Cramer's 'Mad Money' Recap: Looking for an Edge

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NEW YORK ( TheStreet) -- Investors looking for an edge on which way the markets are headed need only look at just one stock, Jim Cramer told "Mad Money" viewers Wednesday. But that stock is not based in America.

There are many stocks making news, explained Cramer, including Toll Brothers ( TOL), which confirmed what Williams Sonoma ( WSM) said about the housing market being alive and well. Others, like Dell ( DELL), remind us just how horrendous things can get, he said.

But while the professional money mangers look to Apple ( AAPL), a stock Cramer owns for his charitable trust, Action Alerts PLUS, and Google ( GOOG) and Amazon.com ( AMZN) for their daily read, individual investors need to focus their attention elsewhere -- and no, it's definitely not on the Federal Reserve.

Cramer said that the Spanish bank Banco Santander ( SAN) is the stock that holds the key to this market.

Shares of Santander bottomed on July 24, a move that signaled the bottom in the markets overall. The bank is truly "too big to fail," said Cramer, and is one of the most dominant financials in the world.

Santander is a proxy for whether Germany will bail out the Spanish economy, said Cramer. If it does, shares could rally to $10. If not, look out below.

So if investors truly want to know which way the markets are headed, all they need to do is look as Banco Santander.

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Doug Tough, chairman and CEO of International Flavors & Fragrances ( IFF), a company that delivered an earnings beat of 8 cents a share when it last reported on Aug 8, sending shares up 10% in a single day.

Tough said that IFF now operates in over 100 countries around the world and helps more than 4,000 customers develop new flavors and fragrances. While many may not know the company by name, this behind-the-scenes company is at the heart of many of the products consumers use every day.

Tough explained that when a company like Lancome is looking to develop a new fragrance, it turns to IFF, which works with the brand to first determine its needs, then works with the company to develop that magical scent it's seeking.

Tough also noted the much of what the company is doing now is becoming more localized, as the world develops more of a localized palette. He said the company is investing heavily into emerging markets.

Much of what the company does is also focused on the trend towards increased health and wellness. Tough said that when customers see "same great taste, less salt/sugar/calories" on the label, that's IFF at work to develop new molecules that are just as good, or better, than the original.

Cramer said International Flavors & Fragrances is a terrific story and is a buy, even with the stock just off its 52-week high.

Cramer's Fantasy Team, Part 3

For today's installment of his "Mad Money Fantasy Stock Portfolio," Cramer debuted his picks for quarterback, tight end, his defense and a kicker.

Cramer said that Apple would have been his first choice for quarterback, but with the stock on a tear recently investors shouldn't pay up for what could be one of the greatest companies of all time.

Instead, Cramer chose Bristol-Myers Squibb ( BMY), another Action Alerts PLUS holding, as his QB. He said the drug maker has a terrific 4.3% yield and a fabulous pipeline of new drugs on the way. The company is also past its "patent cliff" of blockbuster drugs coming off patent and the stock will certainty rebound from its recent selloff.

For his tight end, Cramer went with DuPont ( DD), a 3.4% yielder with lots of upside potential as it moves away from commodity chemicals and into proprietary ones that fit into hot secular growth themes like agriculture.

As for defense, Cramer drafted AT&T ( T), with its 4.8% yield and expanding gross margins. Cramer said AT&T is a bargain at current levels.

Finally, for his kicker, Cramer went with Nike ( NKE), a global brand that while it missed big on its last quarter, is now poised for a rebound. Nike is also, appropriately enough, the new apparel supplier for the National Football League.

Lightening Round

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

Fusion IO ( FIO): "This is a hot stock. I do not think it will be acquired, but I do think it's doing quite well."

NovaGold Resources ( NG): "I hope NovaGold goes up so people can pare their losses. This one is going up in the long run but not in the short term."

Permian Basin Royalty Trust ( PBT): "You're fine. Oil is going to go higher and you're going to make money."

Wal-Mart ( WMT): "I like Wal-Mart here. I'd buy 50% of a position here and the rest if it pulls back."

DreamWorks Animation ( DWA): "No, I'm not a fan. I think it's a loser and I think you should sell it."

Star Scientific ( STSI): "I have not been a fan. Philip Morris International ( PM) has come back. I'd go with them."

Crown Holdings ( CCK): "This has long been one of my favorites along with International Paper ( IP) and Bemis ( BMS)."

Pfizer ( PFE): "Pfizer is a buy here. They're bringing out value and have a good yield. "

Am I Diversified?

In the "Am I Diversified" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets.

The first portfolio included: Roundy's ( RNDY), Ellington Financial ( EFC), Garmin ( GRMN), American Campus Communities ( ACC) and SPDR Gold Shares ( GLD).

"Well played," Cramer said about this diversified portfolio.

The second portfolio's top holdings included: Apple, Chevron ( CVX), Lockheed Martin ( LMT), McDonald's ( MCD) and Johnson & Johnson ( JNJ).

Cramer said that this portfolio was also properly diversified.

The third portfolio had: Vale ( VALE), Annaly Capital ( NLY), ConocoPhillips ( COP), Eli Lilly ( LLY) and AT&T as its top five stocks.

Cramer said this portfolio was diversified, with a great yield to boot.

The fourth portfolio's top stocks were: Petsmart ( PETM), Bank of America ( BAC), Whole Foods ( WFM), Abiomed ( ABMD) and Facebook ( FB).

Cramer was also a fan of this portfolio, while noting that Facebook is, well, not a favorite of his.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer continued Tuesday's rant about Facebook and its board member, Peter Thiel, whose stock sale is so clearly at odds with management's outlook for the company.

Cramer said he realized today that he should actually be thanking Thiel for telling the truth about Facebook, that it has no plan to monetize its users. He likened Facebook to a cocktail party, a place where people gather to socialize, but not to buy.

When they need to search for something, they turn to Google. If they want the lowest price, it's Amazon.com. For music, movies and apps, it's all about Apple. Facebook doesn't figure into any of these scenarios.

On a positive note, Cramer praised the shareholders of Sunrise Senior Living ( SRZ), which today caught a bid from Healthcare REIT ( HCN). Cramer said that Sunrise is just one example of the many good things that can happen to shareholders.

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

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

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 a position in AAPL, BMY, CVX, MCD and NKE.

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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