Cramer's 'Mad Money' Recap: March 4

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


In a surprising change of heart, Cramer said President Obama, who he said is responsible for much of the market's recent declines, may have inadvertently set the market on fire Wednesday.

Cramer, a vocal critic of the Obama agenda, said on his "Mad Money" TV show that Obama's plans will crimp interest rate deductions on homes, raise taxes on investors , turns healthcare companies into non-profits, hurt the utility stocks and raise taxes on those responsible for most of the job creation in this country.

Yet despite all of Obama's ill will towards Wall Street, Cramer said the president's recent comments that stocks were attractive given their low P/E ratios has fueled the market.

"Obama's coming to Cramerica," said Cramer, who hoped that the new president is finally learning that you can't separate Main street from Wall Street any longer.

According to Cramer, this rally could last if the market momentum is met with any good corporate news in the coming days. "Obama's started the thundering herd," he said.

Buyback Mistakes

What will go down in history as one of the worst corporate blunders of all time?

Cramer said the answer is big stock buybacks. He singled out three HMOs, Aetna ( AET), Wellpoint ( WLP) and United Healthcare ( UNH), as among the worst offenders.

BankingMyWay

Cramer said there are many ways a company can return value to shareholders, but in recent years companies have chose buybacks over dividends, in increasing numbers. In fact, since 2004, the companies in the S&P500 have spent $1.73 trillion on buybacks, while spending only $907 billion on dividends.

Why single out the HMOs? Cramer said these three companies have spent billions on their buyback programs, but now have absolutely nothing to show for it. The plans did nothing to increase shareholder value, he said, and only artificially inflated earnings per share numbers so insiders could profit.

Since 2006, Aetna spent $5.8 billion buying back its stock, in contrast to one $59 million in dividends, only to find shares now trading at less than half what they paid for it. Cramer said if the company had put that money into dividends, it would now have a 6% yield.

At Wellpoint, the company spent $14 billion on buybacks, with no money towards dividends. That company would have a 4.7% yield if it did, said Cramer. At United Healthcare, shares have fallen 71% since it spent $11.6 billion buying back it's stock.

Cramer said it's ridiculous that these companies have been wasting money instead of returning it to their shareholders.

Obama-Resistant

Cramer talked with Tom Farrell, chairman, president and CEO of Dominion Resources ( D), to learn how this utility is facing the changing economic and political times.

Farrell announced that Dominion's directors and officers just purchased 75,000 shares of the company's stock because they feel the shares are under valued.

Regarding Obama's cap-and-trade initiatives, Farrell said Dominion should fare well, as the company is already in the bottom third of utilities when it comes to carbon intensity. He said the company is looking into expanding its natural gas, bio mass and nuclear fleets. "Dominion is a lot more than just a utility," said Farrell.

When asked about the credit crisis, Farrell said the company has a strong credit rating and has never had difficultly getting credit. Admittedly, he said, Dominion is paying more for credit, but the company has successfully issued $1 billion in new debt throughout the crisis.

Finally, Cramer asked Farrell about Dominion's clean energy philosophy. Farrell said the company has a number of pilot programs in place, including subsidizing 2 million compact fluorescent light bulbs and developing smart meter technologies.

Cramer called dominion an Obama resistant utility and said if Farrell is buying shares, he's buying too.

Hanging Tough

With a war brewing between President Obama and the coal stocks, Cramer welcomed Joy Global ( JOYG) president and CEO Mike Sutherlin to the show to discuss the outlook for coal in a new cap-and-trade world.

Sutherlin remained upbeat about Joy Global's outlook, noting that while the company's top line growth is slowing, Joy Global is increasingly focusing on efficiency and improving the bottom line.

One bright spot for Joy Global has been China, which he said is serious about its stimulus plan and about getting their economy back on track quickly. Sutherlin said they're seeing some good early signs of recovery in China. The company is ramping up a new factory in China.

When asked about recent order cancellations, Sutherlin confirmed that he did indeed let a few customers out of their contracts, but he called the move "good, long-term relationship building." He said many of those orders are not lost forever, but rather just delayed until the economy recovers.

When asked about the overall outlook for coal given Obama's cap-and-trade initiatives, Sutherlin said he takes solace in the fact that 80% of new coal plants will be built outside of the U.S. in coming years. He said the world needs reliable energy until renewable energy becomes mainstream, and coal is the best fuel to bridge that gap.

Cramer gave a thumbs up to Joy Global for being resilient in tough times.

Lightning Round

Cramer was bullish on Bucyrus International ( BUCY), Home Depot ( HD), Sears Holding ( SHLD), CBRL Group ( CBRL)and Caterpillar ( CAT).

He was bearish on CONSOL Energy ( CNX)and Lowes ( LOW).

Check out the latest edition of "Cramer's Take onTop-Searched Stocks" on Stockpickr.

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 long Caterpillar.

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.

More from Jim Cramer

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Video: You Could Live in a Ritz-Carlton or St. Regis Home

Video: You Could Live in a Ritz-Carlton or St. Regis Home