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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,
Revved Up on Briggs & StrattonIn 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 MarketThe 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.