Cramer's 'Mad Money' Recap: Next Week's Game Plan

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NEW YORK ( TheStreet) -- Eight years ago today, Jim Cramer took to the airwaves of CNBC with a mission, to give regular investors unbiased investing advice.

Friday, eight years later, Cramer wasted no time on his "Mad Money" TV show to give those same investors his take on next week's trading.

Cramer said that next week will be controlled by the Federal Reserve meeting on Wednesday. If the bears are to be believed, he said, the Fed will stop its bond buying and begin selling, signaling the end of economic prosperity as we know it. But, as Cramer continues to preach, if the Fed says things are getting better then, well, investors should take that as things are getting better.

Beyond the Fed, Cramer said he'll be watching Dell ( DELL) on Monday. He told viewers that Dell must be sold on Monday because the company's cash flow is slowing dramatically -- if not for a potential deal to take the company private, Dell would be trading at $8 a share.

"Dell is too dangerous," Cramer said, as is owning anything related to the PC.

Tuesday brings the February housing starts, a number that should be welcome news for housewares retailers Williams Sonoma ( WSM). Also on Tuesday, uniform giant Cintas ( CTAS). Cramer said bullish news from Cintas would be bullish news for employment.

Then on Wednesday, it's FedEx ( FDX) and Jabil Circuit ( JBL) reporting. Cramer said FedEx will provide a highly accurate look at the global economy, while Jabil is just plain cheap and should be bought.

Turning to Thursday, it's Lululemon ( LULU), an athletic apparel retailer that Cramer said should be approached with caution, and Nike ( NKE), another athletic giant that Cramer said he'd take a pass on. Cramer was bullish on Ross Stores ( ROST), however, saying that Ross is at the right spot to be bought.

Finally on Friday, Darden Restaurants ( DRI) reports along with Tiffany ( TIF). Cramer said that Darden continues to "fail upwards," but he would be a buyer of Tiffany on any weakness.

Speculation Friday

For "Speculation Friday," Cramer highlighted the dry bulk shipping sector, a group that's been in a hideous over-capacity situation for the past six years. After such a sizable decline, Cramer said day rates for ships have gotten so low that shippers are opting not to sail rather than sailing for so few profits, and that signals the bottom for the industry.

In addition to day rates finally stabilizing, Cramer said the dry bulk shippers are also scrapping old ships at a faster rate than they're buying news ones, which is helping to bring down supply and raise rates for the remaining fleet. So good are the shippers, said Cramer, that he's willing to recommend Nordic American Tanker ( NAT) in the tanker group, which now yields 6.7%.

But in the dry bulk group, Cramer said that Diana Shipping ( DSX) is his favorite, as the company has less leverage than its competitors and is buying up ships that once cost $155 million for just $34 million today. While many shippers are struggling with the continued low rate, Diana has stability, as it locked in 92% of its sailing days with one to two year contracts.

Cramer said that shares of Diana are just off their highs, but they're still trading for a 4.5% discount to the company's net asset value.

Beating the Averages

The goal of investing isn't to just keep up with the major averages, it's to beat them handily, Cramer reminded viewers. That's why while many money managers will tell you to invest in index funds, Cramer has a different strategy -- investing in individual high-quality stocks.

How did Cramer do against the averages? The S&P 500 is up 52% over the past eight years since "Mad Money" has been on the air, but Cramer highlighted eight stocks that have done a whole lot better.

Of the stocks that were big enough to talk about eight years ago, Priceline.com ( PCLN), the king of online travel, tops the list with that stock up 3,133% over the past eight years. Coming in a close second was Regeneron ( REGN), which Cramer recommended at just $5 a share. That stock has soared 2,780%.

Next on the list was Netflix ( NFLX), up 1,882%, and NewMarket ( NEU), up 1,587%. Cramer said he's long been a fan of Netflix, while he's been remiss in neglecting to mention NewMarket.

Also making the list were two orphan drug makers, Alexion Pharmaceuticals ( ALXN) and Biomarin ( BMRN), up 1,579% and 1,197% respectively. Rounding out the top eight were Salesforce.com ( CRM) and Core Labs ( CLB), which still managed to eek out a 1,046% gain over "Mad Money's" lifetime.

These are just a few examples of how a well-diversified portfolio can trounce the averages, said Cramer, but only if individuals ignore the pessimists and believe in their own abilities.

Lightning Round

In the Lightning Round, Cramer was bullish on Cheniere Energy Partners ( CQP), Cheniere Energy ( LNG), Public Storage ( PSA) and Winnebago Industries ( WGO).

Cramer was bearish on Skyworks Solutions ( SWKS), Extra Space Storage ( EXR) and Sequenom ( SQNM).

Checking Out Merck

Now may be the time to swap out of some of the high-flying big pharma names and into one of the group's biggest laggards, Merck ( MRK), which now yields 3.9%.

From bad clinical trial data in December to delayed drug applications just last month, Cramer said Merck has received an awful lot of bad news in a very short period of time -- news that explains why the stock has been lagging Pfizer ( PFE) and Celgene ( CELG). But now that the bad news has past, Cramer said it's time for Merck shares to play catch-up.

Merck still has a strong HPV vaccine business as well as a strong animal health division, noted Cramer. The company has a strong pipeline of new drugs, with a total of 16 in late-stage Phase III testing and another 20 in early-stage Phase I and II testing.

With the stock trading at just 11.6 times next years' earnings, Cramer said March could see an easy pop of $10 a share or more now that the bad news is behind them.

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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 no position in stocks mentioned.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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