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NEW YORK (
) -- "I can't blame anyone for wanting to leave the stock market," Jim Cramer told the viewers of his
"Mad Money" TV show Monday.
He said the obstacles in staying in the market can't be overlooked but said "they can be overcome with hard work."
Cramer was responding to the news that stocks have had their 16th consecutive week of equity outflows, as more and more investors leave the stocks for bonds and other investments.
Cramer said that despite the market's incredible rebound from their 2008 lows, and despite this September being the strongest in 61 years, investors are still heading for the exits.
Could we be entering another "lost decade" like the 1970's where the market trades sideways? Cramer said perhaps. But he argued there are still genuine opportunities for investors to make big profits in stocks. He said investors can beat the averages with a little homework such as with the choice of high-quality dividend stocks, which continue to perform well, as do countless takeovers and mergers, and even a handful of IPOs.
Cramer said there's no denying the strength of stocks like
, a stock which he owns for his charitable trust,
Action Alerts PLUS, or the strength of
Chipotle Mexican Grill
, just a few of the great stocks that can be had.
Cramer said there's always the possibility that the baby boomer generation won't be bringing their IRAs and 401Ks back to the stock market, Cramer hopes they stay and reap the rewards still out there.
In the "Know Your IPO" segment, Cramer said not all IPOs are created equal, and only a select few are worth owning for the long term. That's why out of the nine companies coming public this week, Cramer only recommended four, with only one being investable after the IPO.
Cramer said his favorite of the group is Campus Crest Communities, which will be trading under the ticker CCG. Campus Crest is an alternative student housing REIT that's a fabulous play on the need for more places for students to live, said Cramer. The deal is expected to price between $12.50 and $14.50 a share, but he said even if the stock doesn't jump higher, he'd still be a buyer for the long term.
Cramer also has positive words for China Ming Yang Wind Power, set to trade under the ticker MY. He said this non-state owned wind turbine maker is taking market share and asserting China's dominance in the global wind power market.
Shares are expected to price between $14 and $16 a share, and Cramer said he expects an 18% pop in the share price. After that, however, Cramer said take the money and run.
Amyris Biotechnologies is another interesting IPO, said Cramer. The deal is expected to price between $18 and $20 a share under the ticker AMRS. Cramer said the industrial enzyme maker could see $24 a share on its IPO.
Finally there's Elster Group, trading under the ticker ETL. Cramer said this maker of gas and electric meters is expected to price between $16 and $18 a share, but could see $23 at its open. As with Ming Yang and Alyris, Cramer said this deal is a trade only on its IPO, adding he's not a buyer in the open market.
LuLuemon's Growth Story
"When you're wrong about a stock, don't dig in your heels," Cramer told viewers, as he did an about face on
, a lifestyle brand of yoga and fitness apparel.
Cramer said with Lulu up 84% over the last 12 months, and an astonishing 860% from the market lows in 2009, he underestimated this company's potential for growth and profits. "I'm changing my mind," said Cramer, as he upgraded the stock from a buy to a buy, buy, buy.
Cramer said Lulu is all about growth. The company has 130 stores, and is set to open an additional 24 to 25 stores a year, up from just 12. Cramer said it will be another six to seven years before the company has fully saturated the market. In addition, Lulu's same-store sales at its existing stores are up 31%, proving that there's high demand for its products.
Lulu last reported earnings of 30 cents a share, beating estimates by six cents on a 56% increase in revenues and upside guidance. Cramer said Lulu's stock is cheap, trading at just 29.9 times earnings despite a 27% growth rate.
He said given a multiple comparable to other lifestyle brands like
( WFMI) or
Chipotle Mexican Grill
, Lulu should be trading 28% higher than where it does today.
IPO Track Record
In a second "Know Your IPO" segment, Cramer looked back at his past IPO picks to see what lessons he could garner. Over the past 12 months, Cramer's recommended 13 IPOs as investments, three as trades, and told viewers to steer clear of three others.
Cramer said perhaps the biggest lesson he's learned from these past picks is that most IPOs are better as trades, rather than as investments. His investment IPO picks were up 13% on average at their openings, but have largely fallen flat since.
Likewise with his IPO picks for trades only. Cramer said
were up 19% on average at their opens, but now trade at an average 5% loss.
Cramer said another lesson is that if a sector is hated by the markets, IPOs will be hated as well. That was the case with
, two tech IPOs that haven't fared well since their debuts thanks to a lagging tech sector.
What IPO's work best? Cramer said it should come as no surprise that IPOs that are cheap relative to their peers, and those with great earnings visibility, like
( ACOM), both of which have subscription revenue models.
Cramer was bullish on
He was bearish on
( APWR) and
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long Apple.
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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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 TheStreet.com. 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 TheStreet.com, 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.