The main challenge for many investors is to find stocks that are good investments even though the market has had a big run, Jim Cramer told viewers of his "Mad Money" TV show Thursday. There are not a lot of stocks he can call cheap, Cramer said, but luckily for his viewers, he's found a sale in the supermarket stocks. A few of the supermarket plays deserve to be cheap because some are falling apart and shouldn't go higher anytime soon, he said. But there's one that's cheap and good. "My supermarket of choice is Kroger ( KR)," Cramer said, calling the stock a "serial outperformer." Kroger's earnings per share not only came in 4 cents above average, but the company also raised guidance. This is not what the Street expected, he said. Market players thought the supermarkets were in trouble because of inflation and competition. But inflation is under control, Cramer said. And Wal-Mart's ( WMT) strategy is "failing" because no one wants to shop at a big-box retailer for food, he said. Kroger is going head to head with Supervalu ( SVU) stores, and while Supervalu looks cheaper, it is "a value trap," Cramer said. Supervalu's future value is declining. Meanwhile, Kroger is "firing on all cylinders" with an improved presentation and more upscale products, he said. Plus, the company bought back 3% of its shares outstanding last quarter and it has better than expected margins and they expect them to go higher, Cramer said. "That's not something you want to miss."
Starent in His EyesThis week, Cramer's taking a first look at overlooked initial public offerings. So far in his five-part series, he's suggested people consider buying Dolan Media ( DM), comScore, ( SCOR) and Athenahealth ( ATHN). Before recommending his overlooked IPO for the day, Cramer advised viewers to wait for a pullback when looking at these stocks because a lot of them "have gotten pricey," he said. If the stocks don't come down, don't buy them, he stressed. Moving onto his overlooked IPO pick of the day, Cramer highlighted telco name Starent Networks ( STAR). Starent, he said, is a great story. It has technology that is the backbone for sending photos, watching videos or playing games on your phone, Cramer explained. Some of its biggest clients include Verizon ( VZ), Sprint Nextel ( S) and Vodafone ( VOD). The company came public on June 5 and is up about $10 a share since then, but Cramer believes it could be the next Qualcomm ( QCOM). In a slowing economy where fewer and fewer companies are displaying good growth, Starent has a long-term growth rate of 57%, he said. It has great growth and superior technology, but "the price isn't quite right," Cramer said. Therefore, wait at least a week if not more for a pullback in this stock, he warned. "And if it doesn't come in, take a pass." For people who are really eager to get in, Cramer suggested buying 25 out of 100 shares now and buying the rest on a pullback.