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NEW YORK (
TheStreet) -- Stick with the themes that are working, Jim Cramer said Tuesday on
"Mad Money." Cramer said the "sell in May" crowd has been totally wrong, and his latest top-five, big-market themes prove it.
Cramer said housing remains the biggest sweet spot for the markets and he likes the upcoming IPO on
William Lyons Homes as well as
Radian Group (
RDN) in the mortgage insurance space.
Oil was Cramer's second market sweet spot, with
EOG Resources (
EOG) still his favorite pick in that group. He also blessed
Ensco (
ESV), a stock he owns for his charitable trust,
Action Alerts PLUS. Next up were the airlines, with the lack of competition and stable fuel prices helping to aid that sector. Cramer said US Airways ( LCC) remains his top pick in this red-hot sector. Fourth on the hot list is biotech, with Cramer's favorite "four horsemen" of Celgene ( CELG), Gilead Sciences ( GILD), Biogen Idec ( BIIB) and Regeneron ( REGN), leading that sector to new heights. He also once again mentioned Quintiles Transnational ( Q) as a new favorite in the group. Finally, there's cloud computing and mobile devices. Cramer said this sector is led by Netflix ( NFLX), a company that, despite 20% of its shares being sold short, continues to rocket to new highs. Cramer said investors who pick from any of these groups will be handsomely rewarded. Executive Decision: Nick Debenedictis
In the "Executive Decision" segment, Cramer sat down with Nick Debenedictis, chairman, president and CEO of Aqua America ( WTR), the water company that just increased its dividend by 9% to a 2.3% yield after delivering another strong quarter. Debenedictis said that when it comes to value, Aqua America still provides some of the least expensive water available. He said his company is expanding into providing water for the energy industry but there is still lots of potential in its core business of privatizing water delivery for local municipalities. Debenedictis noted that while some states have proven to be more progressive in this area, for many municipalities keeping up with Environmental Protection Agency regulations is proving to be a losing battle. Aqua America is also leading the charge in being green, noted Debenedictis, who said three of the company's plants have converted to solar power. He said that for long-term investments like water, solar is cheaper than any other alternative. Aqua America is also working on converting all of its vehicles to use compressed natural gas, another cost-saving and eco-friendly move.
When asked about growth, Debenedictis said Aqua America is still investing heavily in infrastructure and will spend over $330 million this year, making it one of the largest buyers of pipes in the country.
Cramer said Aqua America continues to deliver on all fronts -- growth and dividends -- for its shareholders.
What's Driving Tesla?
So what's the real reason that shares of
Tesla Motors (
TSLA) have been able to rally over 49% in just a single week? Is it the company's highly rated automobiles or its surprise earnings? Cramer said it's neither of those, but a simple market short squeeze.
Cramer said Tesla CEO Elon Musk did everything a CEO should do on the company's conference call to help combat the 40% of its shares that were sold short before its earnings. He said the company beat on earnings, beating even the "high man," the analyst with the highest earnings estimates. Then Tesla announced it's building more cars to meet demand and is making more money on each of those cars its producing.
But above all else, Cramer said Musk noted that Tesla is in strong financial shape and therefore won't be doing a secondary offering of stock anytime soon.
With so many fund managers betting against the stock, there was simply no place for all of them to hide when the mountain of positive news came out, Cramer explained. Given the fact that brokers retain the right to close out short positions anytime the supply of stock dwindles, many of those managers found their positions being closed at any price possible.
It's a classic short squeeze, Cramer explained. That's the only way a stock can be propelled that high, that fast.
Lightning Round
In the Lightning Round, Cramer was bullish on
Southern Company (
SO),
Dominion Resources (
D),
Duke Energy (
DUK),
AOL (
AOL),
Opko Health (
OPK) and
Pinnacle Foods (
PF).
Cramer was bearish on
PennyMac Mortgage (
PMT).
Executive Decision: Maurice Taylor
In his second "Executive Decision" segment, Cramer sat down with Maurice Taylor, chairman and CEO of
Titan International (
TWI), the agricultural tire company that delivered earnings 1 cent a share shy of expectations on revenue up 24% year over year.
Taylor said he remains upbeat on both Brazil and Russia because both of those countries have the land mass, the people and the desire to mechanize their farming industries. That compares to a country like China, he said, that despite its best efforts still only has three tractors per 1,000 farmers.
Taylor also spoke on the political state of affairs here in the U.S. He said our country is no longer controlled by people who take charge but by politicians who do nothing but talk and take no action. He said our country is full of hard-working, middle-class tradesmen and women who are eager to go to work and earn a living, yet our country gives favored nation status to countries like China and lets them do whatever they want.
When asked to name a country that's doing things right politically, Taylor named Switzerland as a small but efficient country that takes care of its labor force. No one beats America, however, once we get out of our own way, he concluded.
Cramer remains bullish on Titan.
Off the Charts
In the "Off The Charts" segment, Cramer went head to head with colleague Toni Hansen over the charts of
Atlas Pipeline (
APL) and
Enbridge Energy (
EEP), two oil pipeline MLPs with dividend yields of 6.1% and 7.2%, respectively.
According to Hansen's analysis, after two years of trading sideways the chart of Atlas now shows a classic cup and handle pattern, meaning a rally is close at hand. She indicated that once clear of the $40 resistance level, this stock should be off to $45 and even $50 a share. Atlas displayed a similar pattern between 2001 and 2003, she noted.
Enbridge Energy also displayed a similar pattern, with two waves of corrections that formed a bullish "W" pattern. She noted that this stock, too, is poised for a breakout to the upside and would be a buy above $30 a share.
Cramer said he agrees with Hansen's research, saying the the fundamentals in the oil and gas business in America remain strong.
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:
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