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"It's never been harder to buy anything commodity related," Jim Cramer told viewers of his "Mad Money" TV show Tuesday. "And it may not be worth your time, effort or sanity."
Cramer said commodity stocks bear no relation to the actual health of the companies. In effect, companies that are doing well are seeing their stocks slammed in the stock market.
That's because these stocks are completely under the control of large hedge funds, some of whom are much larger than the companies they trade, he said.
With the end of the quarter nearing and fund redemptions on the rise, Cramer said there's a rush to get out of the commodity stocks like he's never seen before. He said the speed and volatility of the decline in some of these stocks is mind-blowing.
Even for a seasoned trader like Cramer, who now trades only for his charitable trust
Action Alerts PLUS, the markets have proven to be too difficult. Cramer admitted to buying 100 shares of
at $40 a share just two days ago, only to sell them today at $35 a share for a loss.
Cramer still contended that the commodity stocks have fallen far greater than that of their underlying commodities. Foster Wheeler, he noted, has $10 a share in cash, and trades at just 6 times its earnings. Yet even with this incredible valuation, Cramer still asked "why buy these stocks at all?"
Cramer: I Expect FedEx to Deliver
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Cramer said until worldwide demand increases, or some of the smaller commodity companies get takeover bids, there will be no end in sight for just how low these companies will trade.
In the wake of the surprise announcement from
that earnings would be 36% better than expected this quarter, Cramer said now is the time to revisit the restaurant stocks.
As oil prices continue to fall, Cramer expects upside surprises from the largest and strongest restaurant chains such as
Cramer's last mention of Darden was a sell recommendation on June 6, 2007. Since then, he said the company has lowered guidance so far that it sets the stage for it to "under-promise" and "over-deliver."
Cramer said Darden has many things playing in its favor, including falling raw costs and cheaper gas prices. With price increases already in place, companies like Darden can only benefit as the raw costs that prompted those increases begin to decline. Likewise, as gas prices continue to fall, more and more consumers should be returning to the restaurant scene.
Cramer applauded Darden for managing of its food costs, which are estimated to rise only 2% this year, despite double-digit increases in many items. He also mentioned the company's 2.6% dividend yield and stock buyback programs as added reasons to own the stock.
Clean, Cheap Gas
Cramer talked with Andrew Littlefair, president and CEO of
Clean Energy Fuels
, which he feels is amidst a multi-year move as natural gas becomes a serious contender for our country's alternative fuel needs.
Littlefair said Cramer's vision of a nationwide network of Clean Energy fueling stations is not a pipe dream and can come into fruition.
Littlefair reminded viewers that 1 million trucks using natural gas would displace 40% of the diesel fuel used in the U.S. He noted that on average, natural gas saves $1.50 a gallon at the pump and produces 50% less emissions.
Littlefair went on to say that converting to natural gas would be huge for companies such as the privately held Swift Transportation, which buys around 1 million gallons of fuel a day.
Littlefair also remained very optimistic for the passage of a California ballot initiative slated for November that would earmark $3 billion for alternative fuels and put another 25,000 natural gas vehicles on the road. He said that initiative alone will save 1.2 billion gallons of gas and diesel fuel a year.
Cramer and Littlefair both questioned why companies like
manufactures 19 models of natural gas vehicles abroad, but none here in the U.S.
Cramer again recommended Clean Energy as his No. 1 speculative natural gas pick.
Am I Diversified?
Cramer talked with callers and reviewed their portfolios. The first caller's portfolio included
Cramer called this portfolio "perfection," saying he liked it very much.
The second caller's top holdings included
( SKWS) and
Cramer call this group of stocks a fantastic portfolio.
Cramer was bullish on
He was bearish on
Cramer was bullish on
Research In Motion
He was bearish on
( NCC).P/>Want more Cramer? Check out Jim's rules and commandments for investing by
Read more of Cramer's Mad Money Lightning Round insights
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At the time of publication, Cramer was not long on any stock.
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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