Jim Cramer's 'Mad Money' Recap: Silver Lining Playbook

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NEW YORK (TheStreet) -- The markets are a healthier place today, even though most investors lost money, Jim Cramer said on "Mad Money" Tuesday after a down day on Wall Street. Cramer said the markets saw weakness in the industrials, oils, autos and the banks, but that doesn't mean there isn't a silver lining.

For weeks, Cramer has been preaching the notion of "froth," stocks and sectors that have been going up too far too fast on hopes, dreams and speculation that have nothing to do with any traditional valuation metrics. A little froth is OK, said Cramer, but in the case of the clean energy stocks, these names just kept rising sharply, day after day, on absolutely no news.

That's why it was refreshing to see names such as Plug Power (PLUG) drop 41%, with Ballard Power Systems (BLPD) and FuelCell Energy (FCEL) also down sharply, Cramer continued. Tuesday's decline was rough for those who owned shares in these names, but it's just what the market needed to reset to normal levels.

The same can be said for Fannie Mae (FNMA) and Freddie Mac (FMCC), which also suffer big losses on the day.

Then there's Tesla Motors (TSLA), the cult stock that was soaring on the hopes and dreams of what the company might be become, far from where it actually is today. "Hope should never be part of the equation," Cramer reminded viewers.

That's why, despite the losses, the market is healthier today than it was yesterday, Cramer concluded.

Executive Decision: Michael Kneeland

For his "Executive Decision" segment, Cramer sat down with Michael Kneeland, president and CEO of United Rentals (URI), a company that rents nearly 400,000 pieces of equipment to industries across America. Shares of United Rentals are up a solid 51% since Cramer last checked in back in mid-October.

Kneeland is very bullish on his company's outlook and the outlook for the American economy. He said there are plenty of ways for United Rentals to expand because residential and nonresidential construction are picking up along with oil and gas providing our economy with a new growth engine.

Kneeland said United Rentals' customers seem to agree, with 98% of core customers saying they expect next year to be better than last year.

When asked why companies would choose to rent equipment rather than own outright, Kneeland said there are many factors to consider including the costs to transport the equipment, to insure it, to maintain it, to obtain the proper permits and, of course, to utilize it properly. All of these items make renting a very attractive option for many companies.

Cramer said he agrees, continuing his recommendation of United Rentals.

Executive Decision: Doug Sanders

In his second "Executive Decision" segment, Cramer also sat down with Doug Sanders, president and CEO of Sprouts Farmers Market (SFM), a stock that soared on its IPO last year, only to falter this year on weak earnings and a secondary offering. Sprouts just released a blowout quarter, with a penny-a-share earnings beat on a stunning 13.8% rise in same-store sales.

Sanders credited both the natural and organic food trend in America as well as Sprouts' unique health and value business model for the continued success and growth. He said Sprouts is helping to dispel the notion that healthy needs to be expensive.

Sanders said customers today expect more from their food and from their grocer, which is why Sprouts aims to educate customers so they understand the benefits of what they're buying.

When asked if his company can grow and still provide enough food to meet demand, Sanders noted Sprouts has a network of local, regional and international growers that can fill all its produce needs and the company looks forward to competing in new markets.

Cramer said the negativity surrounding the natural and organic stocks may be overdone, making Sprouts an attractive buy.

Lightning Round

In the Lightning Round, Cramer was bullish on First Solar (FSLR), Boston Scientific (BSX), Occidental Petroleum (OXY) and Sonic (SONC).

Cramer was bearish on SunPower (SPWR), Ply Gem Holdings (PGEM), NovaGold Resources (NG), Bed Bath & Beyond (BBBY), Orexigen Therapeutics (OREX) and Halozyme Therapeutics (HALO).

Off the Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the chart of Bank of America (BAC) to determine the direction of the Action Alerts PLUS holding for the rest of 2014.

Collins last predicted Bank of America would see $17.75 a share two months ago, a call that's largely come true for a quick 5% gain on a big-cap stock. But Collins now felt that Bank of America could see $18.50 a share as the charts show a breakout from its defending triangle pattern giving way to a bullish flag formation.

Collins also noted the accumulation-distribution line, which has shown a reliable pattern of rallies anytime the line dips, as it has now.

Turning to a weekly chart of Bank of America, Collins was also impressed by the stock's Fibonacci ratios, which have lined up perfectly going into December and again from December into January.

Cramer said he agreed with Collins that Bank of America could see better days ahead.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer turned his sights on a new theme in the markets: frugality, brought on by all the pain endured over the great recession from the past few years.

One way consumers have become more frugal is by taking more affordable vacations, something that plays well into amusement park operators like Six Flags (SIX) and Cedar Fair (FUN), which are up 353% and nearly 258%, respectively, over the past five years.

What makes the moves in the amusement parks so interesting, said Cramer, is it's all been done under the radar for the most part. Quarter after quarter, these stocks deliver great, reliable earnings and no one pays much attention. Meanwhile, the park operators, with little competition, just keep raking in the dough for their shareholders.

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 BAC and OXY.

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