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The game plan for next week is getting into stocks that have reached their 52-week high as the market edges closer toward the end of the quarter, Jim Cramer told viewers of his "Mad Money" TV show Friday.
Three companies that Cramer advised getting into are
Right now, these are the stocks that should get marked up at the end of the quarter, he said. They are the winners. After all, every mutual fund and investor wants to get into the top-performing companies as we reach the end of the quarter, Cramer said.
However, Cramer wants market players to take the safe route and buy half their positions before the
meets and to buy the other half after its meeting next Thursday.
The first company that Cramer believes is near or at its 52-week high and will be marked up is J.C. Penney, he said. This company is a little off its high, he said, calling it the most consistent retailer in country.
The company, which has high-range and midrange products, reported an 11% increase in May same-store sales.
The second stock on the high list is
, a private-education lending business, Cramer said.
First Marblehead has seen huge growth and has an ideal business model, Cramer said. In addition, the stock has more than 10 million shares that are held short, which is more than a 30% short position in this company.
"When you have a short position that high, it's almost inevitable that you'll see a squeeze that pushes the stock higher, especially when the stock has great momentum," Cramer said.
The store recently signed a three-year agreement with
to market private student-loan services.
The third stock Cramer recommended was
. This company manufactures global positioning system (GPS) technology, and it keeps winning, Cramer said, adding that it had the single best quarter of any company he follows.
( PALM) and
Research In Motion
( RIMM) are set to report their numbers on Thursday after the close, Cramer said.
Because this is the same day as the Fed meeting, Cramer wants to make sure the results don't get lost in the shuffle.
He recommended both as trades off the weakness of the market earlier this week and believes that the Fed meeting will precipitate a rise in stocks.
Value and Growth
There are only three kinds of stocks that are worth owning, Cramer said. They are high-growth stocks, consistent-growth stocks and value stocks, he said.
Too many people don't have a method when investing in stocks, but when people buy a stock Cramer believes that they should know precisely what they want out of it: high growth, consistent growth or value.
Cramer advised picking one of the groups or investing a little in each of the three groups. However, only pick the best-of-breed, not the second best, he emphasized.
For people who like high-growth stocks, he recommended
The company has consistent high growth, and Cramer likes it better than
Even when the country was going through a protein phase that shunned carbohydrates, the company reacted by coming out with great salads, he said.
For consistent growth, Cramer recommended
It even received an upgrade from
because of consistent growth potential. Cramer believes that share buybacks and dividend increases are in the cards for General Mills.
A great value stock is construction-services company
, Cramer said.
When people look for a value stock, they should look for big discrepancies between the company's assets and its valuations, and its growth and its valuations, Cramer said.
Walter Industries has both.
In addition, it is the parent company of
, which recently went public, Cramer said.
Walter Industries also has a homebuilder that built 760 homes last quarter, he said, adding that value is when you have a subsidiary that is almost as valuable as the parent company.
The Next Big Acquisition
Oil and gas producer
acquired two smaller competitors
for $21 billion, Cramer said.
After, Kerr-McGee started selling at a huge premium, Cramer said, adding that he believes that the next big acquisition in this sector will include
Devon Energy is the best-run domestic oil and gas play out there and is selling below the value of its assets, he said.
It has 7% growth and is selling at seven times earnings. In addition, the stock is down 14 straight points from its high, and it is a few points away from its low, Cramer said.
Cramer also believes that Devon is one of the hardest-hit stocks because it has a lot of natural gas exposure, and people think short-term when they think about natural gas, he said.
However, all it could take is one bad hurricane or winter to bring the price of natural gas up.
"Every time natural gas takes a hit, think of it as an opportunity," Cramer said. "Because in the long-term, there is not enough of this stuff out there, and it needs to be bought hand over fist."
( RDS-B) are two big players in the oil and gas arena that Cramer believes need to make some acquisitions because of their maturing oil fields, he said.
Devon Energy is super cheap for a bad reason, Cramer said, adding that he wants people to take a look at the stock and buy it.
Knight Capital Group
CEO and chairman Thomas Joyce onto the show and asked him how May was for his company's business.
May was a continuation of the earlier part of the year, but it changed after Bernanke's speech a couple of weeks ago, Joyce said.
The good thing about the company's hedge fund business is that it gets its results reported about every three weeks, he said, adding that things are going well there, and Knight is outperforming.
As far as the company's global equity market business is concerned, Joyce said that Knight is still a cyclical company of sorts and is volume-sensitive. But he said he feels really good about the company and way things are going.
The biggest change from when Joyce came to the company and now, in addition to changes in the company's financial results, is that the culture has changed, Joyce said.
Now the culture is focused on the company's clients.
To view Cramer's interview with Joyce, click here.
Cramer was bullish on
Volt Information Sciences
Basic Energy Services
Cramer was bearish on
Sirius Satellite Radio
Casey's General Stores
Chicago Bridge & Iron
Teva Pharmaceutical Industries
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 Foster Wheeler, Schering-Plough, ABB and Newell Rubbermaid.
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