Procter technically delivered an earnings beat, the stock sold off hard as investors worried about the company's rising commodity costs.
Cramer said for consumer products companies, it's all about the gross margin, the amount of money the company makes on each sale. And with commodities from grain to metals to oil on the rise, companies like Procter can't raise prices fast enough to offset these rising costs.
According to Cramer, a diversified portfolio now needs to account for rising commodity prices. Cramer said while he likes companies like
, Procter and
, these companies will all be held hostage to margin pressures.
As an alternative, Cramer said investors need to consider companies that make commodities, and avoid companies that use them. Stocks like
, an Action Alerts PLUS name, and Potash, he said, are two great examples of the former.
Raw Materials Boom
In the "Executive Decision" segment, Cramer once again spoke with Dan DiMicco, CEO of
, an Action Alerts PLUS stock that's up 14% since Cramer last spoke with DiMicco on July 22.
DiMicco said that Nucor is a long-term focused company, which is why it has invested over $6 billion into their assets since 2007. He said Nucor now has tremendous leverage, including a low cost structure and a great team of people. That's why the company is able to make money at just 70% capacity utilization. "Imagine what we'll be doing at 91% utilization," he said.
DiMicco also said that he's seeing significant demand for raw materials worldwide, and that demand is being driven by real underlying growth. He said it's a slow, steady process that will take years to reach its former highs, but the markets are all moving in the right direction.
DiMicco also took aim at what he called failed U.S. trade policies that overburden U.S. companies with regulations and lead to distorted trade practices. He said our country needs to fix these issues before they make things even worse.
Cramer continued his support for Nucor, calling himself a "buy, buy, buyer."
Am I Diversified?
Cramer played "Am I Diversified" with callers to see if their portfolios have what it takes. The first caller's portfolio included
Cramer said this portfolio was OK, but argued that Wal-Mart and Starbucks could be both considered retail stocks, in which case he would lose Starbucks.
The second caller's top holdings included
Annaly Capital Management
Cramer said this portfolio was diversified.
The third caller had
as their top five stocks.
Cramer said he'd bless this portfolio, even though he considers both USA Mobility and Endo to be speculative stocks.
The fourth caller's top stocks were
Kinder Morgan Energy Partners
Cramer said this portfolio was perfection and was well played.
Cramer told a viewer that he would take profits in
and play with the house's money. He told another viewer that he'd be a strong buyer of
When asked about the shipping business, Cramer said there are still far too many ships and he'd still stay away from that group. When asked when is a good time to take profits, Cramer said he'd start scaling out of a stock after a 25% gain.
And finally, when asked if a company's high debt is a problem, Cramer said for companies with huge cash flows, like
, debt is not an issue, which is why he still likes that company.
Cramer was bullish on
He was bearish on
Magnum Hunter Resources
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long Caterpillar, Alcoa, Nucor.
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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