Jim Cramer's 'Mad Money' Recap: Some 'Buys' for the New Year

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NEW YORK (TheStreet) -- Not every company participated in yesterday's big run, Jim Cramer told his "Mad Money" TV show viewers Thursday. Cramer identified five sectors that he thinks are still buy, buy, buys going into the new year.

Investors can still pick up any of the high-growth names, such as Netflix (NFLX) or Amazon.com (AMZN), because they don't even need earnings to propel their stocks higher. He also endorsed Facebook (FB), with its secondary offering, and, of course, Twitter (TWTR).

Cramer's first sector to watch is the banks. He said with the government "witch hunts" winding down, the banks once again have the confidence to expand. Bank of America (BAC), a stock Cramer owns for his charitable trust, Action Alerts PLUS, is still a favorite as it has yet to return to its pre-crash levels.

Next on Cramer's list are the housing stocks, led by Lennar (LEN), which reiterated that even with demand for housing cooling, the supply of homes has fallen woefully behind.

Retail is Cramer's third sector highlight. He said the group has done nothing for a month as investors worried about the holiday season. Now's the time to circle back to Macy's (M), another Action Alerts PLUS name, he said, along with GameStop (GME) and PVH Corp (PVH).

Cramer's last two picks are the oil companies and the airlines, two sectors that normally trade opposite one another but now could both go higher thanks to Warren Buffett's endorsement of Exxon Mobil (XOM) and strong earnings from the airlines.


You can always fall back on big, long-term themes, Cramer told viewers, themes like the revolutions in biotech and oil and gas. These stocks still go down like all the others, but their mega-trends will give you the confidence to buy on that weakness.

In the biotech space, Cramer once again endorsed his "four horsemen," which include Celgene (CELG), Gilead Sciences (GILD), Biogen Idec (BIIB) and Regeneron (REGN).

Celgene continues to have three terrific divisions, yet trades at just 22 times earnings with a 23% growth rate. Meanwhile, Gilead's Hepatitis-C franchise remains strong with plenty more drugs in its pipeline. Biogen is a leader in treating multiple sclerosis and Regeneron shines in the macular degeneration arena.

In the oil patch, the trend towards continental energy independence by 2018 marches on, and Cramer gave the nod to EOG Resources (EOG), Noble Energy (NBL), Line Energy (LINE) and National Oilwell Vargo (NOV). All but EOG are Action Alerts PLUS holdings.

EOG Resources is increasing production by 39%, while Noble is knocking it out of the park in the Niobrara shale. Line Energy yields almost 10% and National Oilwell Vargo is expecting accelerating earnings growth in 2014.

Cramer said investors can add any of these names to their portfolios and rest assured that their investments will flourish.

Stocking Stuffers Redux

For the next installment of his "Stocking Stuffers" series, Cramer recommended investors put two of this year's laggards under the tree this year: Apple (AAPL) and Caterpillar (CAT), both of which are Action Alerts PLUS holdings.

Shares of Apple are up a scant 3% for the year. But after bottoming this summer they have been on a roll. Apple is a holiday play, said Cramer, and estimates are now trending too conservative for the coveted gadget maker. Low expectations coupled with great products will be a winning formula for this stock, which trades at just nine times earnings with a 14% growth rate and a 2.2% dividend yield.

Caterpillar is one of the few Dow components to be down for the year. But here again, Cramer said the estimates are too low, and after several quarters of disappointments nobody seems to care. Business should start to recover in 2014 now that the company has slashed $5 billion in costs, including some 13,000 workers. Every dog has its day, the saying goes, and for Caterpillar 2014 could be its year. Cramer gave the stock a $100 price target.

Lightning Round

In the Lightning Round, Cramer was bullish on Boise Cascade (BCC), Weyerhaeuser (WY), Herbalife (HLF) and Cypress Semiconductor (CY).

Cramer was bearish on EMC (EMC).

The Road Ahead

It's been a full 18 months since Congress passed its last highway bill, and that can only mean one thing... the money is finally starting to flow to the companies that build roads. That's why Cramer said it's time to start picking up shares of Cemex (CX) and Vulcan Materials (VMC).

There are a lot of things going right for the aggregate and cement makers, including a huge boost in a federal loan program, states increasing funds for their own infrastructure projects and the recovering non-residential construction industry.

Cemex, based in Mexico, is the third-largest cement maker on Earth, with 21% of its earnings stemming from the U.S., 40% from Mexico and another 28% from northern Europe. The company just completed a major restructuring, strengthening its balance sheet and making it a great bet on a recovery in infrastructure spending.

Vulcan Materials is the best pure-play on U.S. construction and is the higher-risk, higher-reward stock of the two. The company never recovered to its 2007 highs of $121 a share, trading today at just $57 a share. Vulcan has a superior geography footprint, said Cramer, and investors shouldn't fear its 87 multiple as the earnings estimates will increase dramatically once stalled projects start moving again.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer schooled viewers on how the laws of supply and demand affect stock prices.

First, there's the notion of supply and demand for the stocks themselves. In the case of Twitter, there simply aren't enough shares to satisfy demand. Since Twitter is the only company of its kind, that makes it all the more valuable.

Contrast that to a stock like Citigroup (C). Not only does Citi have a ton of its own shares, it's one of a hundred banks investors could choose for investment.

There's also supply and demand for what a company makes. In the computer parts business, companies like Micron Technologies (MU) and Seagate (STX) fall on even a rumor that new factories might be built, increasing supply of things like memory and hard drives.

"Know your metrics," because simple economics affects stocks more than you might realize, Cramer concluded.

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, CAT, LINE, M, NBL and NOV.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com 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 TheStreet.com, 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 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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