Cramer's 'Mad Money' Recap: Transports Finally Join In (Final)

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(Story updated to add Cramer's Lightning Round picks, Am I Diversified segment and closing comments.)

NEW YORK ( TheStreet) -- Sometimes the bulls are just plain smarter than the average bear.

Those were Jim Cramer's sentiments to his "Mad Money" TV show viewers after the Dow was up for the seventh up day in a row. He said simply "the bears just don't have it anymore."

Cramer explained that perhaps the strongest bear case against the markets were the transports, a group that almost always confirms a rally if they too head higher. But in this most recent rally, the transports have been lagging, sending up warning signs for the bears. That was of course, until today.

After losing ground, the transports burst higher today, said Cramer, on the strength of the rail stocks, in particular. He said this group admitted that coal shipments were lower, but also noted that volume in all of their other segments is more than making up for the loss.

Another positive for the markets, the early release of the latest round of bank stress tests. Cramer said the bears were betting against Bank of America ( BAC) and in favor of Citigroup ( C), only to get the exact opposite results today.

Cramer said he's seeing strength in the markets all around, including in the home improvement stocks like Home Depot ( HD), Lowes ( LOW) and Tractor Supply ( TSCO), with business off the charts so far this month.

Also strong, restaurants like Chipotle Mexican Grill ( CMG) and Panera Bread ( PNRA).

Cramer was also bullish on heavy equipment makers Cummins ( CMI) and Caterpillar ( CAT).

Electronic Health Record Play

In the Thursday "Sell Block" segment, Cramer admitted he got it wrong when recommending Allscripts Healthcare Solutions ( MDRX). He said while the stock is up 124% since he first got behind it, the company's lead rival, Cerner ( CERN), has seen its shares rise by 319%.

Cramer said he got the theme correct, but bet on the wrong horse, as Cerner is clearly the better run company, with the better stock to prove it. He said while both companies work in the electronic medical records space, Cerner has the first-mover advantage and has superior technology that is more integrated between in-patient and out-patient facilities. By contrast, Allscripts began as an out-patient provider and has been having trouble integrating its software properly.

Cerner is also the market leader with 13% market share versus just 4% for Allscripts. Cramer said this gives Cerner a built-in advantage as doctors and hospitals are unlikely to change platforms. Cerner also has better visibility, noted Cramer, something investors love. Allscripts, meanwhile, has been having problems managing expectations.

Cramer said the key metric for these health record providers are their bookings. Cerner had bookings up to $899 million in its most recent quarter, ahead of analysts' expectations. Allscripts saw bookings up 26%, but that number fell below expectations.

Shares of Cerner trade at 28 times earnings and the company has a 20% growth rate. Allscripts has the same growth rate but trades at just 14 times earnings. Cramer said while this may make Allscripts look cheaper, investors are getting what they pay for in this case. Cramer told viewers if they want to be in electronic health records, Cerner is the stock to be in on any weakness.

High-Tech Oil Rigs

Technology companies don't have to be in the tech sector, Cramer reminded viewers as he recommended National Oilwell Varco ( NOV), a stock that largely trades lock step with the price of oil, but shouldn't be.

Cramer said just like Apple ( AAPL), a stock which he owns for his charitable trust, Action Alerts PLUS , dominates the personal electronics space, National Oilwell Varco dominates the technology used on oil rigs.

So just how much technology is on one of today's oil rigs? So much that the company operates four technical colleges just to train enough employees to build and operate their equipment. In fact, deep-water drilling has largely been made possible at all thanks to super high-tech second generation drilling rigs.

Cramer said that 86% of National Oilwell Varco's backlog consists of deep water equipment, but the company's technology also dominated in the on-shore space as well. Nearly 55% of all modern on-shore rigs also use the company's software and equipment, he noted, yet shares trade for just 12 times earnings.

Cramer said National Oilwell Varco should be trading at one time its growth rate, a metric that would value shares some 60% higher than where they trade today.

Am I Diversified?

Cramer spoke with callers to see if their portfolios have what it takes for today's markets. The first caller's portfolio included Hewlett-Packard ( HPQ), Apple ( AAPL), Qualcomm ( QCOM), Frontier Communications ( FTR) and Cimarex Energy ( XEC).

Cramer said this portfolio needed surgery and advised selling Hewlett and Qualcomm and add a financial and a healthcare stock.

The second caller's top holdings included Chesapeake Energy ( CHK), Ford ( F), Spectra Energy ( SE), Microsoft ( MSFT) and American Capital Agency ( AGNC).

Cramer blessed this portfolio as terrific.

The third caller had AT&T ( T), Freeport-McMoRan ( FCX), Ford ( F), DuPont ( DD) and Intel ( INTC).

Cramer said this portfolio was also properly diversified.

The fourth caller's top stocks were Bank of America ( BAC), DR Horton ( DHI), Ford ( F), St Joe ( JOE) and Solazyme ( SZYM).

Cramer said St. Joe and DR Horton were both real estate and he advised selling St. Joe and adding a diversified manufacturer.

Cramer's fifth caller's portfolio included AT&T ( T), Cirrus Logic ( CRUS), Emerson Electric ( EMR), Phillip Morris ( PM) and Raytheon ( RTN).

Cramer said this portfolio was "well played."

Lightning Round

Cramer was bullish on Kraft Foods ( KFT), ConocoPhillips ( COP), Apple ( AAPL), SPDR Gold Shares ( GLD), Heckmann ( HEK), Baidu.com ( BIDU) and Devon Energy ( DVN).

Cramer was bearish on SodaStream ( SODA), Nokia ( NOK) and Newmont Mining ( NEM).

IPO Plays

In his "No Huddle Offense" segment, Cramer said that slow and steady will win the race when it comes to today's pair of IPOs. He said it's time to ring the register on Demandware ( DWRE), an ecommerce software provider that priced at $16 a share an popped 43% in its first day of trading. Cramer said the trade has been made and it's time to sell.

But for the IPO of Allison Transmission ( ALSN), a stock that opened at $23 a share only to trade flat on the day, is a different story. Cramer said this former spin-off of General Motors ( GM) is right in the middle of the raging bull market in trucks and he would be a buyer of the stock long term.

--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 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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