NEW YORK ( TheStreet) -- "Even on the good days, there are still stocks that make you lose sleep," Jim Cramer told his "Mad Money" TV show viewers. Donning a pair of footed pajamas and surrounded by pillows and blankets, Cramer said now that there's a plan to fix the troubled European banks and countries, investors need a plan to fix their portfolios. Today's markets were not a pretty picture, said Cramer, with Oracle ( ORCL) delivering a horrible quarter Tuesday -- citing problems closing big deals, and with European weakness. Making matters worse were poor results from Carmax ( KMX) and Emerson Electric ( EMR). Investors won't sleep well at night in troubled markets like these with just any old stocks, Cramer explained. He said that low-yielding and no-yielding names just won't do; investors need dividend protection. He said on good days, stocks like McDonald's ( MCD) and Nike ( NKE) will rally, but the next down days are likely just around the corner. Cramer once again endorsed master limited partnerships like Kinder Morgan Energy Partners ( KMP) and Enterprise Product Partners ( EPD) along with high-yielding drug stocks like Bristol Myers-Squibb ( BMY) and Merck ( MRK). He said high-yielding consumer stocks like Colgate-Palmolive ( CL) and high-yielding utilities like ConEd ( ED) and Duke Energy ( DUK) also work. "Any of these names will help investors sleep at night," Cramer concluded, especially when the next big down day is upon us.
Eat, Drink, Be Merry and ShopIn the next installment of his "Eat, Drink, Be Merry and Shop" series, Cramer highlighted the ultimate in "be merry" stocks, Walt Disney ( DIS), on the heels of what could be a breakout year for the company. Cramer said that Disney recently boosted its dividend payout by 50%, a move that should be seen by investors as a powerful signal of confidence. He said that Disney has boosted its dividend six times in the past 10 years, but never more than 15%, thus this most recent move is a standout. Business is going well at Disney, and is only poised to go higher as consumer confidence improves. The company's TV and cable properties, like ESPN and ABC, are improving and the Disney brand is beloved around the globe.
Do the HomeworkCramer explained what "doing the homework" really means by examining the most recent results of Nike ( NKE), a company he told viewers to get behind before they reported earnings earlier this week. He said that the company's 16% dividend boost was one signal, but in its earnings release, there were many others. First was demand. No demand equals no sales, said Cramer; but in Nike's case, the company's "cool factor" and athlete endorsements create plenty of demand for its products. Then there's the size of its addressable market. In Nike's case, that's a possible $75 billion and Nike is the dominate player in that market. Also helping to make the demand case: Nike's future orders, up 13%. Investors should consider the near term, said Cramer, as in what catalysts can help boost the stock in the short term. For Nike, those include the return of professional basketball, the 2012 summer Olympics and the World Cup in Brazil. Also on the homework list, a company's costs. Nike said that it's seeing no pushback from customers on its recent price increases, and cotton costs are now falling. There is also geography to consider. Cramer said that much of Nike's growth comes from emerging markets, 13% from China alone. Wall Street also likes accelerating revenue growth, said Cramer, and Nike's got that, too. The company's inventory at its retail locations was higher, he noted, but total units have topped, which is a bullish sign.
Am I Diversified?Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included:
Home Depot ( HD),
Clean Energy Fuels ( CLNE),
Intel ( INTC),
Nvidia ( NVDA) and
Energy Transfer Partners ( ETP). Cramer said that Nvidia and Intel were both tech companies, so he would dump Nvidia in favor of a health care name. The second caller's top holdings included:
Alexion Pharmaceuticals ( AOSN),
Broadcom ( BRCM),
Enbridge ( ENB),
Whole Foods Markets ( WFM) and
Weyerhaeuser ( WY). Cramer said that this portfolio was perfectly diversified. The third caller had:
Signature Bank ( SBNY),
Linn Energy ( LINE),
Nike ( NKE),
Transocean ( RIG) and
Sunoco Logistics ( SXL) as their top five stocks. Cramer said this portfolio was too concentrated in oil and he recommended selling Transocean and Sunoco to pick up a health care stock and a retailer. The fourth caller's top stocks were:
Verizon ( VZ),
McDonald's ( MCD),
Johnson & Johnson ( JNJ),
Intel ( INTC) and
SPDR Gold Shares ( GLD). Cramer said he wouldn't change a thing with this portfolio.