Cramer's 'Mad Money' Recap: There's No Place Like Home Stocks

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NEW YORK ( TheStreet) -- With a turnaround in housing underway, it's time to go shopping for home-related stocks, Jim Cramer told "Mad Money" viewers Tuesday. That means taking a stroll through the aisles of Home Depot ( HD).

Cramer said Home Depot's conference call was a thing of beauty, one where management told investors that even the hardest-hit areas of the country, California and Florida, are seeing improvements in their housing markets. Cramer said that news alone is enough to warrant a buy of Home Depot, along with any of the home builders with big exposure to those regions.

He gave the nod to Standard Pacific ( SPF), Pulte Homes ( PHM) and Lennar ( LEN).

But beyond the obvious, Cramer said that Home Depot is also excellent for tipping investors off to which categories are poised to profit most. The company noted that inventories are lean, meaning new orders are coming for a whole host of companies including flooring, paint, kitchen and bath, lumber, tools and more.

Cramer said when it comes to flooring, he likes Mohawk Industries ( MHK), and when it comes to paint Sherwin Williams ( SHW) is the way to play. For kitchen and bathrooms, Cramer likes Fortune Brands Home Security ( FBHS) and Masco ( MAS).

Lumber means Weyerhaeuser ( WY), a stock Cramer owns for his charitable trust, Action Alerts PLUS, and also Lumber Liquidators ( LL), a stock making new 52-week highs.

Cramer said that even Whirlpool ( WHR) is too cheap to avoid at these levels. He'd also be a buyer of Stanley Black & Decker ( SWK) in the tools space.

Finally, Cramer said that he's a buyer of eBay ( EBAY), another Action Alerts PLUS name, as that company's PayPal unit is now accepted at Home Depot and could be a catalyst for other big merchants.

Off The Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the chart of Currency Shares Euro Trust ( FXE), the ETF that gauges the health of the euro against the U.S. dollar. According to Collins, the euro may be poised for a rebound. Cramer said that's a theory investors should pay attention to since Collins correctly called the top in the euro several months ago.

Looking at the daily chart of the FXE, Collins noted the euro's fall since March of this year. However, both the TRIX and relative strength indicator (RSI), two gauges of momentum, are signaling an oversold condition. This, combined with a recent head-and-shoulders pattern, is telling Collins that a bounce may be imminent.

The weekly chart confirmed this theory, as the FXE displayed a bearish channel pattern for the euro but also a wedge pattern that the index seems to be poised to break out of. Collins said the stochastics are also showing an extreme oversold condition, one that could result in a 6% to 13% bounce in the currency.

Cramer said with so many investors fearing the worst for the euro, Collins' contrarian view needs to be on investors' radar. He called right now a "buyable moment" for the euro, one that if Collins is right, could see an 18% move to the upside.

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Steve Sadove, chairman and CEO of Saks ( SKS), the luxury retailer whose shares rose 6% near their 52-week highs on a surprise 4.7% increase in same-store sales. Shares of Saks are up 22% since Cramer last recommended the stock on Dec 12.

Sadove said that Saks is in "acceleration mode," as many of its stores and segments are performing well. He said the company's New York store is seeing some headwinds now that European tourism is lagging, but overall he doesn't see New York as a negative.

Specifically, Sadove highlighted Saks' eighth-floor shoe department as one standout, calling the floor the second most profitable at Saks' New York flagship location. Jewelry is also strong, he noted, as is women's apparel. Other highlights for the company are its new all-robotic distribution facility in Tennessee, which will help speed along both in-store and online orders for the company.

When asked why the company no longer offers monthly guidance, Sadove explained that providing monthly same-store sales is only half the story and isn't accurate without also including the gross margin component. Thus Saks decided to only offer quarterly guidance, which includes both numbers.

Finally, when asked about store closings, Sadove said that Saks has already closed eight underperforming locations and will be announcing a few more in the future. Saks is opening new locations, however, as it responds to a shifting market.

Cramer continued his support for Saks.

Lightning Round

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

Michael Kors ( KORS): "Stock's going higher. That one could go to new highs."

AmeriGas Partners ( APU): "I'm not a big fan of their pipelines, but I'm going to say it's OK."

Titan International ( TWI): "It's an inexpensive stock. I wouldn't call it a big buy."

Morgan Stanley ( MS): "No. I'm not going to go there. There's no catalyst to buy it."

Church & Dwight ( CHD): "I'm surprised their quarter wasn't better. I'm going to say I need to see another quarter before I can recommend it."

A Stock With Energy

In his second "Executive Decision" segment, Cramer spoke with John Schiller, chairman and CEO of Energy XXI ( EXXI), an off-shore oil and gas driller that delivered a three-cents-a-share earnings beat on a 21% rise in revenue and record production volumes.

Asked why shares of Energy XXI remain in the dumps despite the company's great performance, Schiller said the markets have fallen in love with the shale oil companies and have forgotten about the Gulf of Mexico. He said Energy XXI continues to use new technology on older oil fields and is having great success at getting more oil out of the ground.

When asked about Energy XXI's future plans, Schiller said the company continues to look for acquisitions that are a good fit for their technology. He explained that while the major oil companies may find an oil field unprofitable when compared to their other fields, Energy XXI can take the same field and make it profitable thanks to a lower cost structure.

Schiller said the markets will eventually reward Energy XXI, as the company's horizontal drilling technology continues to yield great results.

Finally, when asked whether North America could become self-sufficient in energy, Schiller agreed with Cramer's assessment that with some hard work that goal is well within reach.

Cramer said Energy XXI is a cheap stock that should be on every investor's radar.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer opined on the dramatic differences between Google ( GOOG) and Groupon ( GRPN).

Cramer said that after years of seemingly losing its way, Google is now back in the game, making smart acquisitions like Zagat and now Frommer's, taking great offline content and monetizing it online. He said the Zagat and Frommer's combination could give rival Yelp ( YELP) a run for its money.

But then there's Groupon, another Internet company that's totally lost its way. The company has seen a dramatic deceleration of its core business and is desperately seeking to expand into more traditional retail to stem its losses. Cramer said that Groupon's business model is clearly broken and the thrill of online coupons is over.

Cramer said he would be a buyer of Google, even at these levels. As for Groupon, Cramer said the nicest thing he could say is that it's still too early to buy.

And in Closing...

In his closing comments, Cramer spoke about a few stocks of which he's often asked @JimCramer on Twitter. He said investors should not be buying Nokia ( NOK) but should be buying Sprint Nextel ( S) and Apple ( AAPL), an Action Alerts PLUS name.

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

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At the time of publication, Cramer's Action Alerts PLUS had positions in AAPL, EBAY and WY.

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."

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