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NEW YORK ( TheStreet) -- News that's expected by everyone isn't really news, Jim Cramer said Monday on "Mad Money" after the markets finished near their lows for the day. He said that while the markets rallied last week in anticipation of good news from Spain, what actually transpired fell far short of expectations. Cramer said today's market moves should not have been a shock to educated investors, as the markets were demanding a lot of the eurozone this weekend. Spain needed capital, he said, not more loan guarantees, which means the crisis will lumber on. If the news out of Europe really had fixed the problem, investors would have been reaching for gold, noted Cramer, as any true bailout would be seen as inflationary. He said the CurrencyShares Euro Trust ( FXE) would have also risen above $130 and the bond yields for most European countries would have fallen even more. But none of these events happened, which should have been the tip-off the latest news wasn't what the markets were expecting. Cramer said what the European countries need most is growth; to date, none of the bail out plans offer growth. That's why he continues to recommend stocks that offer domestic security and dividends and are not overly economically sensitive. AT&T ( T) and Verizon ( VZ) topped Cramer's list, along with cigarette maker Altria ( MO).
What Drives Rental CompaniesSometimes great ideas don't make for great companies, Cramer told viewers, as he pitted the upstart Zipcar ( ZIP) against the incumbent Hertz Global ( HTZ) to see which company rules the rental car market. Cramer said when Zipcar came public last year it was billed as a revolution in car sharing, one that promised to deliver rapid growth and profits for all. However, since its IPO shares of Zipcar are down 43% and might not yet be done heading lower. While Zipcar is the leader in the hourly rental car market with some 500,000 members sharing over 9,000 vehicles, Cramer said there are simply no barriers to enter this market and that's precisely what Hertz and other rental car companies have done. He called Zipcar's model a niche market for a small percentage of car renters, one that may have already peaked. Zipcar has been around since 2000, noted Cramer, yet the company is only now turning a profit.
Meanwhile, Hertz is the number one airport-based rental car service, the opposite of niche. The company also gets 15% of sales from equipment rentals, a segment set to grow with the economy, and has emerging market prospects in both China and Brazil. Hertz' new kiosk-based rental system doesn't even need to be staffed and allows customers to rent cars using simple RFID smartcards that unlock and start their cars. So while Zipcar trades at 29% earnings and has shaky growth prospects, Cramer said he prefers to invest with Hertz, which trades at only eight times earnings with a 12% long-term growth rate. "It's not even a fair fight," Cramer concluded.
Action Alerts PLUS , and is now going for Pepsi. Cramer explained that for years Coke has had a lot going for it. The company had no snack business and thus was not exposed to rising grain prices. Coke also had a robust international business, with nearly 80% of sales stemming from overseas. But in today's markets what had once been tailwinds for Coke are now changing into headwinds, making Pepsi the winning bet. Commodity prices are falling, said Cramer, meaning Pepsi is set to benefit from falling grain prices but also from falling plastics, cardboards and even gasoline and transportation costs. Pepsi is not exposed to the slowness in western Europe, having chosen to invest in eastern Europe. Even the company's dividend yield, now 3.1%, has surpassed Coke's 2.7% yield. Pepsico is also seeing strength in its Mountain Dew brand, which has moved into the number one spot in both India and Pakistan. The company has also announced job cuts and other cost savings to further bolster earnings. That's why after many years, Cramer said the answer to the question "Coke or Pepsi" has finally swung to Pepsico's favor.
Coke or Pepsi?In the age-old question of which is better, Coca-Cola ( KO) or Pepsico ( PEP), Cramer announced a stunning change of opinion: He's eliminated Coke from his charitable trust,
Lightning RoundHere's what Cramer had to say about caller's stocks during the "Lightning Round": Legacy Reserves ( LGCY): "I've got enough problems with ConocoPhillips ( COP). I'm not going there."
WR Grace ( GRA): "I have companies like Dow Chemical ( DOW) with a 4% yield that they're giving away. Dow, yes, yours, no." Arena Pharmaceuticals ( ARNA): "I think it's a terrific spec stock. I think they should raise a lot of money to fight obesity." Skullcandy ( SKUL): "I don't see why this accessory company should be bought. I don't like their niche." Frontier Communications ( FTR): "Oh come on, that's way too dangerous. You have Verizon and AT&T. Why look any further?" Nokia ( NOK): "There's nothing there. There will be no takeover." International Game Technology ( IGT): "I'm done with that one. If you need a casino play I'll send you to Las Vegas Sands ( LVS) but you don't need a casino play right now." Stanley Black & Decker ( SWK): "It should be higher but it has European exposure. No one wants any Europe." Cedar Fair ( FUN): "One way to have fun is to own FUN. It has a 6% yield and it's a great domestic security play."
Up and Down ChartNot all stocks go up in a straight line, and that's why Cramer circled back to Chart Industries ( GTLS), a stock that's up 44% since his original recommendation in February 2011, but also one that's fallen 13% since Cramer last spoke with the company's CEO on April 13. Cramer said there's still a lot to like at Chart Industries. First, the company reported a terrific quarter April 26, announcing its backlog of business grew by 35% year over year, and margins expanded. Chart derives 58% of its sales from outside the U.S. where, unlike the U.S., countries are clamoring for the clean, cheap alternative to oil. But perhaps the biggest driver for Chart Industries were last week's announcements by Westport Innovations ( WPRT) that they're partnering with equipment giant Caterpillar ( CAT) to make natural gas mining equipment and locomotives and the announcement that Royal Dutch Shell ( RDS.A) will be building 200 natural gas fueling stations across the U.S. Cramer said both of these announcements are great news for Chart, yet the stock barely budged on the news. Clearly, more natural gas vehicles and fueling stations will mean more business for Chart, which makes the technology and the tanks to liquefy natural gas for vehicle use.
With so many positives, Cramer said that shares of Chart deserve to be much higher than where they trade today, affording investors a terrific entry point.