Cramer's 'Mad Money' Recap: Bet on the Thoroughbreds

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NEW YORK ( TheStreet) -- The dogs will remain dogs, but the thoroughbreds are still worth betting on. That was Jim Cramer's assessment of the Dow Jones Industrial Average going into 2013.

Cramer told his "Mad Money" viewers Thursday that 2013 should be a lot better than 2012 for the Dow, and he gave a quick assessment of all the Dow stocks to show why.

Starting from the best performers in 2012, Cramer said that Bank Of America ( BAC) remains cheap, despite its 108% gain last year. Bigger gains will come, he said, as the housing recovery continues. Home Depot ( HD) continues to take market share, which makes that stock a winner as well.

Cramer said that Walt Disney ( DIS) can extend its 32% rally last year thanks to strong attendance at its parks and strong entertainment properties. And while he's not as bullish on JPMorgan Chase ( JPM), American Express ( AXP) and Travelers ( TRV), Cramer expects all three to still have a good 2013.

Cramer was also bullish on General Electric ( GE), a stock he owns for his charitable trust, Action Alerts PLUS , along with Pfizer ( PFE), 3M ( MMM) and United Technologies ( UTX), all stocks he said should be able to at least match last year's slow-growth performance.

His only bearish call in the slow-growth group, Wal-Mart, in the face of a weaker U.S. consumer going into 2013.

Cramer said AT&T ( T) will allow investors to sleep at night, while Cisco ( CSCO) should see its shares rise in 2013. Meanwhile, Merck ( MRK) needs a big catalyst to match its 8.6% performance last year and Cramer doesn't see one.

He felt Verizon ( VZ) will likely play catchup this year, while United Healthcare ( UNH) will do poorly without job creation.

Then there were the dogs of the Dow, the under-performers. Cramer was bullish on Johnson & Johnson ( JNJ) and IBM ( IBM), another Action Alerts PLUS name, and felt that Coca-Cola ( KO) should be able to beat its 3.6% gain in 2012, as should Boeing ( BA) given the aerospace cycle. His only worry is Microsoft ( MSFT), a stock he said is "hard to love."

Cramer was lukewarm on Exxon Mobil ( XOM) and Chevron ( CVX), but gave Chevron, an Action Alerts PLUS name, the edge. He was bearish on Alcoa ( AA) and DuPont ( DD) and said he doesn't trust McDonald's ( MCD).

Cramer made an exception for Caterpillar ( CAT), calling that dog of the Dow undervalued, but rounded out the group by saying that Intel ( INTC) will likely remain flat in 2013 and the worst performer, Hewlett-Packard ( HPQ) could only save the averages by being booted from them, even with it's 44% loss for 2012.

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Charif Souki, chairman and CEO of Cheniere Energy ( LNG), a company that plans to export U.S.-born natural gas to the rest of the world. Shares of Cheniere are up 147% since Cramer first spoke with Souki in June 2011, and 18% since his last visit in September.

Souki said it takes a lot of time and money to follow the rules and get approval to build an export terminal in the U.S., but that's what Cheniere has been able to do and why it will be the first to have an export terminal online in mid to late 2015, a full year ahead of schedule.

He said that while he expects others to follow in Cheniere's footsteps, his company's Louisiana facility will certainly be the first and will enjoy many years of successes.

Souki also expressed how urgent the need is to do something with our natural gas. He said gas is produced as a byproduct of producing more oil and, to date, the industry is simply "flaring," or burning off, more gas than it uses just to get rid of it. He said the practice is wasteful and bad for the environment, but it's being done more and more as our country struggles to do something with its energy policies.

Souki also confirmed that Cheniere is not in need of additional equity to complete its facility and thus won't be diluting shareholders with more equity offerings anytime soon. That news left Cramer speechless, as he said there are few companies he follows that have such an excellent story to tell.

A Deal That Sticks

In his second "Executive Decision" segment, Cramer spoke with Jeffrey Ettinger, chairman, president and CEO of Hormel Foods ( HRL), on the heels of the company's acquisition of Skippy peanut butter. Shares of Hormel are up 14% since Cramer recommended it in May 2012 and are flirting with their 52-week highs.

Ettinger said Hormel is emerging as a leader in the sandwich market and the company now has a strong presence three of the top four sandwich categories. He said Skippy will enhance Hormel's business model and he's confident in their projections for both growth and margins.

When asked how Hormel will be able to run Skippy better than giant Unilever ( UL), Ettinger said Hormel excels in niche areas and has proven it can hold its own against bigger competitors. Skippy also fits well into Hormel's international strategy, particularly in China.

Skippy also gives Hormel a bigger footprint into the healthy eating category, noted Ettinger, and fits into Hormel's plans to build a broad portfolio of brands that span multiple categories and channels. Ettinger said the Skippy deal was not a strain on his company's balance sheet and the company remains committed to its dividend and its long history of paying one.

Cramer called the Skippy deal "transformative" for Hormel.

Lightning Round

In the Lightning Round, Cramer was bullish on Whiting Petroleum ( WLL), Becton Dickinson ( BDX), Hain Celestial ( HAIN), Whole Foods Markets ( WFM) and Sprint Nextel ( S).

Cramer was bearish on Medtronic ( MDT), The Geo Group ( GEO), Mako Surgical ( MAKO), Amarin ( AMRN) and Clearwire ( CLWR).

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: Starbucks ( SBUX), Facebook ( FB), Apple ( AAPL), McDonald's ( MCD) and Pandora ( P).

Cramer said that he's not a fan of McDonald's or Pandora and would add an industrial and a health-care or drug stock to complete this portfolio.

The second portfolio's top holdings included: 3D Systems ( DDD), Chicos ( CHS), United Rentals ( URI), Neustar ( NSR) and Wells Fargo ( WFC).

Cramer advised selling Neustar and adding a health-care stock in order to diversify this portfolio.

The third portfolio had: KeyCorp ( KEY), Cheniere Energy ( LNG), Valero Energy ( VLO), Jarden ( JAH) and SPDR Gold Shares ( GLD) as its top five stocks.

Cramer said this portfolio has too much energy with Valero and Cheniere so he once again advised selling Valero in favor of a health-care stock.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer reminded viewers that while most retail stocks are cheap, only a few are worth buying.

Nordstrom ( JWN) remains outstanding, while both Ross Stores ( ROST) and Target ( TGT) delivered stronger than expected results.

Cramer said Gap Stores ( GPS) remains a favorite after the company's brilliant acquisition, but the dollar stores, like Family Dollar ( FDO), are getting squeezed hard.

"Don't bottom-fish," warned Cramer, as retail remains as dicey an investment as ever.

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

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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, CAT, CVX, DD, GE, IBM, KEY, KO, SBUX, UTX and WFC.

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