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) -- "Don't be fooled by the 'better-than-expected' game," Jim Cramer told the viewers of his "Mad Money" TV show Friday.

He said when it comes to judging a company's earnings report, the game is much more complex than most people realize.

Cramer said there are six key companies reporting their earnings next week. They include


(TGT) - Get Report


Gap Stores

(GPS) - Get Report


TJX Stores

(TJX) - Get Report

in retail, and

(CRM) - Get Report



(NTAP) - Get Report

and most notably,


(DELL) - Get Report

, in technology.

Cramer said there's an art, and a science, to determine whether any of these companies will deliver a true "better-than-expected" quarter, and whether the stocks will rocket higher, or get crushed, after they release their reports.

Cramer said most investors just look at the consensus estimates, which amounts to the average earnings expected from all of the analysts that cover a company.

But he said the consensus estimates are only part of the story. There's also a "high man," the analyst with the highest projected earnings. If a company fails to beat the high man's number, a stock could still get crushed, even if it beats the consensus.

To make matters worse, Cramer said there's also a "whisper" number, which is sometimes a number that's even higher than the high man. Cramer said in order for a company to truly deliver a "better-than-expected" quarter, it must blow through all of these estimates, forcing the company, and the high man, to raise their estimates.

If the key companies reporting next week fail to beat all of these numbers, the companies, and their respective sectors, could head lower.

>>Vote in Our Poll: Bull or Bear?

Know Your IPO

In this segment, Cramer said the IPO of network security firm Fortinet, which is set to trade next week under the ticker "FTNT" between $9 and $11 a share, is well worth a look.

Cramer said Fortinet is not a young, unseasoned company, but rather a great business with solid fundamentals and a stellar management team. The company's CEO, Ken Xie, was the founder of Netscan, which popped 48% when it came public, and was eventually sold to

Juniper Networks

(JNPR) - Get Report

for $4 billion.

Fortinet is the No. 1 player in "unified-threat management," a platform which provides companies with everything from antivirus and anti-spam protection to intrusion detection and data protection. The company provides a lower total cost of ownership for companies, and offers a subscription service for realtime monitoring of a company's network.

Cramer said this high margin business is worth between $13 to $19 a share based on its fundamentals, making it worth 30% to 90% more than the expected offering price. Cramer said he'd definitely be a buyer of this IPO.

Speculative Plays

"It pays to take a chance on a speculative company," Cramer told viewers, "as long as the company's fundamentals are in tact."

He said among the 21 companies he's mentioned for "Speculation Friday" over the last five-and-a-half months, all have beaten the major averages over the same time period.



(AMD) - Get Report



( COMS), two companies up a staggering 21% and 31% respectively in just one day.

Cramer last recommended AMD on May 19, and the stock surged 46% on yesterday's news of a large antitrust settlement. He recommended 3Com on Sept. 25, saying that the company was finally getting it's act together, a sentiment that was shared by


(HPQ) - Get Report

, who tendered a takeover bid for company.

Cramer said there are other speculative standouts as well, including

Starent Networks

(STAR) - Get Report

, which is up 80% since that stock's last recommendation.

Speculation makes investing fun and exciting, said Cramer. And for those who invested in these high-flying names, he said it's time to take profits, closing out positions in 3Com, and letting the rest ride.

Mad Mail

Cramer told a viewer that he's not worried about

China Unicom

(CHU) - Get Report

, a stock which he owns for his charitable trust,

Action Alerts PLUS.

Cramer told another viewer that


( KFT) is not a good stock, and he'd wouldn't wait and would be a seller on Monday.

Cramer told a final viewer that unlike Kraft,




a good stock, and he'd take a few profits, and let the rest ride.

Lightning Round

Cramer was bullish on

Devon Energy

(DVN) - Get Report



(APA) - Get Report


ConAgra Foods

(CAG) - Get Report



(BP) - Get Report





Express Scripts



He was bearish on

Churchill Downs

(CHDN) - Get Report


Chesapeake Energy

(CHK) - Get Report


Tyson Foods

(TSN) - Get Report


CVS Caremark

(CVS) - Get Report


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clicking here.

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At the time of publication, Cramer was long Express Scripts, BP, China Unicom.

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."

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