As money goes into defensive stocks, the waste bin is filling up with some pretty good cyclicals, Jim Cramer said on his
"RealMoney" radio show Wednesday.
For example, on Tuesday, when Canadian distributor
came out and said how well business is going for parent company
, nobody cared, and Caterpillar went down, he said.
, a stock Cramer owns for his charitable trust,
Action Alerts PLUS, announced less than 10 days ago that it was going to buy back stock and raise its dividend. Consequently, the stock went up $1, and then stopped because, again, nobody cares, Cramer said.
, which has little exposure to the U.S., has gone down, he said. United Technologies is another company which Cramer owns for his charitable trust.
The lesson here is that if you are looking at the game short term, then defensive stocks, such as
, are the place to look, Cramer said.
These are the stocks that work right after a tightening.
"You've got to sell companies that have exposure to the economy, and you have to go into cereals, soaps and soups," he said. "Don't fight this trend for the next three months."
Six months from now, cyclicals will do better than the defensive stocks, he added.
Wellness at Philips
In an "eHarmony matchmaking" bit, Cramer says that he sees a pairing up between
within the next year.
You are going to make money in Varian either through a takeover or earnings, he said.
On the strength of its anticancer machines and X-ray machines, Cramer believes that Varian is going to get a bid.
Philips is moving aggressively into the medical-imaging and wellness business by acquiring companies in this space, Cramer said. He believes that Philips might have to pay $60 a share to buy Varian and then spin off Varian's security and screening division.
"They could sell it to
," he said.
Cramer, who reminded viewers that they cannot speculate a takeover if the company's fundamentals are not good, said that Varian's are great.
"Keep it on your radar screen," he said. "I believe Varian's the next big one."
In light of
recently shut-down pipeline, Cramer said that now there are 16 miles worth of steel that the company needs to replace. He wondered who would get that contract.
Although no one knows for sure, Cramer said his pick would be
The steel stocks got annihilated on Tuesday because people believe we are headed into a recession and are thus dumping cyclical stocks, Cramer said. But he believes that the pause in rate hikes means a recession will be averted and has created an opportunity to buy steel instead of selling it.
Brick by Brick
( RMIX) is directly related to housing, and therefore not doing well, Cramer told a caller.
There was a devastating press release from
this morning that stated there is far too much inventory, he said.
"We don't need to build as many houses in this country, Cramer said, adding that "concrete is going to go lower."
is "a multifaceted conglomerate that is growing at 12% with a management that is heavily devoted to making you money," Cramer told another caller, adding that he can see
buying the company in a heartbeat.
"It's a keeper," he said.
is a company Cramer said he wishes he had not sold.
GameStop, the single biggest place to buy PlayStation, Nintendo and Xbox, should be bought on any pullback, he said, adding that he likes it now at $44.
When a caller inquired about
, Cramer called it the "great speculative play in this market."
The nonspeculative play is to go buy
, but Yamana is more of a secretive story, said Cramer.
Right now at $10, Yamana is a buy.
Cramer advised a caller to get out of
( FDG) and get into
When a caller asked about
, a stock he owns for his charitable trust,
Action Alerts PLUS, Cramer recommended double downing here.
He believes that UnitedHealth will be vindicated on its options backdating scandal and said that now is an opportunity to get into it.
"UnitedHealth is going to $60 a share," he said.
Although an analyst downgraded
, Cramer told a caller he heard a lot of good statements from the company Wednesday and would stay in the game.
He said that people don't consider
a serious company because it trades at $2 a share, but he suggested that a caller go buy some.
Cramer told another caller to hold
, predicting that it will go to $30 before it starts moving down; and he told a separate caller that because there is a gigantic rig shortage, the play in the sector is
National Oilwell Varco
Bancolombia was recently at $28.67.
At the time of publication, Cramer was long Ingersoll-Rand, United Health and United Technologies.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
Action Alerts PLUS. Listen to Cramer's RealMoney Radio show on your computer; just click
here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click
here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click
here to get his second book, "You Got Screwed!" and click
here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by
TheStreet.com has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from TheStreet.com.