NEW YORK ( TheStreet) -- "We are in a customer-driven market," Jim Cramer told his "Mad Money" TV show viewers on Wednesday. He told investors that if they follow the customers, they'll know exactly how a company or sector is performing in this market. Case in point, housing. Cramer explained that with rents rising and employment improving, more and more people are buying homes. And that's precisely why he likes the housing-related stocks like Masco ( MAS), featured yesterday, along with companies like Home Depot ( HD). We're also building more cars in this country, said Cramer, and while that's not good news for the automakers themselves, it is great news for Honeywell ( HON), which makes turbochargers, and others like Johnson Controls ( JCI), a stock which Cramer owns for his charitable trust,
Real-Time SoftwareIn the "Executive Decision" segment, Cramer spoke with Vivek Ranadive, chairman and CEO of Tibco Software ( TIBX), an enterprise software vendor whose shares have pulled back 15% in recent weeks while other tech companies have soared. Ranadive described Tibco as a 21st century software company. He said while other companies are focuses on getting information into databases, Tibco is focuses on using information in real-time. He said the company delivered one of its best quarters ever in the financial services area and was able to grow all seven of its vertical markets. Ranadive said that unlike software from other vendors, Tibco software works right out of the box and doesn't require months of implementation. He said companies like Macy's ( M) use Tibco to make customers offers in real-time, while they're still in the store, rather than six months later. For online retailers like Amazon.com ( AMZN), Ranadive said Tibco helps that system predict the "you- might-also-like" list of item recommendations. In the life sciences arena, Ranadive said that Tibco can help biotechs predict when batches of drugs are likely to go bad so they can correct problems before losing product. He said the software can also help predict diseases in certain ethnic groups and help with preventative care. Cramer said Tibco remains a great company, despite its lagging share price. He continued his recommendation.
Targeting the HomeFor the next installment of his "Fixer Upper Stocks," Cramer highlighted the newly-minted Fortune Brands Home & Security ( FBHS - Get Report), the home-products division of the old Fortune Brands. Cramer said unlike the old Fortune Brands, which made everything from faucets to whiskey to golf balls, the new Fortune Brands is all about everything for the home. The company is 100% levered to home-building and remodeling, with 20% of sales stemming from new contraction and 35% from remodeling. The remainder of sales stems from brands like MasterLock, which makes locks and other security items. With the average age of a U.S. home pushing 40 years, Cramer said that Fortune Brands has a solid, profitable business even without a boom in new home construction. But with high operating leverage, as new home construction builds, profits will soar for the company, thanks in part to aggressive cost cutting and supply chain reorganization. Fortune Brands also has a small but growing international business which makes up 17% of sales, as the company pushes into China and other lucrative emerging markets. Cramer said that Fortune shares are just off their 52-week highs and trade at 22.6 times earnings. That might seem expensive, he said, until you consider the company's 22% long-term growth rate. That said, Cramer recommended waiting for a pullback in the share price before buying in. "Don't chase this one," he concluded.