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Forget everything you've ever thought about the drug, food, minerals, oil, heavy machinery and metals sectors, Jim Cramer told viewers of his "Mad Money" TV show Monday.
"I've found something totally unprecedented, and it needs to be responded to," said Cramer, referring to the fact that he believes secular growth stocks have become cyclical and vice versa.
What does this "authentic Wall Street gibberish" mean? "On Wall Street, we are addicted to growth," Cramer said, adding that investors will pay a premium for big growth and even more for organic growth.
He said that the stocks that deliver this type of growth are secular stocks, and they should give high levels of growth through thick and thin. Traditionally, health care, food and beverage and light consumer goods have been considered secular sectors.
The market has typically paid less for inconsistent and sporadic growers like oil companies, and big infrastructure businesses -- pretty much "anything that bends metal and has a smokestack," he said. These stocks should do poorly when things slow down, but ramp up when the economy is booming.
But Cramer believes that "something different is happening now."
, these are the new secular growth stories, he said. Meanwhile, food, health care and consumer goods stocks like
Procter & Gamble
are a "house of pain." Cramer owns Procter for his
ActionAlerts PLUS charitable trust portfolio.
"This is not a rotation," he said. "Consistent companies are now inconsistent, and they're driving us nuts, and the inconsistent ones have become rock solid."
He said that part of the reason for this is the fact that global forces are providing big business for companies like Caterpillar and
. These companies are levered to developing countries that are still modernizing because these places need heavy machinery to create new infrastructure.
Meanwhile, drug companies and food-and-beverage plays are at the mercy of governments, he said, citing the fact that
have been booted out of our school systems and that drug companies could get squeezed by new government health-care initiatives.
He said that consumers should buy
He owns the last six stocks on that list for
An Israeli Piece for Your Portfolio
Warren Buffett is buying an 80% stake in
for $5 billion, but Cramer said that he wouldn't go to Israel just to buy a ""metal bender." He believes that if viewers want to buy an Israeli company, they should check out
Nice is Israel's dominant company for recording and retrieving phone calls, which means that it's involved in monitoring calls for customer service and to look for terrorism, Cramer said.
The company provides voice recording and communications-intelligence products, has a good balance sheet, no debt and is growing revenue very quickly.
Nice has seen its margins expand every year for the last five years, he added.
As for Ness, the company offers software outsourcing, network-security-systems integration and consulting, meaning that it overhauls an existing technology network to make it more efficient and cheaper.
Cramer said that Ness also has good bloodlines. It has worked on a project for Coca-Cola, and it digitized the entire Israeli justice system. The company's earnings results were in line with expectations, and it reaffirmed its annual guidance.
Because it didn't blow away the numbers as expected, Cramer said that the stock fell and now offers an opportunity to pick it up on the cheap.
These companies share an important characteristic, he said. They don't make anything and are the "paradigmatic examples of a call-center society."
A Kazakhstan Oil Plan
Dick Cheney loves Kazakhstan, said Cramer, referring to the vice president's recent trip to the central Asian nation. It's because he loves the oil there and wants to make sure we can get our hands on it without interference from Russia or Iran, Cramer said.
A lot of people on the left will make a big fuss about this trip, Cramer said, but this would be foolish because "you can't care too much about oil."
In order to make money on our country's growing interest in that country, he said to take a look at
( TMY), "a company that has really lagged the rest of the oil patch because investors have been so afraid of instability in Kazakhstan."
However, this isn't a great company, Cramer said, noting that it's a risky stock to own. Last year it only produced 1,000 barrels of oil per day, and it hopes for an increase to 10,000 bpd by the end of 2006. But the company is not on fire yet, and it has a lot of debt on the books.
However, past poor performance means that the company will be up against "super easy comparisons" to last year's numbers. The minute someone says that the results have come in better than expected, the stock will move higher.
But Cramer believes that the company could get a real lift now that the U.S. is showing more interest in Kazakhstan.
The Airgas Up There
Cramer said that he "has been loving the bull market in air," referring to the fact that he likes
. But the stock came in after the company reported what he said was a decent quarter.
Cramer wondered if this is because its raw costs for things like hydrogen are going up and he asked the company's chairman and chief executive, Peter McCausland, who joined Cramer by telephone.
McCausland replied that now is the time to be in his company because of the favorable pricing environment. He added that Airgas products are being used to get more fuel out of old oil wells and that industrial demand is still very strong.
Non-residential construction is outstanding, especially in the energy sector, McCausland said, and the company is still seeing double-digit growth.
Cramer said that he believes Airgas is one of the new secular growers.
To view Cramer's interview with McCausland, click here.
Cramer was bullish on
Level 3 Communications
Vasco Data Security International
Black & Decker
Cramer was bearish on
Nordic American Tanker Shipping
For more of Cramer's insights during the most recent Lightning Round, click here
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At the time of publication, Cramer was long Alcan, BHP Billiton, Foster Wheeler, Halliburton, Nabors, Occidental Petroleum, Procter & Gamble and Yahoo!.
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