Cramer's 'Mad Money' Recap: Good Earnings, Bad Market

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NEW YORK ( TheStreet) -- The market is allowed to go down, Jim Cramer told "Mad Money" viewers Wednesday. Sometimes, it even goes down for no good reason. That was the case in today's trading, he said, as many great companies saw their stocks fall despite reporting great earnings.

Cramer said there are still plenty of bears and naysayers abound spouting off a litany of totally credible reasons why the markets should be lower. Whether it's a weak economy, Federal Reserve policy, troubles in Europe, a slowing China, rising taxes or stocks that have simply run too much and are now too expensive, the bears always have a great argument. The only problem is, they've been wrong for the last 4,000 points.

The bears always seem smart, Cramer added, and they never seem to be proven wrong -- but that doesn't mean that investors should shy away from stocks. Cramer never advocates buying the markets as a whole, but rather picking only the very best stocks while steering clear from the very worst.

Stocks like Domino's Pizza ( DPZ) and Eaton ( ETN) have both recently appeared on "Mad Money" and had good stories to tell, said Cramer. Those stories haven't changed just because the investors decided to take some profits. In fact, just like merchandise at the mall goes on sale, stocks do as well, which is why today should be viewed as a buying opportunity and not as a reason to panic.

Cramer said he would certainly join the bears if there were indeed a change in Fed policy or major news out of Europe, but neither of those things happened today. And that's why stocks today are more valuable than they were yesterday.

Executive Decision: Rick Hamada

In the "Executive Decision" segment, Cramer once again sat down with Rick Hamada, CEO of Avnet ( AVT), the tech component supplier that delivered a three-cents-a-share earnings beat on better-than-expected revenue.

Hamada said that in the tech world no company can afford to stand still, which is why Avnet now considers uncertainty the new normal and is planning its business around that new standard. He said that his company is in the supply chain solutions business and is working closer with customers than they ever have before.

When asked how those customers are faring given the declines in PC sales, Hamada says he sees a mixed bag around the globe, with Asia on the mend and Europe close to stabilizing. He said once those markets return to growth, Avnet will be well-leverages to take full advantage.

Turning to new technology, Hamada says the new revolution won't be phones or tablets, but an Internet of things and devices, all of which will require continued investments in infrastructure to support the next wave of new applications.

Finally, when asked about his company's planned use of cash, Hamada said Avnet is always looking for acquisitions, but they are also committed to its share repurchase program given how inexpensive their stock has become.

Executive Decision: Jim Griffith

In his second "Executive Decision" segment, Cramer spoke with Jim Griffith, president and CEO of Timken ( TKR), a stock that's up 30% since Cramer visited the company in Ohio in October of last year.

Griffith said that despite a weaker-than-expected second quarter, he's still bullish for growth in the second half of 2013. He said that his company's business in China is beginning to pick up, something that will benefit them greatly over the rest of the year.

When asked to comment on the analysts calling for the company to split itself in two, Griffith said that those analysts simply don't think Timken's growth is sustainable and are therefore giving the company a far lower multiple. He said those who take the time to understand the company realize that Timken is not just about making steel, they in fact use proprietary technology to create value for their customers. That's why Timken had record profitability in 2012, he added.

When asked for more clarity on the company's China operations, Griffith said Timken does $300 million in sales from China and $40 million of that comes from U.S. steel that's exported to China. He noted that if the company were to split itself into two, it would lose the synergies and relationships that allow it to be one of the few companies that actually imports into China.

Cramer said he is a believer in Timken and suggested the analysts go pick on companies that are not profitable rather than Timken, which is doing a fabulous job for its shareholders.

Lightning Round

In the Lightning Round, Cramer was bullish on Pulte Homes ( PHM), Martin Midstream Partners ( MMLP), Workday ( WDAY), Expedia ( EXPE), ( PCLN), Kroger ( KR), Goldman Sachs ( GS) and TJX Companies ( TJX).

Cramer was bearish on Safeway ( SWY), Tumi Holdings ( TUMI) and Anheuser-Busch InBev ( BUD).

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: Johnson & Johnson ( JNJ), Southern Company ( SO), Pepsico ( PEP), Wells Fargo ( WFC) and Merck ( MRK).

Cramer advised selling Merck and adding an industrial stock like Eaton.

The second portfolio's top holdings included: Ford ( F), CMS Energy ( CMS), Adobe ( ADBE), Unitedhealth Group ( UNH) and Lockheed Martin ( LMT).

Cramer said that this portfolio was perfectly diversified.

The third portfolio had: CVS Caremark ( CVS), Isis Pharmaceuticals ( ISIS), Qualcomm ( QCOM), Allison Transmission ( ALSN) and Nike ( NKE) as its top five stocks.

Cramer also blessed this portfolio as diversified.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer reminded viewers that when it comes to the drug stocks, earnings don't matter, pipelines do. That's why a company like Merck can offer to buy $15 billion worth of its own stock, 10% of the company. Merck currently has 35 drugs under development and is confident that its future will be far brighter than where its shares trade today.

The same rule applied to Allergan ( AGN), which fell 13% on news that one of its biggest pipeline drugs will be delayed, news that sent competitor Regeneron's ( REGN) shares up 10%.

Still other drug stocks, like Eli Lilly ( LLY), Pfizer ( PFE) and Bristol-Myers Squibb ( BMY), saw their shares do little after they reported, Why? Because their pipelines just aren't very exciting at the moment.

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 a position in BMY, ETN, GS, JNJ, MRK, TJX and TKR.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 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, 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, 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 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, 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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