Cramer's 'Mad Money' Recap: A Hope-Filled Rally

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NEW YORK ( TheStreet) -- Today was a rare glimpse into what the stock market could look like if politicians would only compromise, Jim Cramer told "Mad Money" TV show viewers Monday after a strong rally on Wall Street.

Cramer said if the fiscal cliff was averted there would be a whole laundry list of stocks worth buying.

Other than the oil and gas stocks, which rose on troubles in the Middle East, and the materials stocks, which rose on a hopes of a Chinese recovery, Cramer said just about everything else rose on the promise of compromise in Washington.

Those stocks included the home improvement players Lowe's ( LOW) and Home Depot ( HD), as well as just about everything that fills their aisles, from Sherwin-Williams ( SHW) paint to Whirlpool ( WHR) appliances.

But Cramer noted that others would benefit from a fiscal resolution, not the least of which would be discretionary stocks Harley-Davidson ( HOG) and Polaris Industries ( PII), along with high-end retailers including Coach ( COH).

Also on Cramer's fiscal cliff shopping list were stocks that reported great earnings such as Petsmart ( PETM) and those that have big gains for the year including Apple ( AAPL), a stock he owns for his charitable trust, Action Alerts PLUS.

Cramer said the dividend stocks would also benefit. AT&T ( T) and Verizon ( VZ), came to mind, along with master limited partnerships such as Kinder Morgan Energy Partners ( KMP)

Others teetering on the cliff included Lockheed Martin ( LMT), a company that would be hit twice because of its defense nature and its big dividend, and Boeing ( BA), which has a big military component.

Cramer concluded by noting that even software maker Intuit ( INTU) is a fiscal cliff name because that company's TurboTax software will be in high demand as our tax code changes.

All of these stocks and more, Cramer concluded, would be sharply higher if our politicians would only do their jobs.

Revved Up on Briggs & Stratton

In the aftermath of Hurricane Sandy, many Americans have learned never to trust their local power grids. That's why stocks like Generac ( GNRC), a maker of standby generators, have rallied big since Hurricane Sandy struck.

But Cramer said Generac is now too expensive, which is why he likes Briggs & Stratton ( BGG), a maker of engines for generators as well as for a majority of lawn and garden equipment.

Cramer said Briggs is far from a pure play on generators because the company only derives 10% of its sales from them, but it does have many other factors pulling in its favor. He said the company reported a disappointing quarter on Oct. 18, in part from this season's drought, which curtailed many lawn and garden projects. But with the turn in housing at hand, Cramer said now might be bottom for the company.

Most lawn and garden equipment gets replaced every seven to eight years, he added, and with the peak in 2005, that replacement cycle should just be getting underway. Additionally, new environmental standards kick into effect Jan. 1, requiring outdoor engines meet tougher emission standards. That will do away with a lot of cheaper competition as only better engines will make the grade.

Briggs & Stratton has 40 new products hitting store shelves next year and has been aggressively cutting costs. It also sports a 2.5% dividend yield.

Driving the Market

The U.S. rental car market is back, Cramer told viewers. That's why Hertz ( HTZ) is up 26% for the year while Avis Thrifty ( CAR) has risen by 62%. Consolidation has been key in this industry, said Cramer, which is why there are now only four major players left standing.

Of the four, Cramer said Enterprise, the largest among them, is currently private, which leaves Hertz, Avis and ZipCar ( ZIP) as investable options. He said ZipCar remains a novel concept but unfortunately has nothing proprietary, which is why the company's stock has done nothing but fall since its initial public offering.

Both Hertz and Avis are cheap, said Cramer, trading at 7.2 times earnings for Hertz and 9.6 times earnings for Avis. But Cramer said that Hertz is the best thanks to the company's acquisition of Dollar Thrifty ( DTG).

Cramer said the Dollar Thrifty deal will give Hertz 10,000 locations in the U.S. and afford it 30% market share. The deal will also minimize the company's ailing European division, which currently accounts for 18% of sales.

In the rental game, Cramer said size matters, and the combined Hertz will be able to aggressively cut costs. He noted just a 1% reduction in costs could result in upwards of 31 cents a share in earnings for the company. He was also bullish on Hertz' equipment rental business given the turn in the U.S. housing market.

Lightning Round

In the Lightning Round, Cramer was bullish on Cheniere Energy Partners ( CQP), SPDR Gold Shares ( GLD), Anheuser-Busch InBev ( BUD), Diageo ( DEO) and 3D Systems ( DDD).

Cramer was bearish on OraSure Technologies ( OSUR), Cheniere Energy ( LNG) and Annaly Capital ( NLY).

No Energy on Using Natural Gas

Why doesn't America use its abundant supply of natural gas for surface vehicles? Cramer offered viewers his latest take on the situation after talking to many in the industry.

Cramer said there's no doubt using American natural gas would make North America energy-independent almost overnight. Unfortunately, there are still several major obstacles standing in the way.

It's clear Congress has no interest in adopting T. Boone Pickens' plan, which would have subsidized adoption of natural gas engines for long-haul trucks. That leaves the industry to go it alone, Cramer said, and Westport Innovations ( WPRT) has been delayed in delivering the next generation of long-haul natural gas engines.

Then there's the issue of infrastructure. Clean Energy Fuels ( CLNE) now has 600 natural-gas filling stations, far less than the 120,000 regular gasoline stations in the U.S. That's why only garbage trucks and buses have made the switch so far because they can refuel nightly at their depot rather than trying to find a station on the road.

Car companies don't see any demand to make natural gas cars, said Cramer, because home fueling options are still several years off and many consumers don't want to pay more up front to reap the rewards of lower operating costs later.

Cramer said only a presidential intervention -- such as mandating the U.S. Postal Service use natural gas, for example -- would be big enough to jump-start the industry. Otherwise, companies like Exxon Mobil ( XOM) will continue to stand in the way of making this clean, domestic fuel source a reality.

He's Got a Little List

In his closing comments, Cramer prepared a new "Wall of Shame: Fiscal Cliff Annex," a place to house members of Congress who are not prepared to rise above party politics and put the country's needs over their own personal political agendas.

He said some in Congress feel going over the cliff will cause the other side to fold in their negotiations, a view that Cramer called "a heartless way to prove a point."

As the crisis continues to evolve, Cramer said he's got his short list of candidates at the ready.

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-- 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 positions in AAPL and BA.

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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