Cramer's 'Mad Money' Recap: A Portfolio From Your Morning Routine

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NEW YORK ( TheStreet) -- Nobody ever said the stock market was easy, Jim Cramer told "Mad Money" viewers Monday, but that doesn't mean it has to be. Cramer said the markets can be difficult, but only if you overthink them.

Proving his point, Cramer pulled a portfolio out of a hat -- or in this case, a portfolio from his kitchen and bathroom. He followed his morning routine to note products from Church & Dwight ( CHD), makers of Arm & Hammer toothbrushes, Colgate Palmolive ( CL), an obvious choice for toothpaste, and Johnson & Johnson ( JNJ), makers of dental floss, baby powder and Band-Aids.

Cramer said that all of these stocks are hiding in plain sight, have little exposure to Europe and in the case of Church & Dwight, is up 25% for the year.

Also a part of Cramer's morning ritual, Kimberly-Clark ( KMB), up 15% for the year with a 3.5% dividend yield, Procter & Gamble ( PG) and Clorox ( CLX).

Cramer was also bullish on CVS Caremark ( CVS), a stock which he owns for his charitable trust, Action Alerts PLUS, and where he buys many of his toiletries, along with Dunkin Brands ( DNKN) for his morning coffee, Dean Foods ( DF) and Pepsico ( PEP).

Cramer said all of these names represent great value and are performing admirably in a market that isn't coming close.

Preparing for Recession

Investors needs to start preparing for the very real possibility of a rescission, Cramer said as he unveiled a recession-resistant portfolio that includes stocks with little European exposure and big dividend protection.

Cramer's first stock in the portfolio is General Mills ( GIS), the consumer packaged-goods maker that's benefiting the most from falling commodity prices including paper, cardboard, plastic, natural gas and gasoline.

Next is Dollar General ( DG), Cramer's new favorite in the space. Cramer said the company is expanding into California and trades at only a slight premium to its growth rate.

Third is drug maker Abbott Labs ( ABT), which is in the process of splitting itself into a medical device company and a pure-play pharmaceutical company. Cramer said the split will unlock immense value at Abbott.

Also making the cut, Consolidated Edison ( ED), the New York-based utility with a 38-year history of boosting its dividend, which currently stands at a 3.9% dividend yield.

Rounding out the portfolio is Verizon ( VZ), a company with no European exposure and a juicy 4.5% dividend yield on top of consistent, reliable earnings.

Predicting Performance

Can a company's first-half performance predict how it'll do in the second half of the year? Cramer put it up to a vote as he nominated five first-half performers and told viewers to choose their favorite by voting on Twitter @JimCramer using #stockderby.

Arena Pharmaceuticals ( ARNA) is the first "home run hitter" nominee, up 225% so far this year on FDA approval for its new obesity drug. While the drug is not slated to be on the market until late-2012, Cramer said the market opportunity for Arena remains huge.

Next up is Onyx Pharmaceuticals ( ONXX), a stock up 76% for the year on takeover chatter as well as the latest FDA approval anticipations.

Also making the list, the first airline every considered on Mad Money, US Airways ( LCC). Cramer said while US Airways won't be getting his vote, the stock is up 75% for the year and with fuel prices plummeting and the disarray at American Airlines continuing, the company is worthy of a mention.

Fourth is Mellanox Technologies ( MLNX), the Israeli technology firm helping to make your data move faster. This company has a track record of UPOD, or under-promising and over-delivering, said Cramer, and it's stock is up 69% for the year.

Finally, Pharmacyclics ( PCYC), another biotech name, completes the list. Shares of Pharmacyclics are up 97% for the year, but Cramer noted that the company has done little since its inception in 1996 and 10% of its shares are currently sold short.

Cramer told viewers to do their homework, then hop on Twitter to let him know which company gets their vote for the best performance in the second half of the year.

Lightning Round

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

Velti ( VELT): "No, that stock is not to be owned. I want nothing to do with mobile advertising."

Talisman Energy ( TLM): "That's a second-rate oil company in an environment where the first-rate ones are going down."

American Axle ( AXL): "I can't recommend auto parts right now."

Eldorado Gold ( EGO): "No, I'm not going to recommend a gold stock when I can recommend the SPDR Gold Shares ( GLD)."

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Joe Almeida, chairman, president and CEO of Covidien ( COV), a company that's taking control of its own destiny by spinning off its pharmaceutical business. Shares of Covidien have popped 25% since Cramer first got behind the company on Dec 9.

Almeida said the spinoff is all about bringing value to Covidien shareholders. He said the pharmaceutical and medical devices business have very different life cycles, which is why the split will make sense to prospective shareholders of each entity.

Almeida said the slower-growing drug business is still a great business, one that's in great markets and able to deliver healthy margins and cash flows. Meanwhile, the fast-growing medical devices business has been refocused on growth and is concentrating on disruptive technologies that are bringing new treatments to patients that previously could not be treated.

When asked about the pressures of health-care reforms to cut costs on medical devices, Almeida noted that hospitals will always pay for devices that save lives, which is what Covidien offers. He said the company always looks at all its devices through both clinical and economical prisms, which is why they can deliver life-saving devices at the right price.

Cramer continued his support for Covidien.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer opined on what this quarter's earnings season is likely to produce. In a word, selling -- lots of selling.

Cramer said there are two sides to an earnings season, the actual earnings and the outlook. He said while the earnings are likely to be OK this quarter, the outlooks will most definitely be cloudy.

Take Intel ( INTC), Cramer said it will be hard for Intel to marginalize the slump in Europe and even the company's 3.5% divined yield might not be enough to stem a decline. That leaves little hope for lesser-performers like Hewlett-Packard ( HPQ) and Research In Motion ( RIMM).

The same will apply to the industrials, said Cramer, where his charitable trust, Action Alerts PLUS sold General Electric ( GE) and Stanley-Black & Decker ( SWK) ahead of earnings season.

Even Caterpillar ( CAT) won't likely escape the carnage, said Cramer, even though everyone already knows, and has known, the weakness is coming.

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

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

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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 a position in ABT, CVS and GIS.

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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