Cramer's 'Mad Money' Recap: Next Week's Game Plan (Final)

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NEW YORK ( TheStreet) -- "Next week is a huge week for earnings," Cramer told the viewers of his "Mad Money" TV show Friday.

He told investors to "stop, look and listen," to the earnings calls of a few key companies to get a read on several key sectors.

In the financial space, Cramer said Citigroup ( C) will set the tone on Tuesday for the litany of other banks stocks that report next week. Keep an eye on the net interest margins, he said, as well as any mention of a return of Citigroup's dividend thanks to its declining loan losses.

Cramer said Apple ( AAPL), a stock which he owns for his charitable trust, Action Alerts PLUS, will set the bar for the technology group when it reports on Tuesday. He said this stock has delivered a 268% gain since he got behind it in 2009, but he's still looking for $6 a share in earnings this quarter and $23 a share for fiscal 2011.

Also in the tech space, Cramer said he'll be watching Google ( GOOG), which he said is still cheap based on its earnings. Rather than pay the full $624 a share, Cramer recommended looking into the Feb 595 call options, which will deliver the upside potential in Google while limiting the downside.

Cramer said he'll also be watching Parker Hannifin ( PH) to see if the industrial sector has run too much and Schlumberger ( SLB) for the latest read on the oil services group.

Wasting Asset

"Sometimes a huge yield can be a big red flag," Cramer warned investors as he explored Vector Group ( VGR), a little known tobacco player, and weighed it again the industry leader, Altria ( MO).

Cramer said Vector's juicy 9.3% dividend yield make look attractive, but when compared to Altria, it's anything but. Cramer called Vector a wasting asset, one that's gradually losing value over time. He said in a market of declining cigarette volumes, only the strong will survive as it becomes tougher and tougher to stay viable.

While Altria commands over 50% market share in cigarettes, Vector has a scant 2.7%. But Altria also has a 50% share in smokeless tobacco as well as a thriving business in cigars and a stake in SABmiller brewing, the world's second largest brewer. Vector saw its operating income decline 28% last quarter, while Altria saw a gain of 5.6% thanks in part to a 94% gain in its smokeless tobacco products.

Then there's the dividend. Cramer said Vector is the clear winner at 9.3% versus Altria's 6.3% yield, but Altria, unlike Vector, has a consistent track record of raising its dividend. Vector, on the other hand, now pays out 40 cents a share, while it only earned 14 cents a share in earnings. Cramer said paying out more than double what you make is clearly not sustainable.

Cramer said with shares of Vector already off 13%, any potential gains from the company's high dividend have already been offset, which is why he views the company as a wasting asset.

Citigroup's Crucial Test

With Citigroup reporting earnings on Tuesday, Cramer said the bank needs to deliver on four key points, or it will likely sell off as it has after so many other recent earnings releases.

First, Cramer said the bank must deliver profits over the eight cents a share Wall Street is expecting. Second, Citi must continue its overseas expansion, slowly transforming itself into an emerging growth play and away from simply a domestic bank. Third, Citi should announce something "feel good," like a reverse stock split. And finally, he needs to hear that the selling off of bad loans is continuing.

Cramer said if Citigroup can deliver on all four points, then its next stop will be $6 a share, on its way to Cramer's target of $12 a share by the end of 2012. He said Citigroup is at a crucial point having just passed $5 a share, since most institutional investors won't consider stocks under $5. Cramer said if Citi can hold onto $5 a share, then it will mean good things for his speculative stock of the year for 2011.

Mad Mail

Cramer told a viewer that he still likes telecom, but Verizon ( VZ) and CenturyTel ( CTL) may be a little too high right now.

When asked by another viewer about Sprint ( S), Cramer said he looks for safety and yield in his telco stocks and Sprint has neither, which makes it speculative. Cramer said he'd rather be in AT&T ( T) which may be boring, but is reliable.

Finally, when asked about Cypress Semiconductor ( CY), Cramer said this stock is up nine straight points and he needs to see a pullback before he can recommend it.

Lightning Round

Cramer was bullish on Winnebago Industries ( WGO), Vishay Intertechnology ( VSH), Weyerhaeuser ( WY)and MEMC Electronics ( WFR).

He was bearish on Abbott Laboratories ( ABT).

Closing Comments

In his "No Huddle Offense" segment, Cramer had positive words to say about Ford's ( F) CEO Alan Mullaly and Jamie Dimon, CEO of JPMorgan Chase's ( JPM), an Action Alerts PLUS stock.

Cramer said during a time when Washington and the public are critical of all CEOs, Mullaly and Dimon are trusted, respected members of their communities. He said these men are a calm, cool inspiration to us all and he applauds their efforts in returning two American companies to greatness during one of our most challenging times.

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

To contact the writer of this article, click here: Scott Rutt.

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

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, clickhere .

At the time of publication, Cramer was long Apple, JPMorgan.

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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