RealMoney Radio Recap: Whole Foods in Pieces

Cramer says that it's not too late to sell the organic-foods company. Also, a call for Garmin clarity.
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Halloween may have been a few days ago, but there are a couple of "scary and expensive" stocks out there that have been "clocked," Jim Cramer said on his

"RealMoney" radio show Friday.

The first one is

Whole Foods

(WFMI)

, he said.

"People who own Whole Foods are being killed," Cramer said.

The stock was a favorite for a long time because it had double-digit growth, but this is no longer the case.

The company "just got it wrong," he said. "This is a bad situation and is specific to Whole Foods," not the entire organic-foods industry.

There might be a bounce in Whole Foods on Monday, and people must sell into that bounce, Cramer advised. "It is not too late to sell it."

The other scary stock is

Yahoo!

(YHOO)

, which Cramer owns for his charitable trust,

Action Alerts PLUS, Cramer said.

Although it was a thought that Yahoo! could be taken over, right now at $26, not many companies can afford to buy this company, he said.

"Whole Foods is no good, and the Yahoo! speculation is not right," Cramer said.

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A diverse portfolio can help market players protect themselves from market slides, and the same applies to companies, he said. That is, a company that is diverse in the products it manufactures is more protected against the market compared with one that focuses on a single sector.

For example,

Fortune Brands

(FO)

is a "gigantic play on housing" and thus, should be "getting killed," but it's not because Fortune Brands recently bought a bunch of liquor companies, Cramer said.

"It saved them, and now the stock is going higher," he said. "It's not going to stop here as the company is diversified."

On the other hand,

Ingersoll-Rand

(IR) - Get Report

and

American Standard

(ASD)

are not diversified enough, Cramer said.

Companies need to "wake up" and understand that they can't be levered to a single industry such as housing, he stressed.

A Call for Clarity

One of the best ways to figure out what's going on at a company is by listening to its conference call, Cramer said.

The

Garmin

(GRMN) - Get Report

conference call, however, was "a tough one," he said.

Cramer is cautious about telling people to buy it because not only did the company miss its estimates, but also management failed to address why during the conference call.

While listening, the feeling Cramer got from management was that if people sold Garmin, they would miss out on making money. But there was no recognition that anything was awry, he said.

"I don't want to touch the stock until I figure out what happened here," Cramer said. "It was a real disappointment."

Electronic Arts

(ERTS)

should have been bought by

Viacom

(VIA) - Get Report

because Viacom has to find a way to crack into video games, said Cramer.

But now Electronic Arts is too expensive, and the window for Viacom to buy the company has closed, he said.

A situation where the window has not closed yet, but will soon is the one

Sirius Satellite Radio

(SIRI) - Get Report

has to buy

XM Satellite Radio

(XMSR)

, Cramer said.

"This is the last chance for Sirius' CEO Mel Karmazin and the good people at Sirius to buy XM Radio," he said.

If the acquisition takes place, it will cut out the competition between the two companies, but the window is closing. Cramer said Karmazin should make his move.

Cramer's Callers

Buy more

Staples

(SPLS)

right here because it is going to make people money, Cramer told a caller.

The company's two competitors,

OfficeMax

(OMX)

and

Office Depot

,

(ODP) - Get Report

are more expensive, and that doesn't make sense, he said.

When a caller asked about

JDS Uniphase

(JDSUD)

, Cramer said the company finally did what he wanted it to do, which is a reverse split.

But, the testing and measurement business that the company recently bought "is not doing well," he said. However, as the company was "adamant" that the business is doing well, JDSU has moved higher.

Cramer said that people who own JDSU are OK, and he would own that stock until it goes to $20 and then would sell it. JDSU was recently at $16.36.

"It is OK for a trade," he said.

As

Simpson Manufacturing

(SSD) - Get Report

is a pure housing play, Cramer told his next caller to get out of it.

Watts Water

(WTS) - Get Report

and

Fortune Brands

are the only housing-related companies he said he likes.

"Suddenly everyone has turned on

Intel

(INTC) - Get Report

and is worried about it," Cramer said, responding to another caller.

Cisco

(CSCO) - Get Report

,

Microsoft

(MSFT) - Get Report

,

Oracle

(ORCL) - Get Report

and

Advanced Micro Devices

(AMD) - Get Report

are better tech stocks, he said.

"There are not a lot of reasons to own Intel," he said.

Hewlett-Packard

(HPQ) - Get Report

and

IBM

(IBM) - Get Report

are two other tech stocks Cramer said he likes better then Intel. Cramer owns H-P for his charitable trust,

Action Alerts PLUS,

Concerning

USG

(USG)

, "everyone is freaking out because it is in housing" and not diversified, Cramer told a caller.

But Warren Buffett, an investor Cramer admires, is a big buyer of this stock. Because the stock is "too cheap" and Buffett is buying it, Cramer said he would buy it as well.

Responding to his next caller, Cramer said although

Ford

(F) - Get Report

was "very poorly run," he has a sense of conviction that the company's new CEO Alan Mulally, who turned around

Boeing

(BA) - Get Report

, "will turn around Ford."

He advised the caller to buy half his position now and the other half later.

At the time of publication, Cramer was long Yahoo! and Hewlett-Packard.

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

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