NEW YORK ( TheStreet) -- "Always own best of breed," Jim Cramer announced to the viewers of his "Mad Money" TV show Thursday, as he reviewed one of his cardinal rules of investing. He said it's always worth it to pay up for the highest quality stock in any given sector. To illustrate his point, Cramer looked at the earnings of three consumer product giants, Kimberly-Clark ( KMB), Colgate-Palmolive ( CL) and Procter & Gamble ( PG), a stock which Cramer owns for his charitable trust,
Bright RoadmapIn the "Executive Decision" segment, Cramer sat down with Sandeep Vij , president and CEO of MIPS Technology ( MIPS), a semiconductor design firm whose shares have risen 218% so far this year. Vij said the technology at MIPS has always been very strong, but the company has moved itself from being a provider of just processors to a provider of solutions for many different applications. He said one major part of his job is meeting with clients and selling them on the company, its technology and its roadmap for the future. One bright spot for the company is Google's ( GOOG) Android cell phone software, which MIPS now has running on its processors. Vij said MIPS has a very power efficient platform on which Android can run. In addition to the huge opportunity in smartphones, Vij said MIPS is also benefitting from the digital home, where it's No. 1 in digital TV processors, as well as No. 1 in set-top boxes, DVD players, digital cameras and WiFi access points. "Most consumers have several MIPS processors in their home right now," said Vij. Cramer called MIPS a great way to play the growth of Android and the mobile Internet tsunami. MIPS trades at 24 times next year's earnings, but Cramer still called the stock inexpensive.
Discount PowerTurning to the retail sector, Cramer sat down with Steve Tanger, CEO of Tanger Factory Outlets ( SKT - Get Report), which currently trading at its 52-week high, with a 3.2% yield to boot. Tanger said his outlet centers give consumers the opportunity to buy items direct from the manufacturer at prices 30% to 50% off traditional retail. He said consumers love the convenience of regional malls, and often go there to hang out, but when they want to buy, they come to the outlets. When asked about his company's fabulous results, Tanger said his tenants have done a fabulous job of cutting costs and bringing down inventory levels. He said Tanger is now ahead of where it was before the recession took hold, and is once again a growth story. When asked about competition from online retail, Tanger said that online sales have their niches, but when it comes to footwear and apparel and anything that comes in sizes or colors, people like to shop in person and try it on. That's why, he said, online apparel sales have a 30% to 50% return rate. Finally, Tanger said that shopping at outlets is not seen as a "trade-down" play any longer. He said that consumers want better prices in good times and the need better prices in tough times, and that's why Tanger has been so successful, with sales up 6.3% this past quarter.