Cramer's 'Mad Money' Recap: Politics and Business Don't Mix

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NEW YORK ( TheStreet) -- The business of stocks is not politics, Jim Cramer announced to his "Mad Money" TV show viewers Thursday.

He said rather than asking whether you're better off now than you were four years ago, asked whether the companies in your portfolio are.

Cramer reminded investors they're not investing in politics, they're investing in the present and future fortunes of the individual companies. So while the unemployment rate may have risen from 5% to 8%, which is bad for you personally, for many companies things are a lot brighter now than they were four years ago.

What's good for companies is actually bad for politicians, Cramer explained. Companies want to create more and better products for less money. That means hiring fewer workers and using more technology to keep margins high. But that's exactly the opposite of what the politicians are hoping. They want more hiring.

So while the U.S. economy continues to improve and the prospects for a resolution in Europe get ever closer, it's no wonder the markets were able to rally, said Cramer.

Need proof? Just look at Stanley Black & Decker ( SWK), up 8% Thursday, or Williams Sonoma ( WSM) hitting new highs. These stocks are rallying because the future is looking up for U.S. housing.

Even laggards like FedEx ( FDX), Cummins ( CMI) and Caterpillar ( CAT) have been on the move, all proving that things are beginning to look up.

So forget about politics, Cramer concluded, and think about how the individual companies in your portfolio are doing.

Executive Decision

In the "Executive Decision" segment, Cramer went on location with Manny Chirico, chairman and CEO of PVH Corp ( PVH), a stock that hit a new 52-week high Thursday and is up 140% since Cramer first got behind the company in Jan 2008.

Chirico was very upbeat on his company's outlook, noting that both the Calvin Klein and Tommy Hilfiger brands remain strong in Europe, which allowed them to deliver 10% revenue growth and 15% same-store sales growth in the region. He said his company is clearly taking market share in what has been a tough region for their competitors.

Turning closer to home, Chirico said the U.S. back-to-school shopping season is off to a strong start and North American same-store sale comparisons are in the high single digits. He also mention a new rollout of the company's Izod brand at J.C. Penney ( JCP) as another highlight.

When asked to comment on the partnership with J.C. Penney and the company's turnaround plans, Chirico said Penney's store-within-a-store concept is a great way to showcase PVH's brands and the company clearly has a clear path to where it wants to be. PVH remains supportive of J.C. Penney, he said, which is seeing good performance in the early days of the turnaround.

Chirico also had positive things to say about Macy's ( M), another retailer that has helped PVH grow its brands over the past three years. He said Macy's continues to do a fabulous job.

When asked about the specifics of the business, Chirico confirmed that input costs are falling but many have been offset by higher labor costs. He said PVH continues to be happy with its partnership with Warnaco ( WRC), which licenses the Calvin Klein brand in certain categories.

Chirico, Part 2

Continuing his interview with Manny Chirico, Cramer asked how the company can justify its 31 flagship stores around the globe. Chirico explained that PVH looks at its flagships more as brand builders and considers part of their costs to fall under marketing. Rather than advertise on a billboard, which goes away after a few months, the stores remain in high-traffic areas around the world as a symbol of what their brands represent.

When asked further about how PVH is positioning brands like Calvin and Tommy, Chirico said in North America they're looked at as premium brands, targeted towards the upper-income demographic. Fortunately, that's a sweet spot right now as that segment is not suffering from the economic slowdown, he added.

So just how big a player is PVH? Chirico said that in most department stores, when it comes to men's dress shirts you'll find PVH controlling 50% to 75% of the floor since PVH now has nine of the top 10 best-selling dress-shirt brands.

Finally, when asked about growth opportunities around the globe, Chirico said Asia remains a big area, representing only about 10% of the company's volume so far. He ale noted that South America, mainly Brazil, also remains hot.

Cramer continued his support for PVH Corp.

Lightning Round

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

Cliffs Natural Resources ( CLF): "It's probably too late to sell. Let it bounce, then sell, sell, sell."

Ares Capital ( ARCC): "I think you're fine with that one."

Golar LNG ( GLNG): "I totally get it but I like Cheniere Energy ( LNG) more."

Franco-Nevada ( FNV): "Why bother? Honestly, why not just own the SPDR Gold Shares ( GLD)?"

Energy Transfer Partners ( ETP): "This is one of the worst stocks I own for my charitable trust. It was down today, so I say don't buy."

Allstate ( ALL): "Allstate is a winner but I prefer American International Group ( AIG), which is a better buy."

Sell Block

In the Thursday "Sell Block" segment, Cramer sounded off against the recent initial public offering of Manchester United ( MANU), saying investors should be fans of the soccer team but not a shareholder of the company.

Cramer said there's no denying that Manchester United is to soccer in the UK what the New York Yankees team is to baseball in the U.S. ManU is a mini-media empire, making money off tickets, merchandise, sponsorships and broadcasting. It's enough to get investors excited, said Cramer, which is why it's so worrisome.

The stock debuted on Aug. 10 at $14 a share, but it didn't pop higher -- instead closing at, well, $14 a share. The average IPO has risen 14% on its first day, noted Cramer. Since then, shares have fallen 8%.

But even with the decline, Manchester United still sells for a hefty 38 times earnings despite the fact it's only growing earning at 11% a year. Cramer reminded viewers he's willing to pay only twice a company's growth rate, or 22 times earnings, and that's a maximum.

Cramer said this stock is priced for perfection, and since its revenue depend on ticket sales along with food and merchandise, that means if the team has a bad year, so does the company. That adds a whole new level of risk, said Cramer, one he's not willing to take.

The company also has other issues, such as a balance sheet laden with debt and a dual-class share structure that gives common shareholders almost no voting power.

For all of these reasons, Cramer said investors need to steer clear of Manchester United at all costs.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer said he believes the iPad and the Kindle are both winners, and so are the stocks of ( AMZN) and Apple ( AAPL), a stock he owns for his charitable trust, Action Alerts PLUS.

Cramer said that while many perceive the tablet market as a zero-sum game, in fact there is plenty of room for more tablets and smartphones. What there is no room for are personal computers. Tablets and phones cannibalize all flavors of PCs, be they desktops, laptops, notebooks, netbooks or ultrabooks.

So when it comes to this next generation of devices, there's plenty of room for both players -- especially given that outside of Apple and Amazon, there really are so few real players.

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

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

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, AIG and ETP.

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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