Click here for an archive of Cramer's "Mad Money" recaps.


Pumping Airgas

Contrary to popular opinion, air is not free, said Jim Cramer Wednesday on his "Mad Money" TV show, and he wants you to buy industrial, medical and specialty gas company Airgas ( ARG).

Airgas has three things going for it, said Cramer. The company has pricing power, strong end markets and a stock buyback. The combination of these makes Airgas a buy, he said.

Airgas announced price increases in October, said Cramer, so, it's not like that's new news, he said. Also, the buyback is publicly available information. Airgas' stock has responded, said Cramer, but it's not done going up, yet.

"It's not done because nobody's talking about Airgas," said Cramer. Airgas is in a "quiet, odorless, colorless bull market."

So far, Airgas' price increases have allowed it to maintain its margins, said Cramer. But, by the second half of next year, he believes that Airgas will see an expansion of its margins because with the demand for gas relatively inelastic, he wouldn't be surprised to see another price increase put through.

The risks to the story are Airgas' customers could cut production or go out of business, said Cramer. And, Airgas is somewhat debt heavy, he added.

However, the company has sold an ancillary business, a move that shows Cramer that it's trying to shore up its balance sheet.

In response to a question about water plays, Cramer said he has been buying Aqua America ( WTR) for his ActionAlertsPLUS charitable trust.

Cramer likes the water business because many smaller water companies are owned by European entities, he said, and the European entities are selling. That means there are good acquisition candidates for Aqua America.

Commenting on natural gas plays, Cramer said his favorite producer is Chesapeake Energy ( CHK). But, he sees natural gas prices coming down, so he would rather own the buyers of natural gas than the producers.

Filling the Gap

Cramer is bullish on teen retailers Abercrombie & Fitch ( ANF), Pacific Sunwear ( PSUN), Volcom ( VLCM) and Too ( TOO), which are filling the void left by Gap ( GPS).

Gap "just isn't cool anymore," said Cramer, but these teen retailers are.

Cramer said Abercrombie & Fitch only has 850 stores compared with Gap's 3,000 stores. That means there are "still plenty of people who have never shopped in an Abercrombie," he said.

Cramer believes that Abercrombie's store base can double before the brand "starts to become uncool."

What's more, while Abercrombie has "toned down the sex in their advertisements," there have been reports it "won't hire 'ugly' people to work in their stores," he said. "Morally, that's reprehensible.

"But, as a business practice, it makes a lot of sense since teenagers are insecure and aspirational.

"Put simply, Abercrombie makes your kids feel bad about themselves, and that's why they do so well," said Cramer.

Cramer said Abercrombie trades at 18 times next year's earnings, which is "not that expensive when you consider that the business could eventually double."

Cramer likes surf- and skate-inspired retailer Pacific Sunwear with its 1,100 stores and 7% to 10% same-store sales. Cramer believes that the retailer has room to add another 400 stores.

Volcom, said Cramer, is the best of brands sold at Urban Outfitters ( URBN). Volcom has a 51% gross margin and a 25% EBITDA margin, he said. "This is the stuff you can't find at the Gap."

Finally, Cramer likes Too, which today reported 40% year-over-year earnings growth. One "can't argue with that," he said.

Commenting on American Eagle Outfitters ( AEOS), Cramer said inventories at the clothing retailer are too high. American Eagle "just ain't the right play," he said.

Cramer is also worried about Quiksilver ( ZQK), which is "huge" in France, he said. He believes that the riots in France have negatively affected sales, and he would sell the stock.

In response to a question about Skechers ( SKX), Cramer said he could not endorse Skechers because of its "up and down history."

Pricing Power

When a company has pricing power, it can increase earnings simply by increasing prices, said Cramer. For that reason, Cramer is bullish on the Internet and oil drillers.

Most Web sites are sold out of advertising space for the fourth quarter, said Cramer. That means they can raise prices. Cramer likes best-of-breed Internet plays Google ( GOOG) and Yahoo! ( YHOO).

Oil drillers also have pricing power, he said. Saudi Arabia is paying twice the American day rate to lease oil drilling rigs because it's "so desperate" to find oil, said Cramer.

Cramer's favorite driller is Nabors Industries ( NBR). He also likes Patterson-UTI Energy ( PTEN).

Banking on the Bank

Wells Fargo ( WFC) CEO Richard Kovacevich joined Cramer by telephone. Cramer asked Kovacevich why Wells Fargo's share count hadn't changed much over the last several years despite share buybacks.

Kovacevich said that stock issued for acquisitions and employee 401k plans were the reasons.

Cramer asked if Wells Fargo was at risk from interest-only mortgages and other types of higher-risk mortgage loans.

Kovacevich said there were certain types of adjustable-rate mortgages and "exotic" loans that "do have some risk to them." But, "we don't happen to do those," he said.

Cramer asked Kovacevich what he makes of the spike in bond yields Wednesday.

Kovacevich said he believes that "core inflation looks pretty good. ... I think what the bond market is concerned about ... is that the Fed is going to overshoot. I think the Fed should be pausing here."

Cramer summed up the interview by saying that Kovacevich is a "banker's banker" and he believes that Wells Fargo's stock is "dynamite here."

To watch Cramer's interview, click here.

Lightning Round

Bullish

Cramer was bullish on Staples ( SPLS), Cyberonics ( CYBX), Merge Technologies ( MRGE), Broadcom ( BRCM), Altria ( MO), Prudential Financial ( PRU), MetLife ( MET), Vertex Pharmaceuticals ( VRTX), aQuantive ( AQNT), PortalPlayer ( PLAY), Commerce Bancorp ( CBH), Yellow Roadway ( YELL) and Starbucks ( SBUX).

Bearish

Cramer was bearish on General Motors ( GM), Corning ( GLW), Iowa Telecommunications Services ( IWA), Eastman Kodak ( EK), Agere Systems ( AGR), eBay ( EBAY), Elan ( ELN), Fannie Mae ( FNM), Phoenix ( PNX), Ford ( F), Georgia Gulf ( GGC), Marchex ( MCHX), Dick's Sporting Goods ( DKS), NovaStar Financial ( NFI) and Landstar System ( LSTR).

For more of Cramer's insights during the Lightning Round, click here .
At the time of publication, Cramer was long Aqua America, Wells Fargo, Yahoo!, Altria and Commerce Bancorp.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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