NEW YORK ( TheStreet) -- "Don't sell the best assets out there just because some of the worst assets are heading lower," Jim Cramer told the viewers of his "Mad Money" TV show Thursday as he urged investors to not sell their stocks on fears of a U.S. debt downgrade. Cramer said such a downgrade won't be Armageddon for stocks, and the missed opportunities might be a whole lot more painful. According to Cramer, a U.S. debt downgrade will cause investors to sell U.S. bonds and thereby raise interest rates, and it will likely send the U.S. dollar lower. He said it will also wreak havoc on the bank stocks, which are already the worst performing sector. But beyond that, he said, stocks will largely be unaffected. He said it "doesn't make sense to sell stocks of companies that have great balance sheets just because our government has a terrible one." Cramer said selling stocks like Google ( GOOG) would have cost investors 50 points today as the Internet search giant reported stellar earnings. Selling stocks like Sanofi-Aventis ( SNY) , a stock which Cramer owns for his charitable trust,
Conoco's Golden Opportunity"Sometimes breaking up is good for business," Cramer told viewers as he dove deeper into Conoco Phillips' announcement that it's spinning off its refining operations and holding onto its lucrative oil and gas exploration and production operations. After popping up $7 a share, Conoco gave back most of its gains as the market tanked, but Cramer said that created a golden opportunity. Cramer said shares of Conoco should have gone up much more today. He said the company trades at just nine times earnings, yet its parts are worth upwards of $100 a share, 25% more than they're worth today. Conoco, as it stands now, he said, is just too big and complicated to bring out its true value. Cramer gave himself a pat on the back, as he recommended that Conoco make just such a move back in January. Since then, share are up a modest 10%, but Cramer said Conoco will likely follow the path of Marathon Oil ( MRO), which saw a 21% pop off the news of the breakup and a 42% gain over the next few months. As for others in the industry that might follow the same path as Conoco and Marathon, Cramer said the pickings are slim. He said Hess ( HES), another Action Alerts PLUS name, is too well run and isn't worth more on a breakup. He said the same applies to Chevron ( CVX), where the parts are only worth about $130 a share, just slightly higher than were they trade now. Cramer told investors they need to use today's weakness as an entry point for Conoco and get in while the getting is good.
Playing Dunkin' Donuts IPOIn the "Know Your IPO" segment, Cramer featured the upcoming IPO of Dunkin' Donuts, which will soon be trading under the ticker DNKN. Cramer said that Dunkin' is the most attractive of the coffee stocks and investors don't want to miss this compelling IPO. Cramer said the Dunkin' story is all about the power of its brand. The company operated over 9800 Dunkin' Donuts locations along with an additional 6400 Baskin-Robbins ice cream shops. The company is 100% franchised, which means it doesn't need to raise capital to open more stores and 90% of the company's new stores are opened by existing franchisees. Dunkin' also has some of the most loyal customers on the planet, said Cramer, noting that nearly 60% of Dunkin' sales now stem from coffee. Dunkin has clearly won the breakfast wars, he said. As for the IPO itself, Dunkin'plans on offering 22.3 million shares between $16 and $18 a share. Cramer said that pricing values the company at 20 times earnings. Rival Starbucks ( SBUX) trades at 22 times earnings, but unlike Starbucks, Dunkin' has been able to double its same store sales over the past two quarters. Cramer said he also likes the fact that none of the company's three private equity firms are selling out on the IPO. Cramer said Dunkin' is a buy on the IPO, but he would not be a buyer in the open market. He said shares are worth up to $20 a share, after which he'd be a seller. If the IPO prices above $20, he said he'd take a pass.
Mad MailCramer told a viewer that he hates technology stocks at the moment, which is why he cannot recommend ON Semiconductor ( ONNN), as all of the semiconductor stocks trade in tandem. Cramer told another viewer that GNC Holdings ( GNC) is still inexpensive and he'd be a buyer of the stock into the mid-20s. He has also bullish on BP Prudhoe Bay ( BPT) a stock which he said was perfect for an IRA or 401K and one that should do well now that oil prices are stabilizing. Finally, Cramer gave the nod to Core Labs ( CLB), a stock he said should be bought on any weakness.
Lightning RoundCramer was bullish on Imax ( IMAX), CVR Partners ( UAN), Potash ( POT), Ares Capital ( ARCC), Annaly Capital ( NLY), Lululemon Athletica ( LULU), Phillips-Van Heusen ( PVH), Lowes ( LOW), Agrium ( AGU), SPDR Gold Shares ( GLD), Public Service Enterprise ( PEG) and Southern Company ( SO). He was bearish on Lumber Liquidators ( LL), Motorola Mobility ( MMI), Mosaic ( MOS) and North American Palladium ( PAL).
Closing CommentsIn his "No Huddle Offense" segment, Cramer said that now is not the time to buy into the bank stocks. He said the solid quarter from JPMorgan Chase ( JPM) will be the exception, not the rule, as JPMorgan is the envy of the industry. The bar is simply set too high for the other banks, and most other banks are well behind Morgan on their litigation risk and loan losses, he said. The banks are still hated by Wall Street and Washington alike, said Cramer, who advised investors to have as little exposure to the bank stocks as possible. --Written by Scott Rutt in Washington, D.C. To contact the writer of this article, click here: Scott Rutt. To follow the writer on Twitter, go to http://twitter.com/scottrutt. To submit a news tip, send an email to: firstname.lastname@example.org. 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,
click here .