'Mad Money' Recap: The Right Retail Story

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NEW YORK ( TheStreet) -- "There's a lot of nonsense on Wall Street," Jim Cramer told the viewers of his "Mad Money" TV show Thursday.

Case in point: today's retail sales numbers, which were widely reported as painting a "mixed picture" for retailers, he said.

"This wasn't a mixed picture," argued Cramer, "it was a grand slam!" He said that among the 13 retailers he follows closely, all reported numbers that were better, not worse, than expected.

Everything from the high end, like Coach ( COH), to the low end, like Ross Stores ( ROST) were right on the money, said Cramer.

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Yet despite retailers like Target ( TGT) reporting a great number and raising guidance, Cramer said the media instead focused on the word "cautious" to describe the company's outlook.

Why? Because no one on Wall Street admits when they're wrong, said Cramer. There's more accountability in sports, he said, than there is with your money.

Cramer noted that while the pundits debate the merits of the retail numbers, stocks like Target and countless other retailers, are near their 52-week highs. He said that lean inventories this holiday season mean less discounting and higher profits.

Cramer said investors have a choice, they can listen to the media, and miss out, or stick with the facts, and profit.

Used Car Sales Boom

In the Thursday "Sell Block" segment, Cramer discovered that the rental car industry doesn't actually make money form renting cars.

Since the market lows of March 6, the rental car companies have been a one- way ticket to profits, with Avis ( CAR) up a staggering 3000%, Dollar Thrifty Automotive ( DTG) up 3100% and Hertz ( HTZ) bringing up the rear with a gain of 300%.

Why such huge gains? As Cramer discovered, it's because the bulk of rental car company profits come not from renting cars but from selling their cars into the used car market. Cramer said the used car market has been on fire, with the values of used cars actually appreciating with help from declining new car sales, aging rental fleets and Cash For Clunkers, which killed many thousands of vehicles.

Cramer said these trends mean the rental car company with the most cars to sell, wins. In this case, Hertz comes out the winner, with 70% of its fleet being owned by the company versus leased by the manufacturer. The company with the fewest vehicles to sell? Well, that's Dollar Thrifty, said Cramer, and he's said he's staying away from that one.

In the middle is Avis, which he said was another sell.

Cramer reminded viewers that homework always pays off. While the markets assumed the rental car companies were ready to file for Chapter 11 bankruptcy because of the dropoff in travel, the companies instead made money selling their used cars, and taking their stocks from pennies back to respectable levels.

Jobless-Recovery Threat

In the "Executive Decision" segment, Cramer spoke with Dan DiMicco, president and CEO of Nucor ( NUE), to get a better handle on the state of the economic recovery.

Dimicco came out with guns blazing, saying that all of the demand the economy has seen thus far is inventory-related and not job-related. He said those in Washington are not focus on the real crisis, and that's jobs. The threat of a jobless recovery is much more severe than anyone realizes, he said.

Armed with charts of the past five recessions, Dimicco illustrated that with every recession since 1980, the recessions have been getting deeper and the recoveries taking longer to get back to the original employment levels. And with the current crisis, the numbers are off the charts, as the job losses continue to mount, he said.

Dimicco said everyone's top three priorities need to be jobs, jobs and jobs. He said health care and global warming don't hold a candle to the problem of jobs. Dimicco said our country could do itself a great service by cutting off foreign oil and using its own natural gas and oil until alternative energy becomes feasible. This alone would create tens of thousands of jobs and help move us towards the road to recovery, he said.

Cramer commended Dimicco for his efforts to get Washington to focus on jobs. He said he's joining in Dimicco's crusade and hopes viewers do as well, as jobs are not a Democratic or Republican issue but an American issue.

Wells Showdown

In his "Eureka Moment," Cramer weighed in on the analyst showdown over the stock of Wells Fargo ( WFC), a stock which he owns for his charitable trust, Action Alerts PLUS .

At issue is Monday's upgrade of Wells Fargo by Goldman Sachs, with a price target of $35, in contrast to the downgrade Wednesday by UBS, with a $20 target for the stock. Cramer said his eureka moment came when he realized that these two analysts aren't fighting over the stock, but rather what it can earn.

Cramer said UBS sees huge loan losses still on the horizon for Wells Fargo, which means it'll earn less. He said Goldman feels those losses will be contained and Wells Fargo will earn more. Also in question is whether the bank will need to issue more stock to repay its TARP loans, or whether its heavily written down loan portfolio will actually appreciate, giving the company more equity in house.

Cramer said these issues are merely perception problems, fostered by the vague guidance the bank generally gives analysts. He said he's siding with Goldman Sachs, and feels Wells Fargo's loans are worth more than what's on the books, and the banks should be able to capitalize itself without issuing more stock.

Lightning Round

Cramer was bullish on WR Grace ( GRA), Tekelec ( TKLC), CIENA ( CIEN), Brocade Communications ( BRCD) and Wynn Resorts ( WYNN).

He was bearish on AEP Industries ( AEPI) and Las Vegas Sands ( LVS).

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

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For more of Cramer's insights during the Lightning Round, click here .
At the time of publication, Cramer was long Wells Fargo.

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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