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The main challenge for many investors is to find stocks that are good investments even though the market has had a big run, Jim Cramer told viewers of his "Mad Money" TV show Thursday.
There are not a lot of stocks he can call cheap, Cramer said, but luckily for his viewers, he's found a sale in the supermarket stocks. A few of the supermarket plays deserve to be cheap because some are falling apart and shouldn't go higher anytime soon, he said. But there's one that's cheap and good.
"My supermarket of choice is
," Cramer said, calling the stock a "serial outperformer." Kroger's earnings per share not only came in 4 cents above average, but the company also raised guidance.
This is not what the Street expected, he said. Market players thought the supermarkets were in trouble because of inflation and competition. But inflation is under control, Cramer said. And
strategy is "failing" because no one wants to shop at a big-box retailer for food, he said.
Kroger is going head to head with
stores, and while Supervalu looks cheaper, it is "a value trap," Cramer said. Supervalu's future value is declining.
Meanwhile, Kroger is "firing on all cylinders" with an improved presentation and more upscale products, he said. Plus, the company bought back 3% of its shares outstanding last quarter and it has better than expected margins and they expect them to go higher, Cramer said. "That's not something you want to miss."
Starent in His Eyes
This week, Cramer's taking a first look at overlooked initial public offerings. So far in his five-part series, he's suggested people consider buying
Before recommending his overlooked IPO for the day, Cramer advised viewers to wait for a pullback when looking at these stocks because a lot of them "have gotten pricey," he said. If the stocks don't come down, don't buy them, he stressed.
Moving onto his overlooked IPO pick of the day, Cramer highlighted telco name
Starent, he said, is a great story. It has technology that is the backbone for sending photos, watching videos or playing games on your phone, Cramer explained. Some of its biggest clients include
The company came public on June 5 and is up about $10 a share since then, but Cramer believes it could be the next
In a slowing economy where fewer and fewer companies are displaying good growth, Starent has a long-term growth rate of 57%, he said. It has great growth and superior technology, but "the price isn't quite right," Cramer said. Therefore, wait at least a week if not more for a pullback in this stock, he warned. "And if it doesn't come in, take a pass."
For people who are really eager to get in, Cramer suggested buying 25 out of 100 shares now and buying the rest on a pullback.
Macquarie Bank Flies Solo on 'Sell Block'
Cramer devoted his entire "Sell Block" segment to selling one stock:
First, Cramer clarified that while Macquarie has not done anything illegal, it has done something that makes him "uncomfortable." Therefore, he said, it's time to take the gain in the stock and sell it, especially if people bought it off Cramer's recommendation. He said he doesn't want any association with it.
Jim Chanos, the noted early critic of Enron who has done "high-quality work all his career," is now shorting Macquarie, Cramer explained, and his reasons for doing so are compelling.
Macquarie, he said, buys big infrastructure assets, and according to Chanos, the bank "dramatically overpays" for its purchases and uses debt to buy them. What's more is that Macquarie itself doesn't own the assets; it creates funds that own them. Macquarie manages the funds and makes management fees and banking fees on the deals, Cramer said.
There's no saying how much debt the bank is in because Macquarie doesn't have to record it on its books, as the debt is on its funds. "The debt is there, but not there," he said. "It's in the funds."
"We've made really good money here, but now it's time to take it off the table and forget about it," Cramer said.
Hansen Medical House Call
Cramer welcomed Dr. Frederic Moll,
founder and CEO to the show.
Currently, Hansen is building a presence in the big, growing market of electrophysiology with robotic catheters, Dr. Moll said. The company recently entered into a development and co-marketing relationship with St. Jude, where both will sell the Sensei robotic catheter system, he said.
The chief executive said he is very excited about the platform and entering into the new market.
Wait for a pullback, but then buy this stock, Cramer told viewers.
Cramer was bullish on
Cramer was bearish on
Ruth's Chris Steak House
( NXG) and
For more of Cramer's insights during the Lightning Round, click here
During the "Sudden Death" round, Cramer was bullish on
Companhia Vale do Rio Doce
Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by
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