Cramer's 'Mad Money' Recap: A Seller's Market

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NEW YORK ( TheStreet) -- Believe it or not, there's a shortage of stock for sale, Jim Cramer told "Mad Money" viewers Tuesday as he explained how a stock like EOG Resources ( EOG) can trade up 7.6% in a single day.

Cramer said that every day there is stock for sale at different price levels. For individual investors there usually aren't any problems finding someone selling a stock at a price near what they want to pay. But today's markets aren't driven by individual investors, he noted -- they're driven by the big boys, institutional investors managing huge pensions, mutual funds and hedge funds.

In order for the big investors to make a meaningful impact on their portfolios, they must buy in huge increments, said Cramer, to the tune of 200,000 shares or more at a time. These funds are under constant pressure to outperform both the averages and their peers, which means that funds often need to buy those 200,000 shares in a hurry.

So what happens when these managers begin looking for stock to buy? Cramer said they don't find blocks that large at the stock's current price, and quickly turn to higher and higher prices in order to complete their orders. As the price increases, more sellers come in. But in a hot market that's on the rise, even those sellers may be few and far between.

In the end, Cramer said a fund hoping to buy 200,000 shares at the current price can easily end up paying 7.6% more, which is exactly what happened with EOG by the end of today's session. That's why it's a seller's market, Cramer concluded, because there are simply more buyers than those willing to sell.

Executive Decision: Mark Papa

In the "Executive Decision" segment, Cramer learned more about today's big move in EOG Resources by speaking to Mark Papa, EOG's chairman and CEO, about the company's blowout quarterly results. Shares of EOG are up 55% since Cramer first recommended the company in August 2011.

Papa said that even he was surprised by the production growth his company saw in its Eagle Ford shale assets. He called the region a world-class oil field and one of the most important U.S. oil discoveries over the past 40 years.

Beyond the Eagle Ford, Papa said EOG's Bakken assets rivaled the growth in the Eagle Ford and is proving to be another huge opportunity for the company. As for the third leg of the stool, Papa said the recently discovered Delaware Basin is showing promise. While not as large as Eagle Ford or Bakken, it will prove to be very profitable for EOG.

When asked about the outlook for both oil and gas in the U.S., Papa said 2012 will prove to be the peak of oil production growth in our country and he expects growth to continue at a slower pace going forward. As for natural gas, Papa said he's slightly more bullish and feels that $4 to $4.50 will be a more rational price for that fuel going forward.

Finally, when asked about North American energy independence, Papa said he still feels the U.S. and Canada can become energy-independent by 2020, just seven short years from now. When that happens, he said, the entire economic outlook for the U.S. will change significantly.

Cramer said EOG continues to be a remarkable story.

Executive Decision: Don Knauss

In his second "Executive Decision" segment, Cramer sat down with Don Knauss, chairman and CEO of Clorox ( CLX), which today celebrated its 100th anniversary. Shares of Clorox are up 32.5% since Cramer last spoke to Knauss in March 2012, and currently yield 3%.

Knauss started off by saying that despite being 100 years old, bleach is still the most effective way to kill germs, both at home and in hospitals -- germs simply cannot adapt to the power of bleach. That's why as this year's flu season kicked off, Clorox was actively monitoring social media channels and sending more supplies of Clorox products to the zip codes that needed them most.

When asked about one of Clorox's other brands that hasn't done so well -- Kingsford charcoal -- Knauss explained that charcoal remains a seasonal business, with 60% of sales happening between March and June every year. That's why this year's unseasonably cold March, the coldest in a decade, sent sales plummeting.

Turning to the company's dividend, Knauss reiterated that Clorox is committed to both its dividend and its share-repurchase program as well as continuing to support its growth through reinvestment. He said the company's health and wellness strategy continues to do well as Clorox expands more into the commercial market at facilities including hospitals and acute-care facilities.

Cramer continued his support for Clorox.

Lightning Round

In the Lightning Round, Cramer was bullish on Clean Harbors ( CLH), RiteAid ( RAD), Calumet Specialty Products ( CLMT) and Clean Energy Fuels ( CLNE).

Executive Decision: Larry Young

In his third "Executive Decision" segment, Cramer sat down with Larry Young, president and CEO of Dr Pepper Snapple Group ( DPS), a stock that's just off its 52-week high after delivering a seven-cents-a-share earnings beat. Shares of Dr Pepper currently yield over 3%.

Young said that the key to Dr Pepper's success has been new products, which is why the company is seeing growth in its carbonated and non-carbonated businesses. These new products have also helped Dr Pepper respond to criticism over sugary drinks because they give consumers more choices.

When asked about the company's strategy, Young said his goal is to make Dr Pepper the best drink company out there, which is why it continues to focus mainly on North America and not overseas growth, and why the focus is on soft drinks and not snack foods or other categories. Dr Pepper had its IPO at the worst possible time five years ago, noted Young. Yet, despite the downturn, the company has built a fabulous team and reinvented itself to great success.

Dr Pepper is also responding to changing tastes, said Young. For instance, the company has reformulated Hawaiian Punch to remove much of the sugar and replace it with vitamins.

Cramer remained bullish on Dr Pepper.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer said it's easy to find the market's biggest gainers -- just look for the worst performers.

Cramer said after monumental disappointments last year, accessory maker Fossil ( FOSL) found it easy to trump expectations today, sending shares up big. The same was true for Abercrombie & Fitch ( ANF), another chronic under-performer that was able to catch an upgrade today.

Other stocks playing catchup include Textron ( TXT), FedEx ( FDX) and Genworth Financial ( GNW), Cramer concluded.

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."

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