Cramer's 'Mad Money' Recap: New Normal for 2012 (Final)

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NEW YORK ( TheStreet) -- "All is right with the world, or at least with the markets," Jim Cramer proclaimed to his "Mad Money"TV show viewers Thursday.

Cramer said individual stocks are no longer trading in lock-step with the news of the day and are finally trading on their own merits, making the lost art of stock-picking relevant again.

Cramer said the pattern has been that if a company does well, its stock shoots higher, but if if fails to deliver, shares get instantly crushed. Nowhere is this pattern more visible than in retail, said Cramer.

For example, when Tractor Supply ( TSCO) delivered an upside surprise shares shot up today by 10%. "Stunning," said Cramer. Likewise with Dick's Sporting Goods ( DKS), a stock that had Wall Street on edge, delivered better than expected results only to see its share pop 12.5%. These join other retailers like Lululemon Athletica ( LULU), which has seen an 18-point gain from its lows from last month.

But on the downside there's been stocks like Williams Sonoma ( WSM), which did not deliver as promised, only to see its shares down sharply 12.2%. Tiffany & Co ( TIF) told the same tale earlier this week.

Cramer said there's also another pattern emerging in the markets, one that's more concerning. He said some of the most beaten down stocks of 2011 are seeing an undeserved bounce in 2012, mainly the financials. He said that stocks like Bank of America ( BAC) and Citigroup ( C) haven't fixed any of their problems are are just as vulnerable to Europe as a month ago, yet these companies' shares are racing higher.

Cramer said he prefers good banks that are getting better, banks like US Bancorp ( USB), a stock which he owns for his charitable trust, Action Alerts PLUS, and Wells Fargo ( WFC) over bad banks that are still bad.

Finally, Cramer said there's also a rush into the tech sector. Some stocks, like Apple ( AAPL), another Action Alerts PLUS name, deserve the rise in share price, he said. But others, like Micron Technology ( MU), certainly do not.

Change in Perception

"In this game, perceptions can change on a dime," Cramer told viewers in he coined the first-ever reverse "Sell Block" segment. Cramer said the stock of Dupont ( DD), an Action Alerts PLUS holding, which was loathed in December is now worth a second look.

Cramer explained that Dupont was in the doghouse when it pre-announced an earnings shortfall back on Dec, 9, but since then several key factors have changed for the company and as he always says, when the facts change, investors need to change their minds.

First, Cramer said that Monsanto ( MON) reported a monster quarter, something that should bode well for Dupont's agriculture division. Second is autos, where the U.S. build numbers continue to increase from an estimated 13 million cars just last month to an estimated 14.5 million cars today. More cars is great news for Dupont's auto products.

Third is housing, which appears to have bottomed. If housing is turning a corner, said Cramer, that would be great news for Dupont. Fourth is the falling price of natural gas, a key component in many chemicals for Dupont. Cramer said that natural gas is perhaps the key raw material for the company.

Finally, there's management. Cramer said Dupont's management continues to cut costs and further bolster their 3.4% dividend yield. With shares trading at a low 11 times earnings with a 12% growth rate, Cramer said its time for investors to change their mind and get bullish on Dupont.

King of Home Tools

For his next "Fixer Upper" stock, Cramer highlighted Stanley Black & Decker ( SWK), another Action Alerts PLUS holding. Cramer said with home improvement retailers like Home Depot ( HD) doing so well, it's only natural for investors to look at which companies make the products that Home Depot sells. And in the case of Stanley, that's a lot of them.

Stanley is the reigning king of the tool market, with an astounding 40% market share in the U.S. The company derives 50% of its sales from the do-it-yourself home improvement market, 26% from its security products division and the remainder from industrial products. Stanley also has a small, but growing, international presence (26% of sales).

Cramer said Stanley's strength has been to keep its customers satisfied so it can continue taking market share. The company also has a solid track record of smart acquisitions and cost-savings from those acquisitions. Because of this, Cramer said the earnings estimates for Stanley may indeed be too low, allowing the company to surprise Wall Street as housing continues to bottom and recover.

Shares of Stanley Black & Decker currently trade at just 12 times earnings despite the company's 18% growth rate and a PEG ratio of less than one. Cramer said this, coupled with its 2.3% dividend yield, makes shares of Stanley an incredible bargain.

Mad Mail

Cramer answered a number of questions in his usual, rapid-fire way. He said that Pandora ( P) is "all sizzle and no steak" and he would not be a buyer. When asked to choose between Taiwan Semiconductor ( TSM) and ARM Holdings ( ARMH), Cramer said that ARM has proprietary technology and Taiwan does not.

When asked to choose between Annaly Capital ( NLY) and Anworth Mortgage ( ANH), Cramer said these two stocks are not comparable and directed investors to Annaly's Website to read its monthly newsletter to find out why.

Cramer said that Walter Energy ( WLT) is not doing well with coal prices coming down and he would hold onto shares because earnings should improve but not because of takeover rumors. Cramer was also slightly bearish on Vail Resorts ( MTN).

Finally, Cramer said that he would never tell investors not to take a profit, but when it comes to Energy Transfer Partners ( ETP), reinvesting the dividends is the only way to go.

Lightning Round

Cramer was bullish on Kirby ( KEX), Nucor ( NUE), Schlumberger ( SLB), Kodiak Oil & Gas ( KOG), Nordic American Tanker ( NAT) and Robert Half International ( RHI).

Cramer was bearish on Dryships ( DRYS), Carbo Ceramics ( CRR), American Woodmark ( AMWD), Walgreens ( WAG) and Knightsbridge Tankers ( VLCCF).

Washington's Help Needed

In his "No Huddle Offense" segment, Cramer said he's mesmerized by the dramatic decline in the price of natural gas.

Cramer said the U.S. is rapidly becoming the largest producer of natural gas in the world, and thanks to reporting restrictions, the U.S. has far more of the stuff than anyone will ever realize. Yet those in Washington continue to show no willingness to endorse the clean-burning fuel for surface vehicles.

Cramer said that natural gas is a game-changer for the U.S., and if we start using it for vehicles instead of just for power plants and home heating, we could quickly stop subsidizing our enemies and be on the road toward energy independence. The natural gas industry is making some strides on its own, said Cramer, but without Washington's help, investors will have a very hard time making money with natural gas stocks.

--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 US Bancorp, Apple, Dupont, Stanley Black & Decker.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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