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NEW YORK (
) -- "Stop, look, listen and learn," Jim Cramer told viewers of his
TV show Friday, as he laid out his game plan for next week's trading.
Cramer said investors must sit on their hands while watching for clues to the second half of the year while in the middle of the earnings season.
Next week's trading will culminate with the government's jobless report on Friday, said Cramer. If the news is bad, with unemployment over 9.6%, then be prepared for pain. But in the meantime, Cramer said he'll be paying attention to the following sectors.
Cramer said he'll be watching both
, two key components of the smartphone revolution. He said with these companies, it's cashflow, not earnings, that will matter most.
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Procter & Gamble
, a stock which Cramer owns for his charitable trust,
Action Alerts PLUS, will be of interest on Tuesday, he said. He'd be a buyer on any weakness.
, maker of auto seats, should have a good quarter, and is perhaps the only stock he'd consider buying ahead of the quarter. Also of interest,
Cramer said to keep an eye on
Polo Ralph Lauren
for a read on high end retail.
Also on Cramer's watch list are the natural gas stocks such as
Fuel Systems Solutions
, and the stock exchanges
For his "Speculation Friday" segment, Cramer ventured into the cemetery to see if postmortem services should be a part of your portfolio. He said his research "uncovered"
, the nation's largest provider of burial and cremation services.
Service Corp., which operates 1441 funeral homes and 387 cemeteries across the country, is benefiting from the growing trend of prepaid funeral services. Cramer said that laws require that all monies paid for prepaid burials must be held in trust until the client dies. That allows Service Corp to have excellent visibility into its future profits.
Service Corp is four times the size of the next largest competitor, and with not a lot of competition in the industry, Cramer said it should prosper as more and more baby boomers ante up for prepaid services as they retire.
Cramer said he would not pay up for the stock, as the company just reported a two-cent earnings beat on better than expected revenue up 8%, and prepaid revenues up 15%. Cramer said there's room for Service Corp to run, but also no reason to chase the stock higher.
Cramer also noted that rival
is not as good a company, and he's not a buyer.
Life as a REIT
In the "Executive Decision" segment, Cramer spoke with Daniel Fulton, president and CEO of
, the timber giant that just recently transformed itself into a real estate investment trust. Weyerhaeuser is also part of Cramer's Action Alerts PLUS portfolio.
Fulton explained that a REIT structure was the best way to manage the company's 6 million timberland acres in North America. He said as a REIT, shareholders will only pay capital gains taxes on dividends, as opposed to paying corporate taxes on its income.
However as part of the transition, Fulton said that the Weyerhaeuser needed to pay out all of its accumulated profits as a special dividend, which it did on July 11. As a result, Weyerhaeuser shares dropped by $26.47 a share, the price of the special dividend.
Going forward, Fulton said the company's board will be setting the dividend rate for a future dividend in the fourth quarter of this year. He said Weyerhaeuser has a very bright future ahead of it as a REIT, with opportunities not only in timber and real estate, but also with oil, wind, carbon sequestration, among others.
Cramer called Weyerhaeuser "a bargain," staying the company's new corporate structure makes it only more appealing.
Am I Diversified?
Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included
Kinder Morgan Energy Partners
Cramer said this portfolio will do very well for many years.
The second caller's top holdings included
Cramer said this portfolio was also very well played.
The third caller had
Bank of America
Cramer said Alcoa is not his favorite, but the thought the portfolio was otherwise perfectly diversified.
Cramer was bullish on
He was bearish on
-- Written by Scott Rutt in Washington D.C.
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At the time of publication, Cramer was long Procter & Gamble, Weyerhaeuser.
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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