Cramer's 'Mad Money' Recap: Jumping the Gun (Final)

Click here for an archive of Jim Cramer's Mad Money recaps. Click here to get Jim Cramer's Mad Money Post Game video exclusively on TheStreet.com.


Are the markets jumping the gun by buying into the heavy industrial stocks?

Jim Cramer told the viewers of his "Mad Money" TV show, "they are," and "that's not a bad thing!"

Cramer told viewers that almost a year after the fateful collapse of Lehman Brothers, when everything looked as if the world would end, stocks are now poised to "lap" those abysmal earnings. Now faced with the easy compares from last year, it's right for investors to leap, then look, in order to get ahead of the other guys.

Cramer said there is no recovery happening in stocks like Freeport McMoran ( FCX), U.S. Steel ( X) or BHP Billiton ( BHP), but, he said, six months from now things will look brighter for these companies than they do now.

Cramer Clearing House All things Cramer Mad Money Recap Trade With Cramer Free

Similarly, companies like Eaton ( ETN) and Caterpillar ( CAT), also will face easy compares from last year, along with stronger earnings from aggressive cost cutting.

The markets are looking ahead, said Cramer, and things can't be as bad as they are now. He agrees with the buyers of the smokestack stocks and the heavy equipment stocks. Cramer said investors sometimes can't wait for the starting pistol.

Buying on the Secondary

"We want stocks that know how to take advantage of weaker competitors," Cramer told viewers. That's why he recommended the stock of packaging maker Bemis ( BMS), a stock that most investors have probably never heard of.

Cramer explained that Bemis is preparing a secondary offering of 7.5 million shares of stock to buy the food packaging unit of mining giant Rio Tinto ( RTP).

He said the deal will be a windfall for Bemis because Rio Tinto is struggling with its debt load and is being forced to sell non-core assets. This mean Bemis is getting the unit, which includes 23 packaging plants around the globe, for a steal. The deal will be accretive to earnings in 2010.

Cramer said the synergies will be huge for the new Bemis, far more than the company estimates at $65 million. The deal will also make Bemis less cyclical, and thus more attractive to investors. Bemis also touts a 3.6% dividend, which will pay investors to wait for the deal to close, he said.

Cramer said he'd be a buyer of Bemis on the secondary and again if the dividend yield rises above 4%.

Weathering the Recession

After being stumped in last week's Lightning Round, Cramer returned this week with his thoughts on electronics retailer hhgregg ( HGG). Cramer said this was yet another case of his viewers knowing more than he does, and finding a great company.

Cramer said hhgregg has three things going for it. First, the company is benefiting from the demise of rival Circuit City, giving this seventh larger consumer electronics retailer a big boost to help it weather the recession.

Second, he said hhgregg has a great business model, providing high customer service and same-day delivery on many of its items. Third, he said the company's benefiting from the bottom in housing, by offering major appliances and other goods that are increasingly in demand.

At just 14 times earnings, Cramer said hhgregg is a steal, especially with the company's 17.6% long-term growth rate and its national aspirations. Cramer said he'd be a buyer at or below the company's secondary offering price, especially given that the company's large private equity firms are also buying into the offering, instead of cashing out.

Outrage of the Day

Cramer took aim at the federal government and FDIC chairwoman Sheila Bair in particular for not coming to the aid of CIT Group ( CIT) this weekend.

Cramer said he's confused as to why the government drew the line at CIT, and refused to help, while so many entities far worse were saved. He pondered why the government was willing to walk away from the $2.3 billion it's already invested in CIT and why CIT's request from additional guarantees were never granted by Bair at the FDIC.

Cramer said investors and taxpayers deserve an explanation and transparency into the government's thinking. He said that Bair should come clean as to why CIT was left to die, while AIG ( AIG) has been helped time and time again.

Lightning Round

Cramer was bullish on Ford Motor ( F), Murphy Oil ( MUR), Baxter International ( BAX), Village Super Market ( VLGEA), China Unicom ( CHU) and Apple ( AAPL).

He was bearish on Mosaic ( MOS), Safeway ( SWY) and Kroger ( KR).

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

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

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

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.