Cramer's 'Mad Money' Recap: Looking for Real Leaders

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NEW YORK ( TheStreet) -- This market needs leadership, but not reckless leadership, Jim Cramer cautioned his "Mad Money" TV show viewers Thursday. He said now is the time when investors need to stay focused because the markets may now be due for a pause.

Cramer explained that the market's big move in recent weeks started off well enough, with high-yielding dividend stocks leading the way. Those stocks were followed by the food, drug and beverage names, also great companies. Then the transports and technology names rallied, he said, followed most recently by the industrials, oils and mineral stocks. That was all well and good, until yesterday.

Yesterday and today saw big moves in Micron Technology ( MU), which rallied over 4% despite being a second-tier semiconductor company. Boston Scientific ( BSX) was also up big, despite that company being an also-ran. These are not stocks that should be leading a rally, said Cramer.

Other stocks with huge moves included Tesla ( TSLA), a stock with 46% of its shares currently sold short. Green Mountain Coffee Roasters ( GMCR), another hotly contested stock, saw its shares up 27%, along with Barnes & Noble ( BKS), a company Cramer called the best house in a terrible neighborhood.

Cramer said it's certainly possible to be intellectually right on names like these while at the same time being practically wrong -- as many of the shorts found themselves over the past two days -- but moves likes these seem "frothy" he said, and could be indicative of an imminent pullback.

"This market needs to cool down," Cramer concluded, or these moves simply won't last.

Executive Decision: Joseph Papa

In the "Executive Decision" segment, Cramer sat down with Joseph Papa, chairman and CEO of Perrigo ( PRGO), a company that just delivered a two-cents-a-share earnings miss on what was perceived as lighter-than-expected revenue. Shares of Perrigo are up 152% since Cramer first recommended the company in February 2010.

Papa said he's excited about his company's 18% growth in the quarter, along with its 20% growth in its health-care product division. He said Perrigo's entrance into pet care products has been a big win for consumers, retailers and his company, with Perrigo products now available in our country's largest pet care chain, PetSmart ( PETM).

Turning back to human products, Papa said consumers are realizing that all of Perrigo's products meet the same Food and Drug Administration standards as the national brands but cost 25% to 30% less. That's why 91% of people who try a store brand or private label product stay with that product. It's also a boon for retailers, Papa said, because they can enjoy higher margins.

Papa explained that one of Perrigo's successful tactics has been, of all things, packaging. He said by making packaging similar to that of the national brands, consumers are encouraged to compare, which begins the process of giving Perrigo products a try.

When asked about catalysts for the second half of the year, Papa touted his company's generic product for the popular Mucinex. He said that product, in all its variations, will be a big driver for next year's cold and flu season.

Cramer said with so many good things happening at Perrigo, investors need to look beyond the negative headlines.

Executive Decision: Matt Roberts

In a second "Executive Decision" segment, Cramer spoke with Matt Roberts, president and CEO of OpenTable ( OPEN), the restaurant reservation system that last week posted a two-cents-a-share earnings beat on a 15% rise in revenue. Shares of OpenTable are up 28% since Cramer last spoke with Roberts in February 2012.

Roberts had a positive story to tell, saying dinner seating was up 28% for the quarter and the company's mobile offerings have been "massively positive" for reservations. He said OpenTable still only accounts for 15% of all reservations in North America, leaving a lot of room for growth.

When asked about some of the negatives raised by analysts, Roberts explained that sales in the UK have not been strong, but they're also not a big headwind. He also disputed the notion that his sales force is becoming less productive. He said sales are seasonally weak this quarter, but there are no problems with his sales force overall.

Finally, when asked why restaurants would be willing to share their revenue with OpenTable, Roberts explained OpenTable offers an amazing return on investment for restaurants, including the ability to remember diner preferences like gluten-free or booths versus tables. In addition, OpenTable makes it easy, and less embarrassing, to cancel a reservation, giving restaurants the ability to get that table back compared with having a no-show.

Cramer said he's not believing the skeptics in this stock and feels OpenTable has a bright future.

Lightning Round

In the Lightning Round, Cramer was bullish on SunTrust Banks ( STI), Crosstex Energy ( XTEX), ARM Holdings ( ARMH), Biogen Idec ( BIIB), Nokia ( NOK) and FirstEnergy ( FE).

Cramer was bearish on Teva Pharmaceutical ( TEVA) and Mondelez International ( MDLZ).

Profitable Breakups

Breaking up is not only easy to do, it's profitable, too, and Cramer has the numbers to prove it. He recapped some of the most notable corporate breakup stories he's recommended over the past few years.

Cramer said when the old American Standard split itself up in February 2007, it unlocked $4.4 billion for shareholders, a 36% gain. The old Tyco ( TYC) split itself into three companies shortly thereafter and took its enterprise value from $68 billion to $86 billion in just 18 months.

Cramer also mentioned Altria ( MO), which spun off Kraft ( KFT) in 2007, which in turn split itself into two. Combined, the enterprise value more than doubled, he noted, and that's not including dividends.

More recently, Cramer recommended Marathon Oil ( MRO) and ConocoPhillips ( COP), which saw its shares pop 30% and 29%, respectively. There were also gains in several others, including Covidian ( COV), Abbott Laboratories ( ABT) and News Corp ( NWSA).

In all of these cases, the stock rose on the news of the breakup and kept rising after the breakup occurred. This is not speculation, Cramer concluded, it's a tried and true strategy for success.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer said Yelp ( YELP) and Groupon ( GRPN) are hot once again, but he remains a skeptic.

Cramer said that while the metrics seem to be moving in the right direction for both of these companies, neither still has any earnings. Both companies are benefiting from a strengthening consumer as well as growth in mobile devices.

But with Groupon's international business still lagging and Yelp's valuation now sky-high, Cramer said there's little reason to own either stock.

"Nothing is assured in tech," Cramer concluded, so investors need to be careful.

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 COP.

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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