Jim Cramer's 'Mad Money' Recap: Here's Where Money Managers Should Put Their Money

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NEW YORK (TheStreet) -- "Give me a good thesis and I'm a buyer," say the money managers, according to Jim Cramer. He said on Mad Money Monday the money managers are desperate for new ideas and need to put their money to work. Fortunately, the markets are giving them plenty to like.

Technology is a logical place money managers look, Cramer explained. Apple (AAPL) shares are rising, and that's good news for Skyworks Solutions (SWKS) , Western Digital (WDC) and Sandisk (SNDK)  along with Cisco Systems (CSCO) .

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What about the Internet stocks and social media? All of the restaurants and retailers are moving their advertising to the Web, which makes Facebook (FB) and Google (GOOGL) , two stocks Cramer owns for his charitable trust, Action Alerts PLUS, a safe bet.

Many investors have given up on the banks, Cramer said, but stocks like Bank of America (BAC) , another Action Alerts PLUS holding, up only 10% for the year, show the whole banking sector remains very cheap.

Cramer said money managers also have a lot to like in health care, with Cardinal Health (CAH) and biotechs like Celgene (CELG) leading the charge. Even the industrials are inexpensive, Cramer said, and the expectations for that group remain very low.

As for energy, the energy stocks have been getting pummeled, but one would have to believe that OPEC will be cutting oil production soon and allowing a floor to develop in the oil patch.

Add all these positives and you've got a recipe for higher stock prices going into 2015, Cramer concluded.

Defending Dow

What does a CEO have to do to quell the discontent of activist shareholders? That was the question Cramer posed after hearing that Dow Chemical (DOW) is yielding two of its board seats to activist investor Dan Loeb's hedge fund.

Cramer called the smear campaign to obtain these board seats vicious and totally uncalled for. Dow, an AAP holding, is up 18% so far in 2014 and is leading the chemical sector higher.

While it's true that Dow stumbled during the onset of the recession and did cut its dividend, a move its CEO said would never happen, Cramer noted Dow has been climbing for the past three years and has done a remarkable job restructuring, boosting its dividend and buying back its own stock.

Cramer said in the old days, when a hedge fund didn't like a company it sold the stock. Nowadays, the hedge funds are powerful enough to force change, even if change is not warranted. Activsts are going after Zoetis (ZTS) , a stock that's up 36% in 2014, and Pepsico (PEP) , up 19%. Why not go after Coca-Cola (KO) , which is only up 7% and shows no signs of turning around, Cramer asked?

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Buying L Brands

Just because fewer people are shopping at your local mall doesn't mean that every mall retailer is suffering, Cramer told viewers. That's certainly the case with L Brands (LB) , purveyors of Victoria's Secret and Bath & Body Works, a stock that's once again flirting with all-time highs.

Cramer said even though the stock of L Brands has had a monster move higher, it's still worth owning because the company has both strong brands and stellar execution. When L Brands last reported, it delivered a 3% pop in same-store sales at Victoria's Secret and 7% at Bath & Body Works, in addition to a 130-point increase in their gross margins, all while drawing down inventory by 12%.

How is L Brands able to execute so flawlessly? Cramer said the company credits its speed. By executing faster, it can both respond to trends faster and fix mistake faster, leading to less excess inventory and few discounts.

With Victoria's Secret the leading lingerie retailer in America and Bath & Body Works commanding a 20% market share, Cramer said it's clear that L Brands is in control of its own destiny. The stock may be up 29% for the year and trade at 21 times earnings, but the estimates are likely still too low, Cramer concluded, meaning this is a buy on any weakness.

Why Cramer Loves Regeneron

Can a stock that's up over 8,000% over the past nine years still have room to run? It can if the stock is Regeneron (REGN) , a stock that's not done going higher by a long shot, according to Cramer.

Cramer explained that Regeneron is undergoing a remarkable transformation from a one-trick pony with its drug Eylea, to a pharmaceutical powerhouse, thanks to what Cramer deemed "the best pipeline in biotech."

Cramer said that Eylea is already a $1.7 billion franchise with new indications for diabetic patients coming soon. But beyond that Regeneron has a Phase III drug for dermatitis under development that also treats other auto-immune disorders like asthma. That could be another $2.8 billion opportunity.

Then there's Regeneron's anti-cholesterol treatment, which could see approval by summer 2015. Cramer pegged that opportunity at $4.3 billion in peak sales.

Finally, Regeneron has an arthritis treatment in the works, with approval expected in 2016. Add another $4 billion potential there.

All told, Cramer said this $1.7 billion company could be an $11 billion company in just a few years time. The stock is not cheap at 34 times earnings, Cramer admitted, but its potential is huge.

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Lightning Round

In the Lightning Round, Cramer was bullish on Quintiles Transnational (Q) , McKesson (MCK) , Hanover Insurance Group (THG) and Kinder Morgan (KMI) .

Cramer was bearish on Cliffs Natural Resources (CLF) , IMS Health Holdings (IMS) , Gilead Sciences (GILD) , Cenovus Energy (CVE) and Twitter (TWTR) .

No Huddle Offense

In his "No Huddle Offense" segment, Cramer sounded off against those who cry foul at companies' capital allocation plans, saying that it's better to invest in growth than buy back stock and increase dividends.

Cramer said many companies are already fully funding their growth plans and still have cash to burn, so why not reward shareholders with big buybacks and dividends? Yahoo! (YHOO) and Apple are two such companies that are doing all the right things with their cash, Cramer noted.

Do we really care how a company creates value, Cramer asked? Not really.

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To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

-- 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 AAPL, BAC, FB, GOOGL, KMI and TWTR.

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