Cramer's 'Mad Money' Recap: Better Days for Europe

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NEW YORK ( TheStreet) -- The turn is Europe is now undeniable, Jim Cramer announced to his "Mad Money" viewers Monday. He said the turn in Europe will have a huge impact on U.S. stocks. However, so far absolutely no one is talking about it.

How did Cramer come to be so confident Europe's bottom has finally arrived? Because companies told him so in their conference calls. That was certainly the case with General Electric ( GE), a stock Cramer owns for his charitable trust, Action Alerts PLUS . After years of being hit with European woes, GE now says its seeing signs of life across the continent.

Management at Honeywell ( HON) noted that while it's not ready to declare victory in Europe, things are indeed getting better. Meanwhile, PPG ( PPG) said on its conference call that it, too, is seeing stability in Europe.

Cramer said this trend was confirmed by Ingersoll-Rand ( IR) and Johnson Controls ( JCI), along with non-industrial names like VF Corp ( VFC) and even Manpower ( MAN), which saw hiring pick up in France, Italy and even hard-hit Spain.

Cramer said the time is now to being investing in any of these names, but he prefers the Vanguard FTSE Europe ETF ( VGK), which offers exposure to them all.

Catching the White Wave

There's no denying that the organic and natural foods space has been on fire this year, with stocks like Hain Celestial ( HAIN) and Annie's ( BNNY) up 36% and 33% for the year, respectively. Even a newcomer to the space such as Fairway ( FWM) has rocketed 115% since its IPO early this year. But now all organic food stocks are treated equally, said Cramer.

That's certainly the case with White Wave Foods ( WWAV), the recent Dean Foods ( DF) spinoff that makes primarily premium dairy products like soy milk and coffee creamers.

While Hain Celestial trades at 25 times earnings with a 16.7% growth rate and Annie's trades at 26 times earnings with a 22.5% growth rate, White Wave has only managed to garner a 22.4 multiple despite its growth rate of 20%. That's far too low, said Cramer, given what this company can do.

Investors were not thrilled with the company's last earnings reported on May 9. While the company beat by 1 cent a share, revenue were light and analysts were able to nitpick among the company's other metrics. But Cramer said White Wave is a leader in its category and its category is just getting started.

Add that to the fact that White Wave shares have been held lower while its former parent sold off its position in the company and, Cramer said, the shares are now a coiled spring, waiting to shoot higher.

Cramer said White Wave deserves to trade among its peers, at 1.5 to 1.6 times its growth rate. Using that metric, White Wave should be trading at $26 a share, or a full 30% higher than where it does today.

Winners in the Oil Patch

The American oil revolution continues, Cramer told viewers. With the differential between West Texas crude and its international Brent crude counterpart dwindling, there will be even more big winners in the oil patch.

Cramer explained that for the past few years, West Texas crude has been selling at a discount because the lack of infrastructure has meant the crude simply couldn't get to where it needed to go. But the spread of $16 a barrel between the two benchmarks in January has all but vanished now because new pipelines and rail has finally allowed supply to meet demand. This is a game changer, if you know which companies benefit the most, Cramer said.

Those that don't benefit are the refiners, as they are now buying oil at the higher Texas prices. That means it's time to sell HollyFrontier ( HFC) and Marathon Oil ( MRO).

But the big winners include the exploration and production companies that are now able to sell their oil for $16 a barrel more. Those winners include Continental Resources ( CLR), Whiting Petroleum ( WLL) and Kodiak Oil & Gas ( KOG) in the Bakken shale and Concho Resources ( CXO) in the Permian Basin.

Cramer said it's even time to take another look at the oil tanker business with Nordic American Tanker ( NAT) because day rates for ships are finally on the rise now that Europe has bottomed and the U.S. economy slowly continues to improve.

Lightning Round

In the Lightning Round, Cramer was bullish on Ford Motor ( F), Halliburton ( HAL), Schlumberger ( SLB), Walt Disney ( DIS), Praxair ( PX) and Airgas ( ARG).

Cramer was bearish on Annaly Capital ( NLY) and Cooper Tire & Rubber ( CTB).

Off the Charts

Sequestration was supposed to kill the defense stocks, at least according to many of the bears. But that's why Cramer's mantra has always been "No one ever made a dime panicking." In his "Off The Charts" segment, Cramer went head to head with colleague Bob Lang over the chart of Northrop Grumman ( NOC), to show just how wrong everyone "in the know" was about what sequestration actually means for this giant defense contractor.

According to Lang's research, Northrop's weekly chart couldn't get any nicer. The stock has rallied all year on strong volume and the Williams oscillator has been pegged in the "overbought" category, meaning that investors have been clamoring for the stock no matter what the price.

Northrop's daily chart was also a thing of beauty, noted Lang, with a floor of support at $84 a share and virtually no ceiling of resistance as the stock ventures into new-high territory. The MACD momentum indictor also shows strong interest in the stock.

So what of the fundamentals? Cramer said that while sequestration may be killing off some government spending, it's certainly not affecting Northrop, which makes things like unmanned drones and other high-tech wizardry. The company has also been cutting costs and shedding low-margin businesses to to make it even more profitable in the given environment.

Given how all of the defense names from Honeywell to L-3 Communications ( LLL) to Rockwell Collins ( COL) are all up big, Cramer said that Northop may just be the best of the bunch.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer asked the question, what makes the perfect quarter? In a word, Schlumberger.

Cramer said the Schlumberger conference call "had it all," including a five-year plan for dividend growth and share repurchase, both revenue growth and margin expansion, innovation, international growth, a new spending cycle that has clients lining for more services and a company that has more service to offer those clients.

Add up all of these amazing positives, and Cramer said it's easy to see why investors took shares higher on Friday and again Monday.

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 F, GE and HON.

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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