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"Everyone has been saying that retail sales drove the markets up today, but that's utterly false," Jim Cramer told viewers of his "Mad Money" TV show Wednesday.
Cramer said the rally, which saw the Dow up 178.83 points and Nasdaq up 53.80 points, had nothing to do with a strong retail sales report, but rather the strength in oil prices. "Oil is the umbrella that makes everything else work."
Cramer likened the day's rally to many similar ones in 2007, when oil prices rallied despite high oil inventories. Cramer noted higher oil prices affects many different stocks and sectors.
They include stocks like
, which reported a better-than-expected quarter and also surprised with upside guidance. Cramer expects strength in First Solar to also spill over into other alternative energy plays like
The oil umbrella will also carry the natural gas stocks. Cramer likes
( XTO),which he owns for his charitable trust,
Action Alerts PLUS.
Cramer also says coal stocks such as
will work well.
Cramer says the oil umbrella extends to rail stocks like
And Cramer says agriculture stocks are also affected, including
, and infrastructure stocks such as
Chicago Bridge and Iron
FMC's Hidden Asset
"Investors need to have confidence in the stocks they own," Cramer reminded viewers.
And that's why he likes
. He said the stock has enjoyed a 26% gain since he first recommended it on June 8. He once again reiterated a buy on the stock, which closed Wednesday at $53.54, up $1.16 for the day.
Cramer sees hidden value in the company's soda ash business. Soda ash is used for a variety of things, including making glass and brick and cleaning swimming pools.
He used the recent acquisition of soda ash maker General Chemicals by Tata Chemicals as a metric to value FMC's soda ash assets. Using the numbers in that deal, Cramer values FMC's soda ash business at $2.3 billion.
By adding this number to FMC's other businesses, Cramer values all of FMC at $5.7 billion, or $70 per share. "This gives investors a 30% upside in FMC," Cramer told viewers, "This one's going higher."
Providing a Healthy Return for Shareholders
Cramer welcomed David Steiner, CEO of
( WMI), to the show to discuss his business.
Steiner said Waste Management's pricing program has allowed the company to raise prices despite a weak economy. The company has also returned over $7 billion to shareholders over the past five years.
Steiner said his company has consistently raised its dividend and will channel $850 million toward a share repurchase program this year.
"This is one you can own for your 401k," Cramer said. "This is a consistent, no-surprise deliverer of earnings."
Am I Diversified?
Cramer played "Am I Diversified" with callers to see if their portfolios are right for the markets. The first caller's portfolio included
( SGP) and
Cramer blessed this portfolio as diversified, saying it was about as perfect as you can get.
The second caller's portfolio had
as his top holdings.
Cramer was concerned about having both Starbucks and McDonald's in the portfolio and suggested a defensive play to replace one of those two.
In the third portfolio, the caller had
( NHWK) and
Cramer said Clean Energy, Taser and Nighthawk are all speculative plays and recommended a healthcare company, oil company and a defense contractor to round out this portfolio.
Cramer was bullish on
Cramer was bullish on
Energy Conversion Devices
Cramer was bearish on
Bank of America
American International Group
Barnes & Noble
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At the time of publication, Cramer was long XTO Energy, McDonald's and Schering-Plough.
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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