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NEW YORK (
) -- Today was a bizarre day, one where the news of individual companies actually mattered, Jim Cramer said Wednesday. He told
viewers that after today's strong Wall Street rally they should savor the gains for tomorrow we'll all likely be right back to worrying about Europe.
On a day when the European Central Bank made a rare statement exuding confidence that member banks aren't on the brink of collapse, Cramer said the bullish news from U.S. companies took center stage. He said companies such
Snap on Tools
told investors their businesses are strong thanks to increasing auto sales while many home builders received analyst upgrades thanks to robust spring sales.
Cramer said that U.S. companies are obviously doing well when a $30 million secondary offering from
can net investors a quick 4.1% gain.
Dick's Sporting Goods
, all of which had positive things to say about their business.
As for Federal Reserve Chairman Ben Bernanke's testimony Thursday, Cramer said he doesn't want to hear about another rescue package, he expects to hear that the U.S. is doing just fine and will be doing even better once the overhang of Europe has gone.
So while it may be fleeting, Cramer said investors should cherish today's gains while also being prepared for the debacle in Europe to rear its ugly head again tomorrow.
Playing High-Growth Companies
The high-growth sector is one that can make investors a lot of money if they know how to play it, Cramer told viewers.
Cramer explained that it make seem odd to group together stocks like
Chipotle Mexican Grill
but all these companies have one thing in common -- high growth -- and that makes them all attractive to mutual fund managers.
That's why when a company like Ulta Salon reported blow-out earnings that rose 47% on a 10% rise in same-store sales, the rest of the high-growth names followed Ulta's seven point rise.
Cramer said Ulta had a lot of positive things to say in its quarterly results, including increasing gross margins and increased expansion plans to increase from 470 stores to 1,200 instead of the previously planned 1,000 locations. But that does not mean investors should run out and buy Ulta, cautioned Cramer. He said investors should never chase momentum stocks because the same mutual funds that love them can also turn on a dime.
Cramer reminded investors they should always keep a diversified portfolio, one that offers dividend protection in a choppy market. They should have growth stocks in their portfolios, he said, but those stocks should only be bought on a pullback.
In the "Executive Decision" segment, Cramer spoke with Nick Akins, president and CEO of
American Electric Power
, an Ohio-based electric utility with a 4.7% yield that's at the heart of America's battle to switch from dirty coal to cleaner, cheaper natural gas.
Akins said American Electric Power, along with the entire utility industry, have many challenges ahead of them. He said his company balances the interests of many groups, including shareholders and customers as well as utility commissions and the Environmental Protection Agency.
At the heart of the issue are new EPA regulations that require billions in capital investment to retrofit older coal plants to meet current environmental standards. Akins said whether they upgrade their coal plants or replace them with natural gas, the costs are enormous and couldn't come at a worse time as growth has stalled and the electric grid itself is also undergoing refurbishment.
Akins said that even a two-year delay in implementing the new regulations would cut the cost of compliance by a third, however the EPA is not been receptive to that proposal.
The irony of the new regulations is that back in the 1970s, at the height of the oil shortage, utilities were told to switch from oil to coal, said Akins. But now the pendulum is swinging the other way, and there is an exodus away from coal and towards natural gas.
Cramer said despite the industry's challenges, when the turmoil in Europe settles down, investors will be flocking back to American Electric Power, which remains a great stock to own.
Here's what Cramer had to say about caller's stocks during the "Lightning Round":
: "This is a tough call. If Europe goes down, Huntsman goes down. We're not going to buy it here."
: "Another industrial company that needs Europe. I'm saying don't buy until we have clarity."
: "Sell, sell, sell. The stock you want is
: "I like CSX but it's coal related and it doesn't have the yield I want."
: "I think that we're in excess supply of disk drives. There are bad numbers coming. If it hits a 3.5% yield, I'm a seller."
: "This is another one protected by it's yield, but if it hits 3.5% you're going to have to sell. "
: "No. That one is broken and I don't like the ones that are broken. "
Checking in With Pebblebrook
In a second "Executive Decision" segment, Cramer sat down with Jon Bortz, chairman, president and CEO of
Pebblebrook Hotel Trust
, a hotel REIT with a 2.3% yield.
Bortz described Pebblebrook as a unique company, one that's paying out less than a typical REIT but also one that's growing by 24%. He said the concept is simple -- take advantage of market conditions to buy distressed hotel properties and turn them into great properties.
Pebblebrook currently owns 21 hotels in 14 markets and boasts 90% occupancy in its 1,700 rooms in New York City. He said while there are a few new hotels being built, primarily in New York City, growth in the hotel business has virtually been at a standstill as financing has dried up.
When asked about Pebblebrook's smaller-than-average yield, Bortz explained that because it is a growth company, it needs to return to the capital markets for funding. In fact, the company has raised $1.2 billion over the past 24 months alone. As such, Bortz said it wouldn't make sense to pay out more to shareholders only to borrow that money back at higher costs.
Cramer called Bortz a "master" of the hotel business and called Pebblebrook a great company to own.
Am I Diversified?
In the "Am I Diversified" segment, Cramer spoke with callers and responded to tweets sent via Twitter to
to see if investors' portfolios have what it takes for today's markets. The first portfolio included:
Plum Creek Timber
Kinder Morgan Energy Partners
SPDR Gold Shares
Cramer said that while this portfolio has several REITs and master limited partnerships, they're all in different sectors and are diversified.
The second portfolio's top holdings included:
( KFT) and
Cramer said that he would bless this portfolio, as Coke doesn't have a major food component to compete with Kraft.
The third portfolio had:
Bank of America
Enbridge Energy Partners
as its top five stocks.
Cramer recommended selling Dendreon and adding a technology company like
, a stock which he owns for his charitable trust,
Action Alerts PLUS.
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer's Action Alerts PLUS had positions in AAPL and KFT.
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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