Cramer's 'Mad Money' Recap: Taking Stock (Final)

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NEW YORK ( TheStreet) -- "Sometimes we don't know what's going on in the markets," Jim Cramer told the viewers of his "Mad Money"TV show Tuesday.

"When that happens," he said, "it's time to stop, look, listen and learn." Cramer was doing just that in his live broadcast from the CTIA Wireless conference in Orlando, Fla. to learn about all the latest in the mobile Internet tsunami.

Why focus on tech amidst reports of inventory gluts in tablets, PCs and optical equipment? Cramer said its because in the end, the long-term positives in tech will prevail over the short-term inventory problems. He said mobile technology is changing our lives, and is even helping bring down global dictators, and that's a trend that cannot be stopped for long.

But in the interim, Cramer said investors need to be patient, and scale out of stocks that have become over extended, like tech, and move into stocks whose prices have been depressed artificially.

He said the banks are interesting plays, although they need job growth to truly do well. Cramer said that it's too late to sell stocks like Nike ( NKE), which got pummeled after it's most recent results.

Cramer said he'd be a buyer of Lululemon ( LULU), but would be a seller of Chevron ( CVX) and Marathon Oil ( MRO), which are near their 52-week highs.

He remained bullish on the domestic oil and gas producers however, companies like EOG Resources ( EOG), Continental Resources ( CLR) and Chesapeake Energy ( CHK)

"There's nothing big happening right now," said Cramer, which makes it the perfect time to make these changes.

AT&T Deal Lowdown

In the "Executive Decision" segment, Cramer sat down with Ralph De La Vega, president and CEO of AT&T Mobility, the wireless arm of AT&T ( T), on the heels of the company's $39 billion acquisition of T-Mobile USA, the nation's fourth largest wireless carrier.

De La Vega called the T-Mobile deal a "match made in heaven," citing the two companies' compatible networks and wireless spectrum. He said the synergies that will be achieved exceed that of the purchase price and the merger will relieve some of the bandwidth pressures AT&T has been feeling in major metro areas. De La Vega said the deal brings benefits to both customers and shareholders.

When asked about anti-trust concerns, De La Vega noted that the government usually looks at competition on a local level, and in 18 of the top 20 markets in the U.S., there are currently five or more wireless carriers.

Additionally, companies like Sprint ( S) currently have three times the amount of spectrum per subscriber than AT&T currently has, meaning that Sprint could grow substantially.

When asked about fears of higher prices for customers, De La Vega said that over the past 10 years, prices for cellular services have actually fallen. When customers complain that their bills are going, they're actually seeing the fact that people are using more and more different kinds of services, like mobile broadband, text messaging, etc.

De La Vega said that AT&T is also still committed to investing in its infrastructure, and still has plans to bring high-speed LTE service to 95% of the U.S. population, bringing it with it thousands of new jobs and an extension of our nation's critical infrastructure.

Cramer said he remains a supporter of both AT&T and rival Verizon ( VZ).

Monopoly Concerns

In a second exclusive "Executive Decision" segment, Cramer also sat down with Dan Hesse, CEO of Sprint Nextel ( S), to see what's in store for Sprint, and how it plans to compete against AT&T and Verizon.

Hesse said he was shocked to learn about the AT&T T-Mobile deal, as he didn't think it was possible for the No. 2 player to buy the No. 4 player. "It wasn't even on our radar," he admitted.

Hesse said the issue is that it concentrates a large number of customers with just two companies. He said that in 2005, the "big two," AT&T and Verizon controlled 52% of all subscribers. That number stands at 67% today, and will jump to 79% if the deal is approved.

Another issue that concerns Hesse is the possibility of exclusive, or favorable deals, with equipment makers given AT&T and Verizon's size. He said obtaining hardware has not been an issue thus far, but could become an issue in the future.

Hesse joked that if there is a silver lining in the AT&T T-Mobile deal, it's that given T-Mobile's valuation, Sprint, with considerably more spectrum and better assets, should be worth a whole lot more this week than it was last week.

Turning the focus back to Sprint, Hesse said his company remains focused on simplicity and giving customers a predictable bill with unlimited voice, text and data services.

He said this strategy has led to a lot of recent successes for Sprint, but the company is keeping a close eye on rising usage patterns and is looking for ways to hold onto unlimited services for as long as possible.

Netflix Recommendation

After a month of declines, Cramer said he's once again ready to recommend streaming movie giant Netflix ( NFLX), a stock that's ready to head higher, perhaps even considerably so.

Cramer cited several reasons why Netflix deserves to be higher. First, he said, is valuation. With companies like Facebook being valued at $65 billion and others, like Groupon, expected to come public soon, Netflix, with its 20 million subscribers and very lucrative business model, deserves to be worth twice where it is today.

Second, Cramer said Netflix' so-called competition is more like just a punchline. He said Netflix has become the iPod of the movie space and just cannot be unseated. Cramer said other services have limited offerings, have no infrastructure and cannot scale to compete with Netflix massive size.

Next, Cramer said Netflix is growing like a weed, and has plenty of cash to pay for content and continue its grow for years to come. And finally, Cramer said Netflix would be a ripe acquisition target for the likes of Apple ( AAPL), a stock which he owns for his charitable trust, Action Alerts PLUS, among others.

Put it all together and Cramer said Netflix is once again a buy.

Higher Multiple Warranted

In a third interview, Cramer sat down with Ryan Wuerch, founder and CEO of Motricity ( MOTR), a company that helps enable Internet access on both smartphones as well as feature phones.

Wuerch said he's very enthused about the AT&T T-Mobile hookup because AT&T has been a strong Motricity customer for eight years and the deal could potentially bring 34 million new subscribers to the company's platforms.

Wuerch explained that Motricity helps enable carriers around the world access the Internet on their smartphones. He said the company is also a player in mobile advertising and marketing as well. Motricity is the "front door" that allows phones to access services like Facebook and Twitter all in one place for example, Wuerch said.

But perhaps the biggest driver for Motricity is international growth. Wuerch said the smartphone revolution in the developing world is "just beginning" and the market holds some 2.5 billion mobile users, many of whom use their phones as their primary Internet devices.

Wuerch defended Motricity's decision to stop offering analysts quarterly guidance, saying that he goal is to provide "reasonable" guidance, and that may not always match up to quarterly results. He said Motricity is focused on delivering results, and over the next few years 50% of the company's revenues will be coming from outside the U.S.

Cramer said that Motricity, with its 29% growth rate, should be trading well higher than its current 14 multiple.

Closing Comments

In his "No Huddle Offense" segment, Cramer once again sounded off on America's failed energy policies. He said that America has the ability to achieve energy independence and security if it so chooses, but Washington has turned a blind eye.

Cramer said that last night's interview with Mark Papa, CEO of EOG Resources ( EOG), once again proves that American oil is plentiful and economical, and can make a serious dent in America's 9-million-barrel-a-day oil deficit.

Add in our country's huge natural gas reserves, and Cramer said America could stop all oil imports from OPEC and other dangerous places. He said replacing diesel fuel with natural gas for trucks is all it would take, but instead the Obama White House chooses to focus on ethanol and renewable sources that are simply not viable.

Meanwhile, the U.S. is poised to begin exporting its clean, domestic natural gas to others, while continuing to be held hostage by foreign oil.

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

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At the time of publication, Cramer was long Apple.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 is related to the specific opinions expressed by him on "Mad Money."

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