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) -- "I really didn't want to see the markets up big today," Jim Cramer admitted to his

"Mad Money"

TV show viewers Thursday.

Cramer said today's big market rally was every bit as phony as Wednesday's decline, and he still recommends selling into strength and repositioning into dividend-yielding stocks.

Cramer explained that the problem with today's rally was that there wasn't anything fundamentally different to justify it. He said there was come good news, like



(CSCO) - Get Report

great earnings after a year of bad ones, and the news of a European ban on short-selling coming soon. There was also pretty good jobless data here in the U.S. coupled with record levels of insider buying at U.S. companies. Finally there was gold, which finally started to retreat after margin requirements were strengthened.

But does that warrant a 400-point rally? Cramer said we still have no leadership, either here or in Europe, and all of our leaders are still on vacation. The machines are still clearly in charge of the markets, he said, as noted by another day of big volatility. And the French banks are still in trouble, even if they won't admit it.

Cramer made it clear that without fundamental changes the market will continue this trend of increased volatility going forward. He said the trend is a sign of sickness, not of health. The predictions of a bottom today are every bit as wrong as the predictions of Armageddon yesterday, he said. Cramer continued to urge investors to use any strength to reposition out of technology and the banks and into safer dividend stocks along with raising cash.

"This market is not one you want to bet your nest egg or your childrens' college fund on," Cramer said.

High-Dividend Play

"It's time to circle the wagons around high-yielding dividend stocks," Cramer told viewers. And in the big pharma arena, that means


(SNY) - Get Report

with its juicy 5% dividend yield.

Shares of Sanofi were down 7.4% in Wednesday's big sell-off simply because the company is headquartered in France, the latest country to loath. Yet Sanofi only derives 10% of its revenues from its home country, making it now the cheapest of the big pharma stocks, trading at an astounding 6.8 times earnings, he said.

Cramer said that Sanofi does face patent expiration problems like most of its peers, but at this point all of those worries are known and baked into the estimates. What's not being considered is the company's exposure to the fast-growing emerging markets, which accounts for 30% of sales and represents higher margins, he said.

Sanofi has a panoply of drugs, everything from diabetes to cancer, and thanks to its acquisition of Genzyme, a portfolio of high-value orphan drugs used to treat rare diseases. The company is also a leader in vaccines, one market where there is high demand and no generic competition. In the cancer space, Sanofi has no blockbuster drugs in the pipeline, said Cramer, but it does have some small- and medium-sized projects showing encouraging results, he said.

Given the company's valuation and its dividend, Cramer said Sanofi is a steal when compared to its peers. The company also has an analysts day coming up on Sept. 6, which should help the stock recover from its recent doldrums, he said.

Most Undervalued Stock

Investors looking for a great long-term opportunity need to look at

EOG Resources

(EOG) - Get Report

, which Cramer called the most unvalued stock in the entire stock market.

Shares of EOG are down some 30 points from its 52-week high and is now trading at fire sale prices, said Cramer. EOG is a top oil producer in the Bakken shale region of our country and also has assets in Eagleford, Marcellus and many other shale plays to boot.

But the compelling story of EOG is in how little the market values the company's assets. According to recent estimates, EOG's 561,000 highly productive acres of land in the Eagleford shale should be valued at $35,000 an acre, or $19.6 billion. That figure rivals EOG's total market cap of just $24 billion, despite Eagleford only representing 8% of the company's total production.

Cramer explained that at these prices, investors are getting the rest of EOG essentially for free. The company also just delivered a 32-cent-a-share earnings beat on production that increased 89% year over year. Cramer said EOG's decision to move from natural gas to oil production was clearly the right move to make and the company is now benefitting handsomely.

Cramer said he'd use the market weakness to scale into EOG right here and would buy more if the stock goes any lower.

Insider Buying Shopping List

Insiders sell company stock for a million different reasons, Cramer reminded viewers, but they only buy shares for one reason, to make money. Using that fact, Cramer unveiled his "Shopping List: Part Two," which included dividend stocks that have also seen significant insider buying.

That list included

Equity One


, a shopping center REIT yielding 5%. Equity One's chairman recently purchased $5.5 million worth of company stock. Next on the list was

Dominion Resources

(D) - Get Report

, a mid-Atlantic utility with a 4.2% yield. Five officers of Dominion all recently purchased shares of this company.

Cramer list also included

NuStar Energy

(NS) - Get Report

, which stores and delivers energy. The company's chairman purchased $659,000 worth of this company's 7.5% yielders. Rural telco


(WIN) - Get Report

also made the list, after its chairman bought $111,000 worth of stock.

Cramer said he's soured on Windstream rivals


(CTL) - Get Report


Frontier Communications

(FTR) - Get Report

, both of which have been struggling.

Finally there was Cramer favorite


(HON) - Get Report

, which saw directors purchase $99,000 worth of company stock. Cramer said that Honeywell yields almost 3% and has an excellent five-year plan for growth.

Lightning Round

Cramer was bullish on


(NUE) - Get Report


WisdomTree Investments

(WETF) - Get Report






(NI) - Get Report


Goodrich Petroleum

(GDP) - Get Report


He was bearish on

AK Steel Holding

(AKS) - Get Report


Sprint Nextel

(S) - Get Report


Closing Comments

In his "No Huddle Offense" segment, Cramer opined on plans to ban short-selling of European bank stocks. He said that this plan will likely work for a few days, but only until short-sellers find other ways to drive these stocks lower. Cramer called the proposal a "Band-Aid for a chest wound."

Cramer said that Europe needs to force its banks to raise cash, either through secondary offerings of equity or through a TARP-style bailout. Only then, he said, will the strong banks survive to a point where the weaker ones can be fixed or absorbed. "Capital must be raised," Cramer concluded, "and the Europeans must rise to the occasion."

--Written by Scott Rutt in Washington, D.C.

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Scott Rutt


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At the time of publication, Cramer was not long any equities mentioned.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.