Cramer's 'Mad Money' Recap: Europe, Earnings to Dominate Week

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.


NEW YORK ( TheStreet) -- Next week will be all about European governments, Jim Cramer told a live studio audience on his "Mad Money" TV show Friday. He said that while the Greek elections will be on everyone's minds, there are still a number of American companies that will do well regardless of the outcome.

On Monday, Cramer said he'll be watching for the U.S. Supreme Court's decision on President Obama's health-care plan. He said that if Obamacare is turned down, large employers including Wal-Mart ( WMT), Target ( TGT) and Home Depot ( HD) will be the beneficiaries.

Tuesday brings the Federal Reserve meeting. Cramer said with interest rates already approaching zero there isn't a lot more the Fed can do to spur the economy. That's why he'll be watching the FedEx ( FDX) earnings for a read on the global economy instead. Also on the list for Tuesday, Jabil Circuit ( JBL), a company that take down a lot of tech names if it does poorly.

For Wednesday, it's Bed Bath and Beyond ( BBBY) and RedHat ( RHT). Cramer said to buy Bed Bath on any selloff after earnings and buy RedHat ahead of earnings.

Then on Thursday it's CarMax ( KMX) and Oracle ( ORCL) taking the stage. Cramer said Carmax is also a good economic indicator, but Oracle may be a speculative buy ahead of their earnings.

Finally, on Friday Darden Restaurants ( DRI) reports. Cramer said this stock has run up big and expectations are too high for the company to meet.

Coach vs. Kors

Every stock has a price that's right, Cramer told his audience as he compared two prominent luxury goods retailers, Coach ( COH) and Michael Kors ( KORS). Cramer said while both of these stocks have been hammered on fears that no one can afford luxury goods, one of these names is a buy now while the other will be a screaming buy in the coming weeks.

Cramer explained that Kors has delivered an astounding 96% gain since its initial public offering, but there's a problem. Starting in a week or so, insiders will be allowed to sell their shares as the lockup period expires. This is known as an "overhang" for the stock, said Cramer, and it's why, despite fabulous earnings this week, the stock is still heading lower.

Until the Kors insider selling is over, Cramer said Coach will be the retailer to buy because the company has great management and a 2% dividend. Coach currently has 835 locations, 512 in North America, and is growing like a weed with same-store sales up 6.7%. Coach trades at 13 times earnings with a 16% growth rate.

However, after that insider selling is done, Kors will be the stock to buy as this company only has 237 stores, 191 of which are in North America, and has a lot more room to grow, Cramer said. Kors was able to deliver 36.1% same-store sales growth; while shares trade at 28 times earnings, that's just one times its growth, which is 28%.

Cramer said the value that will be created by the Kors insider selling will be too good to pass up. Until then, stick with the more consistent Coach.

Under Armour Under Debate

What should investors do with their shares of Under Armour ( UA), a stock that's up 47% so far this year and is flirting with its 52-week high? Well, according to Morgan Stanley ( MS), it's time to take profits, but Bank of America ( BAC) analysts feel differently.

Cramer explained that when analysts disagree, investors win because they get to hear the best arguments both for and against owning a stock. In the case of Morgan Stanley, the company removed Under Armour from its "Best Ideas" list while Bank of America did the opposite, adding the company to its "US-1" list.

According to Morgan Stanley, shares of Under Armour have gotten too expensive at 44 times earnings and 34 times next year's earnings. With a 20% growth rate, the analysts said there are no catalysts to propel the stock higher and now is the time to take profits.

But Bank of America researchers cited a multitude of new products and a rapidly expanding international market as reasons to hold the stock.

Cramer said that while Bank of America is right, so, too, is Morgan, which is why he is advising investors to trim their positions and take profits. In today's finicky markets, Cramer said it's wise to lock in gains. In the worst-case scenario, the stock rises and investors make only half as much in profits.

Lightning Round

Here's what Cramer had to say about callers' stocks during the "Lightning Round":

Tesla Motors ( TSLA): "It's been a speculative stock and I'm still going with sell, sell, sell."

Hess ( HES): "No, no. Hess has been a disaster. Stay away."

Cresud Sociedad ( CRESY): "So dicey. I can't go there. No, no, I'm not recommending anything in Latin America."

AT&T ( T): "AT&T has it all right now. It's terrific. I think it's great."

Chipotle Mexican Grill ( CMG): "The stock under $400 is a buy. I like Chipotle, I like Panera Bread ( PNRA)."

USG Corp ( USG): "I think USG is a terrific play on housing. I think they're going to have a bunch of good quarters."

Kimberly-Clark ( KMB): "They disappointed the last few quarters. That one is turning around and it a buy, buy, buy."

Lions Gate Entertainment ( LGF): "I want to buy it. It's inexpensive if not a little speculative."

Lockheed Martin ( LMT): "I like the yield. I think it's terrific."

Microsoft ( MSFT): "I think Microsoft is terrific. It's inexpensive with a bunch of new products in the pipe."

Lincoln National ( LNC): "No, no. Too risky. If I want an insurer I'm going with Travelers Companies ( TRV) or American International Group ( AIG)."

Ultra Petroleum ( UPL): "That is 100% natural gas. I'm send you to Devon Energy ( DVN). I think Devon is better."

Family Therapy

In a special "Family Therapy" segment, Cramer weighed in on investing disputes within audience members' families. When asked about the eastern European VimpelCom ( VIP) and Windstream ( WIN), Cramer said Windstream is in the penalty box and can be owned for yield only, with AT&T and Verizon ( VZ) being a lot better. He said VimpelCom is a simple "no."

When asked about Chesapeake Energy ( CHK), Cramer said the company is tainted. He recommended Devon Energy ( DVN) as a better play.

Cramer's said he's worried about Nordic American Tanker ( NAT) and would not be a buyer right now.

Rumors and Speculation

Should investors speculate on a takeover if a company's fundamentals are deteriorating? Only if they're OK with losing their investment, said Cramer.

While there have been countless rumors that both Nokia ( NOK) and Research in Motion ( RIMM) are ripe for the picking, Cramer said there are major flaws with this line of thinking. First, both Nokia and RIM are the darlings of their home countries of Finland and Canada, respectively, and are not likely going to be allowed to be sold to foreign entities.

But more important, said Cramer, what company in its right mind would want to buy a company whose business is in decline and directly competes with the likes of Apple ( AAPL)? These rumors, he said, just don't make any sense.

If investors want to play in the smartphone space, why not just own some Apple, which is what Cramer does for his charitable trust, Action Alerts PLUS .

--Written by Scott Rutt in Washington, D.C.

To contact the writer of this article, click here: Scott Rutt.

To follow the writer on Twitter, go to http://twitter.com/scottrutt.

To submit a news tip, send an email to: tips@thestreet.com.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
At the time of publication, Cramer's Action Alerts PLUS had positions in AIG, AAPL and DVN.

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.

If you liked this article you might like

Week in Review: Stocks Finish Week Higher as Fed Comments, Deals Front of Mind

Week in Review: Stocks Finish Week Higher as Fed Comments, Deals Front of Mind

General Mills Buys Blue Buffalo for $8 Billion -- Who's Next?

General Mills Buys Blue Buffalo for $8 Billion -- Who's Next?

It's Dumb to Think Amazon Will Be Able to Skirt Regulators Forever

It's Dumb to Think Amazon Will Be Able to Skirt Regulators Forever

Can Private Labels Revive Retail?

Can Private Labels Revive Retail?

Jim Cramer: You Have to Decide If You Want to Profit From This Moment

Jim Cramer: You Have to Decide If You Want to Profit From This Moment