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NEW YORK ( TheStreet) -- There are exceptions to every rule, Jim Cramer told his "Mad Money" TV show viewers Wednesday. When it comes to the stock market, everything is most definitely not rational. Cramer said the industrial stocks continue to soar despite having nothing new to say. Meanwhile, Johnson & Johnson ( JNJ) saw its shares barely dinged despite cutting estimates. In the tech sector, investors continue to pile into stocks like Amazon.com ( AMZN) and LinkedIn ( LNKD), two stocks that don't seem to be constrained by traditional metrics, said Cramer. And then there's Apple ( AAPL), a stock Cramer owns for his charitable trust,
Know Your IPOIn the "Know Your IPO" segment, Cramer highlighted Zoetis, the animal health division of Pfizer ( PFE), which is expected to offer 86.1 million shares next week between $22 and $25 a share. Cramer said that Zoeits plays into the $22 billion animal health market, in which it currently has a 19% share. The new company makes everything from vaccines to feed additives and will derive 65% of its revenue from livestock and the remaining 35% from horses and household pets. Cramer noted that unlike the human health-care market, most animal patient bills are paid out of pocket. When it comes to drugs and vaccines, there is far less generic competition. Given the stock's expected valuation and growth rate of 6%, Cramer said he expects Zoetis to have 20% upside from its IPO.
So should investors sell Pfizer to buy Zoetis? Cramer said absolutely not! Pfizer will retain 80% of Zoetis after the IPO and will be using the proceeds to reward shareholders with a sizable stock buyback. In addition, the split companies will both receive higher market valuations as individual companies are easier for analysts to value. Cramer said he would get in on the Zoetis IPO if possible, but noted that existing Pfizer shareholders will also do quite well in 2013.
Riding the RailsThere's a bull market roaring on America's rails, Cramer told viewers, but that doesn't mean investors should jump into just any rail stock. He said while railroad operators CSX ( CSX) and Norfolk Southern ( NSC) have all posted terrific results, it's the rail car makers that represent the most value. Specifically, the demand for tanker cars has been red-hot as the American energy renaissance has created the need for thousands of new tankers. Other industries need them, too, to move everything from chemicals to corn syrup. The railroad business is highly cyclical, Cramer warned, which means that if the economy falters, this group will be hit hard. But if America continues to recover, then the rail car makers is the place to be. Of the four major players, Cramer said that American Railcar ( ARII) is his favorite, as the company gets 20% of sales from tankers and it offers a 2.8% dividend. Next on the list would be Trinity Industries ( TRN), which also gets 20% of revenue from tankers. Unlike American, Trinity has exposure to other industries such as barges and windmills, which makes it more risky. Cramer said he'd avoid FreightCar America ( RAIL) because that car maker has a lot of exposure to the weak coal market. He is also not a fan of Greenbriar ( GBX).
Lightning RoundIn the Lightning Round, Cramer was bullish on EOG Resources ( EOG), Westar Energy ( WR), Morgan Stanley ( MS), Duke Energy ( DUK), Masco ( MAS), Healthcare Trust of America ( HTA) and Travelers Companies ( TRV). Cramer was bearish on Isis Pharmaceuticals ( ISIS), Nuance Communications ( NUAN) and Genworth Financial ( GNW).
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: Armour Residential ( ARR), LinnCo ( LNCO), Nordic American Tanker ( NAT), Banco Santander ( SAN) and Vodaphone ( VOD). Cramer said this portfolio was "perfection" when it comes to diversification. The second portfolio's top holdings included: Ford ( F), Dana Holding ( DAN), Smith & Wesson ( SWHC), Alcoa ( AA) and KeyCorp ( KEY). Cramer advised selling Dana and adding a drug company to properly diversify this portfolio. The third portfolio had: Chicago Bridge & Iron ( CBI), Eaton ( ETN), HollyFrontier ( HFC), Penske Automotive ( PAG) and Westport Innovations ( WPRT) as its top five stocks. Cramer said he'd allow Westport and Penske in the same portfolio assuming Westport is considered a speculative stock.