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.
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, 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.
Here'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."