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The "best place to be," Jim Cramer told viewers of his "Mad Money" TV show Tuesday, is the
Dow Jones Industrial Average
because it's "full of opportunity."
Cramer believes the index will reach 14,548 this year, and he sees it climbing by close to 500 points in the next three months and then another 500 in the November-December rally he predicts will come. The Dow closed Tuesday at 13,540.
Cramer didn't pull the estimate "out of thin air," he said, but rather arrived at it after doing a bottom-up analysis of all the 30 stocks in the Dow by determining what price each stock is likely to reach by the end of the year.
In this second part of his weeklong series dedicated to evaluating the 30 stocks in the Dow, Cramer started Tuesday with
, a name that's driving him crazy "because people still don't get it."
"It is the single most misunderstood large-cap stock in the universe," Cramer said. People need to understand that Caterpillar, which he owns for his
Action Alerts PLUS charitable trust, is where the growth is. "It's in the machinery sweet spot," he said.
First of all, everything in housing is going to be up against "easy comparisons" during the second half of the year, Cramer said. But despite that, Caterpillar has more to do with infrastructure in the Middle East tar sands and the digging out of coal and petrochemical refineries in Dubai than it has to do with homebuilders such as
, he said. Caterpillar, he predicts, should reach $90 by year-end. The stock closed Tuesday at $75.51.
Moving on, Cramer said he believes that
has potential upside despite the company's leadership and that
, which closed today's session at $51.48, should go to $60 in six months.
Neville Isdell, Coke's chairman and CEO, has taken the beverage company's stock and made it so that it has growth in the mid-double digits, he said. Coke is diversifying beyond carbonated beverages, and its new product, Coke Zero, is a hit.
Further, even though
is high, "don't let this scare you away," Cramer advised. It has already outrun his price target of $80, and he believes it should still go much higher. Exxon closed at 82.77 Tuesday.
, Cramer said he considers this stock "a break on the Dow progress." He said DuPont might have a couple of points of upside coming, but it has paused here. The stock closed Tuesday at $52.04.
For his last Dow stock of the day,
, Cramer said he's taking "a pass" on this one for now.
McMoRan: A Natural Gas Buy
Every one thought natural gas was going to be "brutal," but the commodity turned around and has become a buy, Cramer told viewers.
There are a lot of ways to play the natural gas sector, he continued. Some of the names he said he likes are
, which he owns for his charitable trust, and
But for a riskier natural gas stock, Cramer said he likes
and believes it's a buy.
This is a stock that's going to move not in "drips" but in "gushes," he said. "Now that natural gas is close to $8, MMR is back on."
Cramer said he believes people could see a double in McMoRan, but he advised market players to use limit orders and not to buy too much of the stock at one time. He feels the potential upside is "enormous" for McMoRan if the company finds a big natural gas deposit, which is what it aims to do.
It's true McMoRan reported low guidance, but all the bad news has already been priced into the stock, Cramer added, and if it has good news, it should go up "much, much higher." Some of McMoRan's positives include the facts that it had optimistic drilling results this year and that the company does not compensate its management with cash. This means the management has serious interest in driving the stock's valuation, Cramer said.
If investors want a speculative way to play high natural gas prices, Cramer recommends buying McMoRan, he said.
The Case for MasterCard
Yesterday was a great day for monopolists and anticompetitive practices because the Supreme Court issued a ruling that makes it much more difficult to pursue with civil antitrust suits.
In a case such as this, there is always a winner, and here it is
, he said. MasterCard has been "nothing but a winner" since Cramer first recommended it, offering shareholders a triple, he said.
However, there has always been a "dark cloud hanging over the stock" even though it has consistently delivered good numbers. That dark cloud, Cramer said, was antitrust litigation.
and Discover sued Visa and MasterCard for antitrust violations, but now this suit should get dismissed, he said.
The one reason not to own this stock is now gone, Cramer said. Negative attention because of the suit has made people sell the stock, but now he believes "the short-covering tsunami" should send this stock higher.
Moreover, not one of the reasons to buy the stock has changed, Cramer said. The stock continues to have "big international growth," and it is gaining market share. Bears are worried about Visa going public, "but certainly you shouldn't let Visa scare you out of this great stock," he said.
Cramer said he can't see any reason why not to invest in MasterCard.
Mad Mail & Sudden Death
In the show's "Mad Mail" segment, Cramer told a viewer that he considers
a sell because it has gone up a good deal and has given people a "great gain." He believes it would be piggish to not cash in on the stock at this point.
Separately, Cramer told another mailer, he believes Halliburton is headed to $40 and that
Level 3 Communications
"exploded to the upside today."
During the show's "Sudden Death" round, Cramer was bearish on
Sirius Satellite Radio
Cramer was bullish on
Jacobs Engineering Group
Superior Offshore International
Chicago Bridge & Iron
Switch & Data Facilities
Cramer was bearish on
Aegean Marine Petroleum
For more of Cramer's insights during the most recent Lightning Round, click here
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At the time of publication, Cramer was long Caterpillar, Halliburton and Sears.
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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