NEW YORK ( TheStreet) -- Jim Cramer pondered the relevance of China to the U.S. markets as he led off his "Mad Money" TV show Monday. He told viewers that while the health of the Chinese economy is a factor for U.S. stocks, the recent weakness is a blessing in disguise, giving some of our overblown stocks a chance to rest and recharge. Cramer said he's not worried about the health of the Chinese economy. He said that the country is doing what it can to spur growth in construction and consumption, and many U.S. traders saw the weakness coming and have already rebalanced their portfolios. Furthermore, Cramer said that while China is important, U.S. markets are strong enough now that they no longer have to follow the Chinese in lock-step. "If oil calms down, the Chinese can engineer a soft landing," he said. So which stocks will be most affected by China? Cramer said the materials stocks, like Alcoa ( AA), will continue to be weak, as will the oil stocks, led by National Oilwell Varco ( NOV), a stock that's cratered 8% in the past two weeks. But on the plus side, Cramer said opportunities are being created in the defensive stocks, names like Heinz ( HNZ) and also the drug stocks. Cramer said he likes Bed Bath and Beyond ( BBBY) and Pepsico ( PEP) on weakness. Regarding the tech sector, Cramer said this group likely won't rally without the help of Apple ( AAPL), a stock which he owns for his charitable trust,
Innovative Touch"Forget about information technology stocks," Cramer told viewers. He said that today's hot technology names are all about innovation, but they're not necessarily involved with microchips or the Internet. Cramer said when people think of DuPont ( DD), they see a big industrial conglomerate, but in reality, DuPont is the world's second largest chemical company has its hands in everything from agriculture to personal safety products. While many think of DuPont as only paint products, the company makes products like Teflon and Corian in the kitchen, Kevlar in bullet-proof vests and Tyvek to keep your house warm. Cramer said that DuPont, another Action Alerts PLUS holding, is mainly focused in three areas: feeding the world, reducing fossil fuel usage and personal safety. He said the company's agriculture division is development everything from drought-proof soy bean seeds to pest-resistent corn. The company will introduce 154 new corn products this year alone. DuPont's performance chemicals business is also on fire, with the company expanding production in everything from paint to plastics to sunscreen and even pigment for the white filling in Oreo cookies. DuPont also has emerging market exposure, with the company opening innovation centers across the globe, including in China, India and Brazil. Cramer said that DuPont shares trade at a scant 11 times earnings, which isn't even keeping pace with the average S&P 500 multiple of 14 times earnings. He said this innovative company, whose shares have risen 200% over the past three years, deserves a multiple that far outpaces the average company.
Fashion for LessFor today's installment of his "What The Heck" series, Cramer dove into the curious case of Ascena Retail Group ( ASNA), the all-but-forgotten retail stock that shocked analysts with a 16-cent-a-share earnings beat on a 14% rise in revenues with a raise in guidance to boot. Shares of Ascena are up 38% so far this year and over 53% since Cramer last spoke to the company's CEO just six months ago. Cramer reminded viewers that Ascena is the new name of Dress Barn, the discount retailer that now includes the Maurice's and Justice chains of stores as well. He said the company's name change has made it drop off the radar for most investors, but after today' surprising earnings results, investors will quickly remember this worthy retailer. Ascena is a player in the "fashion for less" category of retailers, competing with the likes of TJX Stores ( TJX) and Ross Stores ( ROST). But what makes Ascena unique is the company's Maurice's and Justice chains, which appeal exclusively to 20-somethings and tween girls. Justice in particular has now become a lifestyle brand between teens and tweens, said Cramer, putting the company as the No. 3 player in the space just behind the juggernauts of Wal-mart ( WMT) and Target ( TGT). Trading at just 13 times earnings with a 15% growth rate, shares of Ascena are a steal and are worthy of a place in every investor's portfolio, he said.