Cramer's 'Mad Money' Recap: Money Talks

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NEW YORK ( TheStreet) -- Money talks and statistics walk, Jim Cramer proclaimed on "Mad Money" Tuesday.

He sounded off against those investors who rely solely on month-old government surveys to make their investment decisions. "Cramer don't play that," he continued, offering Home Depot ( HD) as the perfect example of why looking in the rear-view mirror is no way to invest.

Cramer said that while the government's "latest" data show housing and hiring as still being weak, Home Depot reported a beautiful quarter, with a 4.8% increase in same store sales. The company noted that California and Nevada, two of the hardest-hit areas during the housing collapse, were among this quarter's biggest gainers, a sign that there's not only hiring going on, but also pent-up demand for housing.

Home Depot management said homeowners underwater on their mortgages typically spend $1,000 a year on home maintenance and repair, but those above water spend three times that amount. What's that say for Home Depot's future? Things are looking up, said Cramer.

Among the bright spots in Home Depot's quarter were big-ticket appliances. Think Whirlpool ( WHR) and General Electric ( GE), a stock he owns for his charitable trust, Action Alerts PLUS. There's also kitchen and bath, which is Fortune Brands ( FBHS) and Masco ( MAS). Also on the list, LED lighting, which means Cree ( CREE), and tools, which plays into Stanley Black & Decker ( SWK).

Cramer said he'd be a buyer of all those stocks, along with Home Depot itself, which is buying back more of its stock and will surely prosper as America's economy awakens once more.

Hot IPOs

IPOs have been on fire this year, Cramer told viewers because Wall Street has been giving money away to entice investors back to the market. That's why a stock like Tableau Software ( DATA) was able to book a 51% gain on its first day of trading last week and why two new IPOs this week are worth getting in on.

Cramer said that Channel Advisor, which will trade under the ticker ECOM, helps companies sell their wares through multiple channels like Amazon.com ( AMZN), eBay ( EBAY), another Action Alerts holding, and others. He said the software as a service company reminds him a lot of Salesforce.com ( CRM) because it charges monthly fees to use its platform.

Channel Advisor is currently operating as a loss, but the company has been accelerating revenue growth, which makes it worth a lot more than its expected $12 to $14 a share offering price. Cramer said the company could grow at 22% this year, making it worth at least 4.4 times sales, or $16 to $17 a share.

Also on the docket this week, exterior home products maker PlyGem, which will trade under the ticker PGEM. Cramer said this offering is less compelling, even though the housing market is on fire at the moment. He said if investors can get in on the IPO, the deal is worth it -- but he wouldn't pay more than $22 a share for the stock.

Executive Decision: Walter Robb

In the "Executive Decision" segment, Cramer spoke with Walter Robb, co-CEO of Whole Foods Markets ( WFM), the organic food giant that blew away estimates when it reported on May 7, delivering a three-cents-a-share earnings beat on a 13% rise in revenue and a 6.9% increase in same-store sales.

Robb said gross margins have been steadily increasing at Whole Foods and he feels the company's target of 1,000 locations may be conservative. Whole Foods currently has a three-year pipeline of new stores in the works and Robb said he's excited about the company's future prospects.

When asked about other tweaks and changes to the business model, Robb touted value and differentiation as the main drivers at Whole Foods. He said the company has increased the range of products it offers, has stepped up promotions and has kept pricing competitive. Customers appreciate the high standards Whole Foods offers, said Robb, and can trust its 30-year history.

Turning to the company's recent stock split, Robb noted that while the split doesn't change the fundamentals, it does create notable excitement around the stock, something which is only enhancing its shareholder base.

Cramer continued his recommendation of Whole Foods.

Lightning Round

In the Lightning Round, Cramer was bullish on Tractor Supply ( TSCO), Toll Brothers ( TOL) and AES Corp ( AES).

Cramer was bearish on iShares MSCI Mexico ( EWW).

Off the Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Bob Lang over the chart of online auctioneer eBay.

According to Lang's research, eBay's daily chart has a lot of noise, making it hard to interpret. The chart includes both the deadly head-and-shoulders pattern as well as the bullish reverse head-and-shoulders pattern and several erratic movements further muddying the waters. What Lang noted, however, is a bullish crossover in the MACD momentum indicator as well as a stock that's now above both its 50- and 200-day moving averages.

The weekly chart is easier to read. After a sizable rally in 2012, eBay has been trading sideways and consolidating, noted Lang, which is a good thing. The MACD is once again preparing to cross over to the upside, something that boded well for the stock in 2012.

Cramer said he agrees with the bullish technicals. He said more than half of eBay's profits stem from PayPal, which makes the company more of a payment processor than an commerce play. Trading at just 17 times earnings with a 15% growth rate, Cramer said eBay remains cheap with a positive outlook.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer told viewers that with the European economy close to a bottom, the time is now to buy shares of GE.

Cramer explained that so far the markets have not seen any solid evidence that there is indeed a bottom in Europe. But the anecdotal evidence is piling up, which bodes well for GE, which plays in many industries from aerospace to healthcare to power generation.

As large fund managers look for ways to get into Europe on the cheap, Cramer said GE will be the logical choice because the stock has a large float and has yet to make its move.

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 EBAY and GE.

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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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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