Cramer's 'Mad Money' Recap: The Commodities Nightmare

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"It's never been harder to buy anything commodity related," Jim Cramer told viewers of his "Mad Money" TV show Tuesday. "And it may not be worth your time, effort or sanity."

Cramer said commodity stocks bear no relation to the actual health of the companies. In effect, companies that are doing well are seeing their stocks slammed in the stock market.

That's because these stocks are completely under the control of large hedge funds, some of whom are much larger than the companies they trade, he said.

With the end of the quarter nearing and fund redemptions on the rise, Cramer said there's a rush to get out of the commodity stocks like he's never seen before. He said the speed and volatility of the decline in some of these stocks is mind-blowing.

Even for a seasoned trader like Cramer, who now trades only for his charitable trust Action Alerts PLUS, the markets have proven to be too difficult. Cramer admitted to buying 100 shares of Foster Wheeler ( FWLT) at $40 a share just two days ago, only to sell them today at $35 a share for a loss.

Cramer still contended that the commodity stocks have fallen far greater than that of their underlying commodities. Foster Wheeler, he noted, has $10 a share in cash, and trades at just 6 times its earnings. Yet even with this incredible valuation, Cramer still asked "why buy these stocks at all?"

Cramer: I Expect FedEx to Deliver

Cramer said until worldwide demand increases, or some of the smaller commodity companies get takeover bids, there will be no end in sight for just how low these companies will trade.

Eating Out

In the wake of the surprise announcement from Fedex ( FDX) that earnings would be 36% better than expected this quarter, Cramer said now is the time to revisit the restaurant stocks.

Stockpickr

As oil prices continue to fall, Cramer expects upside surprises from the largest and strongest restaurant chains such as Darden Restaurants ( DRI).

Cramer's last mention of Darden was a sell recommendation on June 6, 2007. Since then, he said the company has lowered guidance so far that it sets the stage for it to "under-promise" and "over-deliver."

Cramer said Darden has many things playing in its favor, including falling raw costs and cheaper gas prices. With price increases already in place, companies like Darden can only benefit as the raw costs that prompted those increases begin to decline. Likewise, as gas prices continue to fall, more and more consumers should be returning to the restaurant scene.

Cramer applauded Darden for managing of its food costs, which are estimated to rise only 2% this year, despite double-digit increases in many items. He also mentioned the company's 2.6% dividend yield and stock buyback programs as added reasons to own the stock.

Clean, Cheap Gas

Cramer talked with Andrew Littlefair, president and CEO of Clean Energy Fuels ( CLNE), which he feels is amidst a multi-year move as natural gas becomes a serious contender for our country's alternative fuel needs.

Littlefair said Cramer's vision of a nationwide network of Clean Energy fueling stations is not a pipe dream and can come into fruition.

Littlefair reminded viewers that 1 million trucks using natural gas would displace 40% of the diesel fuel used in the U.S. He noted that on average, natural gas saves $1.50 a gallon at the pump and produces 50% less emissions.

Littlefair went on to say that converting to natural gas would be huge for companies such as the privately held Swift Transportation, which buys around 1 million gallons of fuel a day.

Littlefair also remained very optimistic for the passage of a California ballot initiative slated for November that would earmark $3 billion for alternative fuels and put another 25,000 natural gas vehicles on the road. He said that initiative alone will save 1.2 billion gallons of gas and diesel fuel a year.

Cramer and Littlefair both questioned why companies like General Motors ( GM) manufactures 19 models of natural gas vehicles abroad, but none here in the U.S.

Cramer again recommended Clean Energy as his No. 1 speculative natural gas pick.

Am I Diversified?

Cramer talked with callers and reviewed their portfolios. The first caller's portfolio included Arch Coal ( ACI), Almost Family ( AFAM), Costco ( COST), Proctor Gamble ( PG) and Windstream ( WIN).

Cramer called this portfolio "perfection," saying he liked it very much.

The second caller's top holdings included Genentech ( DNA), First Solar ( FSLR), Transocean ( RIG), Skyworks ( SKWS) and General Mills ( GIS).

Cramer call this group of stocks a fantastic portfolio.

BankingMyWay

Sudden Death

Cramer was bullish on FMC Corp ( FMC).

He was bearish on MEMC Electronics ( WFR) and Seaspan Corp ( SSW).

Lightning Round

Cramer was bullish on Research In Motion ( RIMM), Wachovia ( WB), US Bancorp ( USB), Chemical Financial ( CHFC) and TiVo ( TIVO).

He was bearish on Valero Energy ( VLO) and National City ( NCC).P/>Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

Read more of Cramer's Mad Money Lightning Round insights.

For "Mad Money" performance statistics and other links, check out Mad Money stats

At the time of publication, Cramer was not long on any stock.

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."

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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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