Skip to main content

Every so often a new CEO comes into a company and makes an immediate difference, Jim Cramer told viewers of his "Mad Money" TV show Wednesday.

It's rarer when this happens with a "behemoth," and rarer still when it happens to two behemoths at once, he said. Yet, it has happened to both


(KO) - Get Coca-Cola Company Report



(PEP) - Get PepsiCo, Inc. Report

, Cramer said.

It is because of this strength in leadership at Coke and Pepsi that Cramer wants people to buy the stocks. The new chief executives at these two beverage companies have done what he believes to be the impossible: They changed the culture of their companies and also the direction in which the stocks were moving.

Coke had "pathetic" growth and looked like a "goner." But then its CEO, Neville Isdell, turned it around, Cramer said. Neville expressed his unhappiness with the company's stagnation, something no one else in management was willing to admit.

He also hired new a marketing team and got Coke's international sales rolling again, he said.

And then Coke went from being a $38 stock to a $51 stock, Cramer said. It's moved, but is not done going up. "We are only starting to see the fruits of Neville's work," he said.

Moving on, Cramer said he believed that Pepsi couldn't get much better. But then Indra Nooyi stepped in as CEO and "pumped new life" into Pepsi's Frito-Lay division by introducing healthy snacks, he said.

Now the company's growth is accelerating from 5% to 7%, and things should only get better for Pepsi under Nooyi's leadership, Cramer said.

Another aspect of Pepsi that Cramer likes is that the company is "embracing youth." It had some of the most popular commercials during the Super Bowl, which not only targeted young people, but also were created by young people, Cramer said.

Coke and Pepsi are much more than cola companies now, courtesy of new management, he said, and predicted that Coke is headed from $51 to $60 and Pepsi from $67 to $75.

TheStreet Recommends

Image placeholder title


Private-equity funds are sitting on billions of dollars. The next stock Cramer believes could benefit from those cash hoards on a takeover basis is

Cheesecake Factory

(CAKE) - Get Cheesecake Factory Incorporated Report


CAKE, he said, just reported its numbers and met its estimates. Now the stock is up big, Cramer said. But it doesn't matter, because it is just the beginning of a ramp. People need to get into CAKE now, he said.

Private-equity firms like to buy companies with big cash flows that are not living up to their full potential, Cramer explained. CAKE has a "pristine" balance sheet with no debt, which is especially attractive to the private-equity guys, he said.

Plus, it has one "glaring" flaw that could easily be fixed: Its prices are too low. CAKE has enough demand to raise its product prices, Cramer said.

If CAKE were private, Cramer believes there would be more room for it to grow outside of its business, and it also would be able to close certain stores that are not working -- without having to worry about repercussions in the stock price.

However, even though CAKE looks attractive from a takeover perspective, a takeover could be tough here, Cramer said. The CEO is also the founder of the company and might not want to sell it, he said.

Though CAKE's price should be a lot higher if it does get taken private, Cramer said he isn't just recommending the company because he believes it's a takeover target. CAKE's fundamentals also need to be good because if there's no takeover, he doesn't want people to be stuck with a "crummy" stock that keeps going lower.

Cramer said have your CAKE because its fundamentals are good.

Am I Diversified?

Cramer's first caller kicked off the show's weekly "Am I Diversified?" segment, naming the following five stocks:




Lundin Mining



Genco Shipping & Trading

(GNK) - Get Genco Shipping & Trading Ltd Report





Union Pacific

(UNP) - Get Union Pacific Corporation Report

, the last two of which Cramer owns for his charitable trust,

Action Alerts PLUS.

Cramer told the caller that he was diversified and that he wouldn't change a thing.

Cramer's next caller said he owned these five plays:

Grey Wolf









Northgate Minerals



Level 3 Communications



Cramer pointed out that Solectron is too much like EMC. He suggested selling Solectron and picking up a defense stock. Cramer also told the caller that he prefers Lundin Mining to Northgate Minerals.

In his "Mad Mail" segment, Cramer called rail play

Kansas City Southern

(KSU) - Get Kansas City Southern Report

"so right" and said he should include KSU in his pantheon of railroads.

Responding to his next mailer, Cramer said


(DENN) - Get Denny's Corporation Report

is about to report, and he doesn't expect its numbers to be good. He advised waiting until after it reports to buy it.

Cramer said the turn at Denny's has been slow, and he doesn't want anyone to buy it on a takeover basis.

During his "Sudden Death" round, Cramer was bullish on

Savient Pharmaceuticals



BioMarin Phramaceutical

(BMRN) - Get BioMarin Pharmaceutical Inc. Report



(T) - Get AT&T Inc. Report

. He was bearish on

MetroPCS Communications



Lightning Round

Cramer was bullish on

State Street

(STT) - Get State Street Corporation Report





Nastech Pharmaceutical



Burger King




(MCD) - Get McDonald's Corporation Report



(PH) - Get Parker-Hannifin Corporation Report





Thermo Fisher Scientific

(TMO) - Get Thermo Fisher Scientific Inc. Report


Trinity Industries

(TRN) - Get Trinity Industries, Inc. Report


Charter Communications

(CHTR) - Get Charter Communications, Inc. Class A Report


Cramer was bearish on

Simon Property Group

(SPG) - Get Simon Property Group, Inc. Report


XM Satellite Radio



For more of Cramer's insights during the Lightning Round, click here


Want more Cramer? Check out Jim's rules and commandments for investing from his popular book by

clicking here


At the time of publication, Cramer was long Union Pacific and Sears Holdings.

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.