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

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NEW YORK ( TheStreet) --"Europe's leaders actually did something worth while this week," Jim Cramer told his "Mad Money" TV show viewers on Friday.

He said with the positive news out of Europe, he's keeping his threat level assessment at DEFCON 3 as he prepares for next week's trading.

Cramer said that on Monday he'll be watching the IPOs of Michael Kors and social gaming network Zynga. He said both should be bought, but only on the IPO and not in the open market. After they debut, they should be sold. Cramer said that Zynga may even be strong enough to lift rival Electronic Arts ( ERTS).

For Tuesday, Cramer said the Federal Reserve meeting will have his attention, as will the outlook from General Electric ( GE), which now yields 4%. He said that Best Buy ( BBY) also reports, but that stock remains in secular decline and should not be bought.

Then on Wednesday, Cramer recommended both Broadcom ( BRCM) and Avnet ( AVT), two stocks with low expectations that should have bottomed.

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Thursday brings a slew of news from market mover FedEx ( FDX), along with Pier 1 Imports ( PIR), Accenture ( ACN), Honeywell ( HON), Research In Motion ( RIMM) and Adobe ( ADBE). Cramer was bullish on Pier 1, Accenture and Honeywell, but said that it's too early for new products from Adobe to matter and Research In Motion remains a weak hold at best.

Finally for Friday, Cramer said Darden Restaurants ( DRI) reports, and while the company has a great dividend yield, management appears to have lost its way and needs to outline a serious turnaround plan.

Financial Fears Ease

"Today's European summit did accomplish something good," Cramer told viewers as he opined on today's Euro-news. He said that what the markets have been fearing most -- a Lehman-esque banking collapse in one of the European nations -- has finally been taken off the table, at least for now.

Cramer said that while today's news doesn't bring any new buyers into the sovereignn debt market, it does limit the selling, giving banks a chance to catch their breath and work towards further resolutions. He said that the U.S., and indeed the world, will be dealing with Europe's debt problems for years and years to come, but at least for now, the bankers and governments are on the same side and the banks will be protected, which is good news for all.

What does all of this mean for U.S. stocks? Cramer said it means that U.S. investors are willing to pay higher multiples for companies with good earnings, which is exactly why shares of companies with good earnings rallies on today's news.

Speculative Healthcare Play

For his "Speculation Friday" segment, Cramer highlighted SXC Health Solutions ( SXCI) a pharmacy benefit manager that's actually two companies in one with great growth prospects.

Cramer explained that SXC began as a healthcare technology company that sold software to pharmacy benefit managers. Then four year ago, the company acquired one of its customers, the first in a series of similar transactions that has vaulted the benefit management side of the company's business to 90% of its sales.

Cramer said that the SXC's software now acts like a trojan horse, for once a benefit manager has the software installed, it's likely to transfer patients to SXC's in-house platform or be acquired outright. That's why the company forecasts 30% revenue growth in 2012.

Like all pharmacy benefit managers, Cramer said SXC benefits from the wave of drugs coming off-patent in the coming years and overall as more and more health providers begin using benefit managers like SXC.

So why is the company speculative? Cramer explained that one of SXC's largest customers, which accounts for 39% of sales, is being acquired and might ultimate leave the company. Such a move would be a big blow to SXC, said Cramer, but the possibility also exists that the acquirer may convert its entire system to the SXC platform.

Shares of SXC trade at 24 times earnings with a 20% long-term growth rate. The stock is currently nine points off its 52-week high, and Cramer said investors should use caution when buying in.

Helping Companies to be Mobile

In the "Executive Decision" segment, Cramer once again sat down with Bill McDermott, co-CEO of SAP AG ( SAP), which is acquiring Success Factors ( SFSF) for $3.4 billion. Shares of SAP are up 15% since Cramer last spoke with McDermott on Aug 25.

McDermott said that SAP's mission remains the same: to improve people's lives. He said in today's market, companies must be mobile, must be able to manage in real time and must be moving a lot of their operations into the cloud, three things that SAP helps them do.

When asked about sales in the troubled eurozone, McDermott said that for companies that deliver outcomes that affect a company's bottom line, companies are willing to invest. For "me-too" products that don't offer value, they're not. He said that SAP is seeing consistency throughout the world, with companies wanting to extend their networks and investing in cloud computing.

Regarding the Success Factors acquisition, McDermott said that everyone must manage employees' performance and no one does it better than Success Factors, which is why SAP is very excited about the acquisition. Companies need Success Factors, he said, as the company is quickly becoming the standard for people management.

Among some of the other positives McDermott mentioned were SAP's great relationship with Apple ( AAPL), a stock which Cramer owns for his charitable trust, Action Alerts PLUS . McDermott said that Apple is a great customer and partner. He also touted the company's new line of in-memory database products that can return data 100,000 times faster than transitional enterprise data solutions.

Cramer continued his recommendation of SAP.

Lightning Round

Cramer was bullish on Deere ( DE), Monster Worldwide ( MWW), NuStar Energy ( NS), Eaton ( ETN), Red Hat ( RHT), American Capital Agency ( AGNC), Annaly Capital ( NLY) and Opko Health ( OPK).

Cramer was bearish on Mosaic ( MOS), Twin Disc ( TWIN) and USG ( USG).

Mad Mail

In the "Mad Mail" viewer feedback segment, Cramer followed up on PriceSmart ( PSMT), a stock which stumped him during an earlier show. He said that Costco ( COST) would be his pick in this group and not PriceSmart.

Another head-scratcher was Skullcandy ( SKUL), maker of headphones for MP3 players and smart phones. Cramer said this company is a bad way to play the smart phone revolution because its stock is heavily shorted.

Cramer said that Finisar ( FNSR) will be under heavy tax-loss selling but will be worth buying in January. He was also bearish on Huntsman ( HUN) a commodity chemical maker.

When asked to choose between Norfolk Southern ( NSC) and CSX ( CSX), Cramer said that Norfolk is the better bet at the moment. Cramer was bullish on Occidental Petroleum ( OXY).

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

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

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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 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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