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Jim Cramer celebrated retail turnarounds on his "Mad Money" TV show Wednesday, recommending Saks ( SKS).

He said finding a retail revival is like finding a diamond in the rough.

Analysts have been wasting their time recommending Wal-Mart ( WMT) when they should have been looking at Saks, Cramer said.

"I've done the impossible: I dug up two legitimate retail turnaround stories," he said.

Saks, the first turnaround Cramer mentioned, is a stock that has the "ultimate aspirational brand," he said. "It's a store with an aura that gets people to spend."

He believes that Saks is a turnaround because of two reasons. The first is because it has good earnings; second, it's an "asset takeout story."

While Wal-Mart just looks like a big warehouse, Saks has the secret ingredient: merchandising. "Merchandising is about perception -- not about statistics. The analysts don't get it," Cramer said.

Saks, on the other hand, has margin expansion and growth. Although its turnaround is still at its infancy, this is the prefect time to buy Saks, said Cramer.

Last year Saks made its shareholders money with its special dividends. Cramer believes that this year the company will make people money with a turnaround.

PetSmart's Paw Up

The second turnaround company Cramer named was PetSmart ( PETM), the largest pet store in America.

People have affection for their pets in America, said Cramer, but this isn't the only reason he wants investors to buy the stock. PetSmart has "great fundamentals," with a 17.5% long-term growth rate.

Its turnaround is similar to Saks in that it has expanding margins and a merchandising edge. Additionally, Cramer believes the stock is undervalued.

Also, because Petco, its main competitor, was recently bought out by a private-equity firm, PetSmart is "primed to expand" without competition from Petco.

Am I Diversified?

In his "Am I Diversified?" segment, Cramer's first caller owned the following five stocks: Altria ( MO), which Cramer owns for his charitable trust, Action Alerts PLUS, Boeing ( BA), Google ( GOOG), Time Warner ( TWX) and Tupperware ( TUP).

Cramer told the caller his portfolio was beautifully diversified.

His second caller named the following five stocks: FedEx ( FDX), Walgreen ( WAG), IBM ( IBM), United Technologies ( UTX) and Praxair ( PX ).

Cramer called the caller's portfolio "perfect."

His final caller owned the following five stocks: AK Steel ( AKS), Sonic ( SONC), Sears Holdings ( SHLD), which Cramer owns for his charitable trust, Yamana Gold ( AUY) and Allis Chalmers ( ALY).

Cramer blessed this portfolio as diversified as well.

Mad Mail

In his "Mad Mail" segment, Cramer recommended that a viewer buy AT&T ( T) and gave the stock two thumbs up.

Responding to another mailer, Cramer called Halliburton ( HAL), which he owns for his charitable trust, Action Alerts PLUS, his most "painful" stock. He said that he doesn't expect Halliburton to do anything good this quarter but that next year this time it will be higher or will be taken over.

In his "Sudden Death" round, Cramer was bullish on Monsanto ( MON) and Lowe's ( LOW).

He was bearish on H&R Block ( HRB) and Home Depot ( HD).

Lightning Round

Cramer was bullish on eBay ( EBAY), Boeing ( BA), Boston Scientific ( BSX), Google ( GOOG), Blockbuster ( BBI), Rite Aid ( RAD), Crown Castle ( CCI), Advanced Micro Devices ( AMD), Allegheny Technologies ( ATI), Cisco ( CSCO), Lundin Mining ( LMC), Allergan ( AGN) and Hewlett-Packard ( HPQ).

Cramer was bearish on Sirenza Microdevices ( SMDI), Brocade ( BRC), Citigroup ( C) and Anadigics ( ANAD).

For more of Cramer's insights during the Lightning Round, click here .


Want more Cramer? Check out Jim's rules and commandments for investing from his popular book by clicking here.

At the time of publication, Cramer was long Altria, Sears Holdings, Hewlett-Packard and Halliburton.

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. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. 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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