Cramer's 'Mad Money' Recap: Stubborn Analysts (Final)

Cramer chastised analysts for refusing to change their positions when the facts change.
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NEW YORK (

TheStreet

) -- "There's nothing less helpful than a Wall Street analyst," Jim Cramer told the viewers of his

"Mad Money"

TV show Monday, as he sounded off against those who are supposed to be helping the individual investor.

"These people refuse to change their minds," said Cramer, and in so doing, cost investors dearly.

Cramer explained that as mortgage worries looked like they were going to affect bank earnings, the mantra from the analysts was "we hate the banks." But, as the stocks sold off heavily on the news, not a single analyst stuck their neck out and said it was OK to buy. As a result, not a single analyst was able to catch today's big rally in

Citigroup

(C) - Get Report

, he said.

Cramer said the same pattern was repeated in toy maker

Hasbro

(HAS) - Get Report

, which sold off on its earnings release Friday. Not a single analyst had any confidence in the stock, said Cramer, adding not a one told investors to buy on weakness.

The same applies for

Netflix

(NFLX) - Get Report

,

Amazon.com

(AMZN) - Get Report

and

Adobe

(ADBE) - Get Report

, said Cramer. In each case, buying opportunities arose, but the rigid analysts refuse to change their positions.

Then there's Cramer favorite

Apple

(AAPL) - Get Report

, a stock which he owns for his charitable trust,

Action Alerts PLUS. Apple fell sharply in after hours trade on the heels of its record profits. But has the long-term story at Apple changed? Are the analysts excited to see a great stock at a lower price? Not a chance.

Cramer said for the analysts, there isn't a price where they'll change their mind. But for the individual investor, one with common sense, the bargain that was just created in Apple's stock, along with so many others, should be readily apparent.

Key Building Blocks

Cramer introduced viewers to his two new favorite people, Poly and Ethyl, as in polypropyline and polyethyline, two of the key building blocks for a recovering global economy. He said the chemical stocks are heating up, with companies like

PPG

(PPG) - Get Report

up 27% since he last recommended it on June 30 and

DuPont

(DD) - Get Report

up 35%.

Cramer recommended

LyondellBasell

(LYB) - Get Report

, a company the just recently emerged from bankruptcy, as his new favorite chemical stock. He said the new Lyondell looks nothing like the Lynodell that filed for bankruptcy in January, 2009. He said the new company has slashed over $1 billion in costs and is finally realizing the synergies promised by the merger of its two main components.

"Lyondell is a leaner, meaner market leader," said Cramer, referring to the company's No. 1 position in fuel refining, No. 1 position in polypropylene and No. 3 position in polyethylene. He said the company has proprietery technology that powers 40% of all polypropyline produced worldwide.

However the real driver to Lyondell is the record low price of natural gas, the company's largest input cost. With prices so low, Lyondell should profit handily. Cramer said the new company only trades at 11 times next years earnings, making it extremely cheap. He advised getting in before more analysts begin initiating coverage with buy recommendations.

Sorting Out Opinions

"Analysts are most helpful when they radically disagree with each other," Cramer told viewers, as he pitted two recent opinions of

Ingersoll-Rand

(IR) - Get Report

against each other to see who came out on top.

Cramer explained that recently an analyst initiated coverage of Ingersoll with a sell rating, while two weeks later, two other firms issued buy ratings on the company.

So who's right? Cramer said that Ingersoll is a conglomerate of different businesses, including climate control, industrial technology, HVAC, electronic locks and even golf carts. Nearly two-thirds of the company's revenue is derived from the U.S., while the remainder comes from overseas.

Cramer said the sell case for Ingersoll was based on "late-cycle worries," meaning that the analyst felt is was still too early in the recovery for most of the company's businesses to really participate. He said the analyst was making a big picture macro-economic call and applying it to Ingersoll, rather than looking at the company itself.

Cramer said he sides with the bullish case for Ingersoll, saying that investors want to get in early on this recovery play. He said according to the company's conference call, Ingersoll is already seeing a bottom in commercial construction, where are large chunk of the company's business units operate.

Ingersoll is now less hostage to the economy, said Cramer, and doesn't even need a full recovery to do well. The company sold its Bobcat construction equipment business and is doubling down on HVAC, and is also committing to more expansion overseas. Ingersoll is trading at a 12% discount to its peers.

Mad Mail

Cramer told a viewer that while copper is in demand in China, steel is not, so he's not a fan of

AK Steel

(AKS) - Get Report

, but would bless

Nucor

(NUE) - Get Report

, an Action Alerts PLUS stock, for the long term.

Cramer told a second viewer that he's not going negative on

Chesapeake Energy

(CHK) - Get Report

after an executive departure. He remained bullish on the stock.

Finally, Cramer blessed owning gold, up to 20% of a portfolio, and reiterated his $325 price target on

Apple

(AAPL) - Get Report

.

Lightning Round

Cramer was bullish on

Chesapeake Energy

(CHK) - Get Report

,

Endo Pharmaceuticals

(ENDP) - Get Report

,

Goldman Sachs

(GS) - Get Report

and

Avon Products

(AVP) - Get Report

.

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

To contact the writer of this article, click here:

Scott Rutt

.

To follow the writer on Twitter, go to

http://twitter.com/scottrutt

.

To submit a news tip, send an email to:

tips@thestreet.com

.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC

.

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

clicking here

.

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

.

At the time of publication, Cramer was long Apple, Nucor.

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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