Cramer's 'Mad Money' Recap: Bullish on Bank of America (Final)

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NEW YORK ( TheStreet) -- "If you're bullish on America, you should be bullish on Bank of America," Jim Cramer told the viewers of his "Mad Money"TV show Thursday, as he outlined 10 reasons why investors should no longer be scared of this once loathed and reviled bank.

Cramer said while the media still loves to attack Bank of America ( BAC), a stock which he owns for his charitable trust, Action Alerts PLUS, the fact is that the company is in much better shape than it was two years ago. Here are the reasons why.

1. The technicals indicate future upside. Cramer said while the pundits argue the merits of Bank of America's recent $12 to $14 a share move, he's looking at the bigger picture, where the once $54 stock has a lot of room to grow.

2. It doesn't need to raise money. Cramer said the fundamentals at Bank of America are sound, and the company doesn't need to raise additional capital to survive or flourish.

3. Dividend boosts are likely. Cramer recalled that Bank of America used to pay a bountiful dividend, and those dividends will likely be reinstated soon.

4. It's gained market share in mortgages. With Bank of America's Countrywide acquisition, it now controls 20% of the U.S. mortgage market.

5. A housing recovery opens doors for profits. Cramer said Back of America owns more homes than anyone, so an uptick in home buying and home prices will be huge for the company, especially as a housing shortage is likely in 2012.

6. Ben Bernanke is watching. Cramer said the Federal Reserve chairman is still looking after the banks, giving them all the help they need.

7. Individual investors are buying stocks. Cramer said as more and move investors return to the markets, Bank of America's Merrill Lynch arm will continue to grow.

8. Job creation is key for better credit. Cramer said as unemployment improves, so will consumer credit and the ability to buy homes.

9. Change has come to Washington. With financial regulations over, there is finally clarity and certainty for the banks.

10. Mortgage put-back exposure is no longer a risk. Cramer said with Bank of America resolving issues regarding Fannie Mae ( FNM) and Freddie Mac ( FRE), a huge weight has been lifted.

Analyst Power

While investors can't predict when an analyst is going to recommend a stock, Cramer said as a group, analysts can be very predictable. He said it's common practice for firms to initiate coverage with a buy on companies they bring public, after the initial quiet period has ended.

Consider General Motors ( GM), which is up 12% since multiple analysts initiated coverage between Dec. 28 and Jan. 3, 30 days after its IPO. Cramer said if a huge deal like GM can move 12%, imagine what smaller deals are capable of.

That's partially why Cramer recommended First Republic Bank ( FRC), a stock that came public to little fanfare on Dec. 8. He said this "rich-man's bank," which caters only to high income households in San Francisco, went public at $25.50 a share and has done little since. But that may change, he said, as the analysts gear up for their initial assessments.

Even without the analyst bump, Cramer said he still likes First Republic. He said the bank is a conservative lender that's had the same management team over the past three years. The bank had few loan losses and has been taking market share amongst its high net worth clientele.

Trading at two times book value, Cramer said First Republic might seem expensive, but compared to other banks in its niche, like Bank of New York ( BK) and State Street ( STT), First Republic is actually trading at a discount.

Cramer said he wouldn't chase shares of First Republic. If the stock runs higher on upgrades before getting in, he'd take a pass.

Amazon's White Christmas

"If you think this year's white Christmas was too white, buy some Amazon," Cramer told viewers, as he re-recommended Amazon.com ( AMZN), a member of his FADS CAN growth stock portfolio.

Cramer said that the inclement weather in some parts of the U.S. leading up to the holidays are clearing hurting the earnings of brick and mortar retailers, like Kohl's ( KSS) and Target ( TGT), but should be a boon for the online-only Amazon.

"Where did all those lost retail sales go," asked Cramer? He's betting online and into gift cards, which will likely be redeemed this quarter. Shares of Amazon are up 40% since Cramer recommended it on Nov. 23, 2009, and he's betting it will head still higher.

Amazon has a 26% long-term growth rate, a low cost of inventory, huge international opportunities and practically invented the eBook category with its Kindle reader.

Sell Block

In the Thursday "Sell Block" segment, Cramer reminded viewers that accounting irregularities always equals sell. He ammended this rule to say that investors must wait at least two quarters before buying back in.

Cramer recounted how on Sept. 30, 2010, he advised viewers to sell Green Mountain Coffee Roasters ( GMCR), makers of the Keurig one-cup coffee maker, after it announced an SEC investigation into its revenue recognition practices.

After being up 47% from an earlier recommendation, shares of Green Mountain fell from $31.80 a share to the mid $20's. On Nov. 18, the company restated its earnings and shares soared, only to tank again after it reported a disappointing quarter.

"Why own a stock that's plagued with issues when there are thousands of others that aren't?" he asked. He said accounting issues can take a year or more to work out, and until then, investors simply cannot know the extent of the issues. The risk-reward, said Cramer, is simply too high.

Lightning Round

Cramer was bullish on Ariba ( ARBA), Salesforce.com ( CRM), Esterline Technologies ( ESL), Boeing ( BA), Darden Restaurants ( DRI), Sysco ( SYY), Newfield Exploration ( NFX)and Chesapeake Energy ( CHK).

There were no bearish calls.

Closing Comments

In his "No Huddle Offense" segment, Cramer opined on Piper Jaffray's "upgrade" of Chipotle Mexican Grill ( CMG), a stock Cramer has repeatedly recommended.

Cramer called the analyst's change from "hold" to "buy" and boost in price target from $133 a share to $265 almost comical. He noted the analysts' reasons for the upgrade, including the company's unique culture and strong balance sheet, are nothing new and have been in place for awhile.

Cramer said what's really at play was an analyst who missed the move taking advantage of the stock's recent 40-point slide to make things right. He said when high-growth stocks get hammered, investors can always count on the analysts to come through with compelling "research" that they probably already know.

--Written by Scott Rutt in Washington, D.C.

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At the time of publication, Cramer was long Bank of America.

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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