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NEW YORK ( TheStreet) -- Stop playing themes and start investing in best-of-breed stocks. That was Jim Cramer's advice to "Mad Money" viewers Thursday.

Cramer said if investors only read the headlines, they'll never understand the markets. One day tech stocks are good, the next they're bad. Oil is good, but then oil is bad. Housing is horrendous, but then it's fabulous.

That's why it's more important than ever to pay attention to individual companies, in particular those that are executing well. Investors only need to look at Caterpillar ( CAT - Get Report) to see what happens when things go wrong. With construction on the rise and China recovering it should be all systems go at this heavy equipment maker, but CAT still managed to miss the numbers and cut estimates.

Cramer said a better way to play construction would be with United Rentals ( URI - Get Report) and China with Cummins ( CMI - Get Report).

Other examples of bad execution include Diamond Offshore ( DO - Get Report) in the oil patch and Union Pacific ( UNP - Get Report) for the rails. Both failed to deliver while rivals Ensco ( ESV), a stock Cramer owns for his charitable trust, Action Alerts PLUS, and Norfolk Southern ( NSC) delivered the goods.

From airlines to chemical to even the home builders, Cramer said some companies get it while others clearly don't. Which is why investors need to continue doing their homework and stick with only the best-of-breed players.

Executive Decision:

In the "Executive Decision" segment, Cramer once again spoke with Ellen Kullman, chair and CEO of DuPont ( DD - Get Report), the chemical maker that delivered today a four-cents-a-share earnings beat on better-than-expected revenue while reaffirming guidance and announcing the spinoff of its cyclical performance chemical business. Shares of DuPont currently yield 3% and are up 15% since Cramer last spoke with Kullman on June 25.

Kullman said DuPont is now splitting into two world-class companies. One will be a company dedicated to new and novel applications of science, while the other will remain a strong, industry-leading chemical company with high margins.

One example of science in action is DuPont's insecticide business, which now tops $900 million in annual sales after just five years. Meanwhile, on the chemical side of the house, Kullman said she sees the market for TiO2 stabilizing.

Among the bright spots for DuPont is its safety and protection division, which is seeing an uptick in Kevlar-related sales, and also Latin America, which is seeing increased demand for DuPont's agricultural products.

Finally, when asked about the global marketplace, Kullman said that in big industries including autos, electrical and industrial goods there remains a lot of uncertainty, and the U.S. is losing credibility by not being able to resolve its issues in Washington. "Our destiny is in our control," said Kullman. "We just need to get after it."

Executive Decision: John Faraci

In his second "Executive Decision" segment, Cramer sat down with John Faraci, chairman and CEO of International Paper ( IP - Get Report), which today announced a penny-a-share earnings beat after a 17% boost in its dividend and a monster share buyback program equal to 7.5% of the company's market cap. Despite all the recent good news, shares of IP still trade at just 10 times earnings.

Faraci said International Paper continues to innovate in the packaging business, and he showed off one of his company's new paper-based containers for cold and frozen items that replaces traditional foam containers. He said companies including Tyson Foods ( TSN - Get Report) and ( AMZN - Get Report) remain big customers.

But beyond innovation, Faraci noted IP is also a cash-flow story and has been steadily increasing margins and efficiencies through both acquisitions. He said IP is not interested in just growth, but profitable growth, and only makes acquisitions that make sense and will impact the bottom line.

Cramer continued his recommendation of International Paper, noting that it's the perfect investment for a retirement or discretionary portfolio.

Lightning Round

In the Lightning Round, Cramer was bullish on Cheniere Energy ( LNG - Get Report), Noble Energy ( NBL - Get Report), Royal Bank ( RBS) and Halcon Resources ( HK).

Cramer was bearish on Green Mountain Coffee Roasters ( GMCR), CVR Refining ( CVRR) and Triquint Semiconductor ( TQNT).

Executive Decision: Rick Hamada

P/>In a third "Executive Decision" segment, Cramer checked in with Rick Hamada, CEO of Avnet ( AVT - Get Report), the distributor of IT hardware and services that today delivered a two-cents-a-share earnings beat on lighter-than-expected revenue and initiated a regular dividend for shareholders.

Hamada said Avnet is looking for a more systematic way to return capital to shareholders and decided that now was the right time to make that commitment in the form of a regular dividend.

When asked about the technology sector overall, Hamada characterized it as an industry with multiple dimensions of change. He said companies are increasingly pressured to keep up with the accelerating pace, which is why there are companies doing well while others fall behind. The key, he said, is to pay attention to your customers and adapt quickly

Turning to the topic of Washington, Hamada said he couldn't draw a straight line from the government shutdown to any specific failure in his business this quarter, which is why he chose not to blame any weakness on Washington. "I'm not going to tell you what I don't see," Hamada said. However, Hamada did mention the troubles in Washington are not going unnoticed around the globe and is a topic Avnet is hearing about every day as it talks to its customers.

Cramer said he continues to recommend Avnet despite the mixed reaction to its quarterly results.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer asked, "will any retailer ever be able to please Wall Street?" He noted that Home Depot's ( HD - Get Report) earnings were amazing, yet were met by yawns. Costco ( COST - Get Report), an Action Alerts PLUS holding, saw same-store sales pop 5%, yet its shares barely crawled back to even.

But then there were the earnings from two niche retailers, Lumber Liquidators ( LL - Get Report) and Tractor Supply ( TSCO - Get Report), that were met with cheers and adoration.

Cramer called these two stocks the "biotechs of retail" because Lumber Liquidators posted a 17% rise in same-store sales while Tractor Supply saw a 7% pop. Both companies still have tons of room to go because Lumber Liquidators only has 17 stores in California and Tractor Supply is just now accelerating its planned store openings.

These stocks may seem expensive, trading at 40 times and 30 times earnings, respectively, but Cramer said given their growth and love from Wall Street they're definitely worth the premium.

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

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-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

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At the time of publication, Cramer's Action Alerts PLUS had a position in COST, ESV, NBL and UNP.

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."

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