Cramer's 'Mad Money' Recap: Avoid Trading on Headlines Next Week (Final)

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NEW YORK ( TheStreet) -- With a tidal wave of earnings coming next week, Jim Cramer reminded viewers on his "Mad Money" TV show Friday to keep their fingers off the trigger and avoid trading on the headlines. He said confusion reigns supreme during this most difficult of earnings weeks and mistakes can damage a portfolio in an instant.

Cramer's game plan for next week's trading included Conoco-Phillips ( COP), Netflix ( NFLX) and Texas Instruments ( TXN) on Monday. Cramer was torn on Conoco, as the company is splitting itself up to bring out value, but is still levered to the ailing natural gas. He was bearish on Netflix, a company that is too expensive, and took a wait-and-see attitude for Texas Instruments.

Tuesday brings ARM Holdings ( ARM), 3M ( MMM), AT&T ( T), Panera Bread ( PNRA) and Apple ( AAPL), a stock Cramer owns for his charitable trust, Action Alerts PLUS .

Cramer said Apple must beat $11.80 a share in earnings and revenue of $41 billion to impress Wall Street. He was bullish on AT&T, saying the downside was minimal, and was comfortable with both Panera and 3M.

For Wednesday, Boeing ( BA), Caterpillar ( CAT), Wyndham Worldwide ( WYN) and Cliffs Natural Resources ( CLF) will take the stage. Cramer was bullish on Boeing, Caterpillar and Wyndham, but wanted just to listen to Cliffs Natural.

Still more stocks on Thursday included Celgene ( CELG), a stock Cramer said to buy on weakness, along with Exxon-Mobil ( XOM), a big but not great oil company; ( AMZN), a company that will be hard-pressed to make its numbers; Deckers Outdoor ( DECK), a stock that Cramer said may have peaked; and Zynga ( ZNGA), a company with no real earnings.

Finally on Friday, Cramer said he'll be watching International Paper ( IP), another Action Alerts PLUS holding, Procter & Gamble ( PG) and VF Corp ( VFC). Cramer was bullish on IP, but said he likes Kimberly-Clark ( KMB) over Procter. He was a fan of VF Corp, but noted the stock always gets hit after earnings.

The Stanley Black & Decker Fiasco

When you combine great expectations with a disappointing headline earnings number and a delayed conference call, that's a recipe for disaster, Cramer told viewers. And a disaster it was when Stanley Black & Decker ( SWK), an Action Alerts PLUS stock, reported earnings this Wednesday. Headlines read of a 3-cent-a-share earnings miss and shares plummeted 7%.

Was this selloff warranted? After listening to the conference call and analyzing the results, Cramer said absolutely not. He first criticized Stanley's management for its ludicrous policy of holding its conference call at 10am the day following their earnings release. That policy single-handedly created an information vacuum that was largely responsible for the collapse in its share price, Cramer concluded.

But what of the earnings? Cramer said there was indeed a 3 cent miss, but 2 cents of that was caused by a higher tax rate, not a decline in sales. In fact, revenue was up 12% along with free cash flow and several other key metrics for the company. Additionally, management noted that it has not yet realized full synergies from recent acquisitions and input costs are also declining in the second half of 2012.

Cramer said the Stanley fiasco was clearly a situation of out-of-control expectations, with a stock that had risen 66% from the October lows and more than 16% so far this year. The information vacuum further exacerbated the problem by leaving investors to their own devices without any guidance from the company.

With shares trading at just 11 times earnings, less than their historical average of 14 times earnings, Cramer said that Stanley Black & Decker is still a great story, albeit one that wasn't told correctly, or in a timely manner. He remained bullish on the stock.

Executive Decision

In the "Executive Decision" segment, Cramer sat down with David Cote, chairman and CEO of Honeywell ( HON), a company dedicated to energy efficiency solutions for businesses and consumers alike. Shares of Honeywell are up 40% since Cramer first recommended it in September 2010.

Cote described Honeywell as a "portfolio of opportunities," noting that even though there is weakness in area like European auto sales and U.S. commercial construction, Honeywell is still doing well. He says the company is positioned to grow as soon as the economy recovers. In areas like China, Honeywell is seeing growth of 20%, despite short-term weakness in that part of the world.

Turning to the real focus of the interview, green technologies, Cote said that in order for "green" products to work, they must make economic sense. Which is why items like their Internet-connected thermostat makes sense. Cote explained that up to one-half of a home's energy usage comes from heating and cooling and Honeywell can save a home-owner 30% of that cost without sacrificing comfort.

Some of Honeywell's other green technologies include a bio-based jet fuel that's made from a weed. Cote said the military has already placed an order for 1 million gallons of the new fuel. Honeywell is also big into turbocharging systems for cars, small components that help make four-cylinder cars feel like six-cylinder cars.

Cramer continued his recommendation of Honeywell.


In the "Homework" viewer feedback segment, Cramer followed up on a few stocks that stumped him during earlier shows. He said that CVR Partners ( UAN), a nitrogen fertilizer maker, has too much uncertainty and he would stay on the sidelines.

Home furnishings purveyor Cost Plus ( CPWM) is an interesting story, said Cramer, but the company doesn't have the growth that Pier One ( PIR) has, which is why Pier One is his choice.

Cramer was bearish on both iRobot ( IRBT) and 3D Systems ( DDD), noting that iRobot's guidance was terrible and 3D Systems is fully valued at 27 times earnings.

Mad Tweets

In the "Mad Tweets" segment, Cramer responded to questions sent via Twitter tweets to @JimCramer. He said that he's not a fan of smart phone accessory maker ZAGG ( ZAGG) and wouldn't own it. He was bullish on Schlumberger ( SLB) over National Oilwell Varco ( NOV) and told investors that the only way to play Apple ( AAPL) is to invest in, not trade, shares of Apple.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer said that America's competitive advantage is back, thanks to low-cost natural gas.

Cramer was following up on a comment made on last night's show by PPG ( PPG) Chairman and CEO David Cote, who said that it's now cheaper to manufacture things in America than it is in China, thanks to natural gas, which is now 1/3 the price it is in China.

Cramer said cheap energy will be "the" theme in the industrial renaissance in America and it's one that can make investors money. He said that cheap energy in America will lead to an infrastructure boom, as companies far and wide convert to natural gas to take advantage of the cost savings. That, in turn, will lead to a construction boom, a finance boom and a hiring boom -- all of which are great for America.

Lightning Round

In the Lightning Round, Cramer was bullish on Beacon Roofing Supply ( BECN), Tractor Supply ( TSCO), Wal-Mart ( WMT), Dollar Tree ( DLTR) and Costco ( COST).

Cramer was bearish on Walgreens ( WAG), Juniper Networks ( JNPR), MetroPCS Communications ( PCS), Constellation Brands ( STZ) and Cedar Fair ( FUN).

--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's Action Alerts PLUS was long SWK, IP and AAPL.

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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