Cramer's 'Mad Money' Recap: Investing Through Sandy

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NEW YORK ( TheStreet) -- Gone are the days when investors can trade off of news that's already happened. Those were Jim Cramer's thoughts to his "Mad Money" TV show viewers Monday, as he compared Hurricane Sandy's closure of the stock market to that of Hurricane Gloria in 1985.

Cramer said things were very different in 1985, when he was working as a broker for Goldman Sachs ( GS). He said back then, there was no CNBC or Internet, the news day started at 7 a.m. ET and most people got their stock news from the next day's newspaper. He said that no one had access to real-time quotes unless they were a broker.

That's why when Gloria slammed into the east coast, Cramer was able to think ahead and put his clients into companies that made the doors, windows, tools and lumber that would be needed to rebuild. That proved to be a wise move, as those stocks all popped in the days following the storm, as others read the news and also made the same connections.

But as Hurricane Sandy hits the same part of the country almost 30 years later, a lot has changed, noted Cramer. Today, everyone knows about Lowe's ( LOW) and Home Depot ( HD) and everyone has access to real-time information around the clock. Investors can make their own trades in today's markets, said Cramer.

So does that mean that investors can still make money investing in doors, windows and tools? Not a chance, said Cramer, because those stocks would've moved days ago, long before anyone even knew who Sandy was. The market is, in fact, ready to make money off of those late-comers to the hurricane trade. That's why investing, not trading, makes more sense than ever.

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Alan McKim, chairman and CEO of Clean Harbors ( CLH), one of the few companies making headlines Monday as it announced a $1.25 billion deal to acquire the privately held Safety Kleen. Shares of Clean Harbors are up 46% since Cramer got behind the company in June 2010.

McKim said Clean Harbors has crews standing by to assist companies cleaning up after Hurricane Sandy and will help everything from utilities to oil refineries get their services back online.

Turning to the acquisition, McKim said Safety Kleen is a leader in helping smaller companies with environmental services and has over 200,000 customers using its recycling and parts-washing services. He said the combined company will be less cyclical that Clean Harbors was on its own and they plan on continuing to use the Safety Kleen brand.

McKim said that the combined company, which will employ over 13,000 people, has lots of opportunities for margin improvements and other synergies.

Cramer continued his recommendation of Clean Harbors.

Going with Dollar General

Investors may not be able to trade off of Hurricane Sandy, but that doesn't mean they can't invest from it, Cramer told viewers, as he recommended Dollar General ( DG), the dollar store chain with over 10,000 locations and a stock he owns for his charitable trust, Action Alerts PLUS.

Cramer said that Dollar General may not seem like an obvious play for a hurricane, but when consumers are told to stock up, they stock up at Dollar General, which derives 70% of its sales from food and consumables, and also accepts food stamps. Dollar General is largest player in the space, has the best management and is also a consistent grower, noted Cramer.

Shares of Dollar General are some $15 off their highs based largely on weakness of its rival, Dollar Tree ( DLTR). Cramer said that while Dollar Tree cited higher gas prices as a problem, at Dollar General, consumers are more likely to trade down and buy more as gas prices rise. Dollar Tree also only gets 50% of its sales from food and consumables, meaning that more of its product mix is discretionary.

Cramer said that Dollar Tree has also been worried about increased competition from Wal-Mart ( WMT), and its new, smaller-format stores, but those fears are overblown as the dollar stores will open far more stores than Wal-Mart's proposed 500 small store locations.

Trading at just 14.2 times earnings with an 18% growth rate, Cramer said that Dollar General is too cheap to ignore and he'd be an aggressive buyer of the stock.

Lightning Round

In the Lightning Round, Cramer was bullish on Gilead Sciences ( GILD), Celgene ( CELG), Darden Restaurants ( DRI), Norfolk Southern ( NSC), Union Pacific ( UNP), ConocoPhillips ( COP), LinnCo ( LNCO), CenturyLink ( CTL) and Phillips 66 ( PSX).

Cramer was bearish on Hewlett-Packard ( HPQ), Interoil ( IOC), Nuance Communications ( NUAN), United States Oil Fund ( USO), Alexion Pharmaceuticals ( ALXN) and Windstream ( WIN).

The Benefits of Aging

In his second "Executive Decision" segment, Cramer spoke with Debra Cafaro, chairman and CEO of Ventas ( VTR), a real estate investment trust that caters to private-pay housing for seniors. Shares of Ventas currently pay a 3.9% yield.

Cafaro said Ventas is definitely benefiting from America's aging demographics. She noted that the over-85 segment is now one of that fastest-growing segments of their market. Unlike some other senior-oriented REITs, Ventas derives 80% of its revenue from private paying individuals and gets 25% from high-end providers like Sunrise Senior Living ( SRZ).

Even with those positive trends, however, Ventas is only seeing occupancy at 90%. Cafaro said ultimately expects to see occupancy between 92% to 96%.

Dividends remain an important factor in Ventas' strategy to return capital to shareholders, said Cafaro, which is why the company has raised its dividend by 10% for the past 10 years. Ventas has also purchased an additional $1.7 billion in assets so far in 2012.

Cramer said that few companies offer yield, growth and rising revenue but Ventas is one of those companies.

No Huddle Offense

In his "No Huddle Offense" segment, sounded off on the futures markets, which were decidedly lower after it was announced that the markets would be closed during the hurricane.

Cramer said there was a time when a market closure would see the futures trade up, as that meant there would be mutual funds flush with cash chomping at the bit to buy more stocks when the markets reopened.

But not so in today's markets, where the election, fiscal cliff and global worries continue to weigh on sentiments, despite the fact that a hurricane has historically been a great catalyst to stimulate GDP growth.

That's why Cramer said he'd use the coming market weakness to buy stocks with great earnings and growth, names like Panera Bread ( PNRA), Verizon ( VZ), Honeywell ( HON) and Yahoo ( YHOO).

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

-- 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

At the time of publication, Cramer's Action Alerts PLUS had a position in DG.

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."

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