Cramer's 'Mad Money' Recap: Rough Ride (Final)

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(Story updated to add Cramer's comments on Cummins' excellent results.)

NEW YORK ( TheStreet) -- Invest in stocks on a case-by-case basis continues to be Jim Cramer's short-term strategy.

He told his "Mad Money" TV show viewers that they need to remain cautious, keep some cash on the sidelines but as always, stay the course.

Cramer said that today's trading action proved that when governments are responsive to the needs of the markets, good things happen. He said that one by one, the fears that had the markets spooked on Monday are slowly being addresses.

He said the Germans have stepped up, albeit in the final hour, to defuse worries over Greece. Then Brazil issued an interest rate cut to help keep the emerging economies from slowing. And finally, talks with Iran are accelerating, making the threat of air strikes less likely in the short term.

Cramer said that all of this good news helped keep the averages in positive territory, but investing remains a company by company issue. Apple ( AAPL), a stock which he owns for his charitable trust, Action Alerts PLUS, remains a great investment, said Cramer, but McDonald's ( MCD) issued cautionary comments. Drug maker Merck ( MRK) slashed estimates, while semiconductor stocks followed Cypress Semiconductor's ( CY) lead and did the same.

That's why Cramer reiterated using caution, trimming positions and raising cash so investors will be ready for whatever comes next.

Exporting Natural Gas

In the "Executive Decision" segment, Cramer once again welcomed Charif Souki, chairman, president and CEO of Cheniere Energy ( LNG), an energy producer looking to export some of America's abundant natural gas supply. Shares of Cheniere have doubled since Cramer first noticed the company.

Souki called the transformation in America's natural gas industry over the past three years "truly astonishing." He said that after looking to import natural gas just a few years ago, America now has increased production so far that demand can't keep up.

Souki said even with increased demand from replacing coal-fired power plants, increased industrial uses and converting the U.S. truck fleet to natural gas, our country still will have plenty of gas for export. "We just don't know what to do with the gas," he concluded.

When asked whether the U.S. government could block the export of this clean, domestic resource, Souki said that exporting natural gas will be a boon for the U.S. economy and it's too important not to happen. Souki said he expects 3,000 workers to be employed at their export terminal when completed, with an additional 40,000 to 50,000 workers indirectly benefiting from its operation.

Finally, when asked about Cheniere's capital needs, Souki said that his company has the money it needs to complete phase one of its export facility and is already looking towards phase two.

Cramer said he's still a believer in Cheniere, noting that Souki has delivered on all of his promises despite the skeptics.

Big Comeback

In the "Executive Decision" segment, Cramer spoke with Mel Karmazin, CEO of Sirius XM Radio ( SIRI), the satellite radio provider that was near death in 2008, but has since staged a miraculous recovery, adding 540,000 new subscribers in its most recent quarterly results.

Karmazin said when it comes to his company, free cash flow is the only metric that matters. He explained that free cash creates wealth for investors and allows the company to buy back stock, pay down debt and make acquisitions in order to grow. When Karmazin first took the reigns at Sirius XM over eight years ago, free cash was negative $500 million. This year the company enjoyed $700 million of positive cash flow.

When asked what Karmazin planned to do with all that free cash, he said that there is simply nothing he would like to acquire, so returning that cash to shareholders is at the top of his board of directors' list.

Karmazin also noted that while he cannot stop an unsolicited bid from Sirius' largest shareholder, Liberty Media ( LMCA), which owns 40% of the company, he does represent all of the Sirius' shareholders and would fight for the best possible deal.

Turning toward increased competition from Internet radio providers like Pandora ( P), Karmazin said that Sirius has always had competition, first from terrestrial radio and now from Internet radio.

He said that ad-supported business models are questionable however, given how much advertising inventory the Internet has created. Karmazin noted that even with more competition than ever this year, Sirius still was able to add more new subscribers than ever before.

Finally, when asked about growth drivers for the company, Karmazin said that the increase in new car sales has helped his company's top-line growth, but an even bigger driver is that of used car sales, as more and more used cars are satellite radio-equipped. He said that Sirius XM is the No. 1 radio company in the world when it comes to revenue and has the growth characteristics to warrant its valuation.

After calling the company dead in years past, Cramer said that Karmazin has weathered the storm and Sirius XM now has brighter days ahead of it.

Lightning Round

Cramer was bullish on McDonald's ( MCD), Wells Fargo ( WFC), JC Penney ( JCP), BGC Partners ( BGCP), Cypress Semiconductor ( CY), Magna International ( MGA) and Celgene ( CELG).

Cramer was bearish on Alpha Natural Resources ( ANR), Weight Watcher's ( WTW), Accuride ( ACW), Office Depot ( ODP) and Giant Interactive Group ( GA).

Apartment REITs Too Risky

"The ultra-affordability of housing is not good news for everybody," Cramer told viewers, as he placed all of the apartment real estate investment trusts into his "Sell Block."

He said that apartment REITs like Apartment Investment ( AIV), Equity Residential ( EQR) and UDR ( UDR) are too risky given the changes in the housing market and have ended their multi-year bull market run.

Cramer said his decision was based solely on economics. With housing never having been more affordable than it is today, thanks to cratered home prices and super-low interest rates, the boom in apartment rentals will be coming to an abrupt halt very soon. He said not only are homes more affordable, but rising rents from limited supply will also be ending soon as tons of new apartments come on line later this year.

Cramer said the apartment REITs have over-performed the averages over the past three years, but with yields on these companies falling under 3%, the upside is limited while the downside risk in increasing day by day.

Cummins Shines

In his "No Huddle Offense" segment, Cramer reminded viewers that execution matters, and that's especially evident when comparing truck makers Navistar ( NAV) and Cummins ( CMI).

Cramer said that Cummins reported excellent results, with sales up 19% while the company is taking share and making engines that are the envy of the world. Navistar on the other hand, "dropped the ball," said Cramer, reporting a $2.19 a share loss based largely on recalls and increased warranty repairs. The company also cut the guidance that it issued just last month, further illustrating how it has lost control of its business.

Cramer said that shares of Cummins are clearly worth the premium price they command.

--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, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 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, 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, 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 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, 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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