Jim Cramer's 'Mad Money' Recap: A Confused Market

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NEW YORK ( TheStreet) -- The market is confused and that's almost always negative for stocks, Jim Cramer said on "Mad Money" Tuesday. Until there's a resolution the stocks of great companies will continue to be put on sale for those who truly see their value, Cramer continued.

Is good news for the economy bad news for stocks? That's the question that's been plaguing the markets for the past three years, Cramer said, as investors playing the Federal Reserve and macro trends butt heads with those picking individual stocks. Cramer said the Fed watchers are almost always wrong -- they never account for all the positives in the market such as mergers and breakups and spin-offs, all of which are propelling stocks higher. Instead, these investors focus on the macro picture, which is always difficult to translate into the market's next move.

The Fed watchers have always missed the big revolutions like PCs, smart phones, social media, cloud computing and the renaissance in oil and gas, just to name a few. It's always better to focus on individual stories, he said, such as Apple ( AAPL), a stock Cramer owns for his charitable trust, Action Alerts PLUS. Cramer said the news that Apple may have finally struck a deal with China Mobile ( CHL) and is acquiring social media companies is what's driving that stock, not the latest auto sales or unemployment numbers.

Meanwhile, stocks such as Johnson & Johnson ( JNJ), another Action Alerts PLUS holding, are up on analyst upgrades, another non-economic story. Still others, like the oil stocks, continue to be put on sale, giving investors a great opportunity to buy them at great prices.

As in the retail world, eventually the merchandise will be picked up by investors as prices continue to decline. There's a good chance that by the time the macro investors return, all of the great bargains will have been already snapped up. That scenario could happen as early as tomorrow, Cramer concluded.

Off the Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Ed Ponzi over the chart of Hewlett-Packard ( HPQ). Cramer has hated this stock for quite some time but is now changing his tune. Shares of HP are up 93% so far in 2013 -- after reporting an excellent quarter, the stock may be ripe to buy.

According to Ponzi's research, the daily chart of HP is displaying a bullish cup-and-handle pattern. This formation is among the most reliably bullish among technical analysts and was confirmed by the MACD oscillator, which recently formed a bullish crossover, another highly bullish signal.

Pulling back to HP's weekly chart, the same patterns continued, with the weekly chart also displaying a cup-and-handle formation. Based on the daily pattern, Ponzi gave a price target of $33 a share, but using the weekly chart, that target rose to $42 a share.

Turning to the fundamentals, Cramer said that HP remains a great comeback story. The company has streamlined operations, aggressively cut costs and still has more opportunities for savings. Moreover, HP is taking market share now that Dell has taken on huge debt in its effort to go private and is now less competitive.

With HP now committed to returning capital to shareholders via dividends and share buybacks, Cramer said he thinks HP is a long-term buy.

Battle of the High-end Retailers

With the high-end consumer on a tear, Cramer pitted two high-end retailers against one another as a lesson in comparative stock picking. The stocks included Michael Kors ( KORS), the hot accessory IPO from 2011 that's up 234% since its IPO, against newcomer Vince ( VNCE), which popped 43% on its initial public offering a few weeks ago but hasn't done much since.

Cramer said while some investors are calling Vince "the next Kors," nothing could be further from the truth -- Kors trounces Vince on every metric imaginable.

For instance, Kors currently operates 352 stores worldwide while Vince only has 21 company-owned stores, preferring to sell the bulk of its merchandise through wholesale. That explains why Kors has 60% grose margins compared to only 45% for Vince. It's always better to have your own stores, said Cramer.

Vince is also primarily domestic while Kors is expanding rapidly overseas as well. Same-store sales at Kors were up 23% this quarter while Vince's stores increased by only 16.5%.

Shares of Vince currently trade at 37 times earnings with a 40% growth rate. That may sound cheap until you compare it to Kors, which trades at 27 times earnings with a 25% growth rate. Vince also has ownership issues, with venture capital still owning the lion's share, 70%, of the company's stock. Until that lockup expires in late May, Cramer said, owning Vince is too risky.

However, shares of Kors are among the anointed few on Wall Street, and Cramer expects to see fund managers continue to pile in throughout the rest of the year.

Lightning Round

In the Lightning Round, Cramer was bullish on Xilinx ( XLNX), Deere & Company ( DE) and Celgene ( CELG).

Cramer was bearish on Gigamon ( GIMO), Lumber Liquidators ( LL), Compass Minerals ( CMP) and Epizyme ( EPZM).

Executive Decision: Sam Thomas

In the "Executive Decision" segment, Cramer spoke with Sam Thomas, president and CEO of Chart Industries ( GTLS), a stock that's up 51% so far in 2013 but has fallen 17% in the past five weeks after the company cut its 2013 forecast in October after a bad third quarter.

Thomas said the long-term story hasn't changed for Chart but the company did see a pause in China, which has slowed its once-rapid growth in natural gas infrastructure. He said tighter emission standards are still coming in the region, however, which will put pressure on diesel fuel and once again restart the push towards natural gas. That pressure is now not expected until late in 2014.

Chart also suffered from cost pressures at its plant in Louisiana this quarter. Thomas said that with so much growth all along the gulf coast, wages for engineers, welders and other employees has gone up, meaning less margin for Chart.

However, even with those negatives, Thomas remains very optimistic about Chart's outlook, saying demand in the U.S. for LNG fueling stations and fuel tanks for vehicles is up, and all of the long-term trends remain intact.

Cramer agreed, noting that he remains a believer in Chart Industries over the long term.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer said everyone likes the oil stocks when they're hot, but no one seems to like them when they're cold. Fortunately for savvy investors, the time to buy is when things get icy.

Cramer said he's still a big fan of Noble Energy ( NBL) and National Oilwell Varco ( NOV), two Action Alerts PLUS names, along with EOG Resources ( EOG), a perennial fave, and Exxon Mobil ( XOM), which is finally showing some decent production growth.

Cramer said even BP ( BP) is a buy, now that its lawsuits are largely behind it and the company can once again be seen as an oil company.

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

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, JNJ, NO, NOV and XLNX.

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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