Jim Cramer's 'Mad Money' Recap: Next Week's Game Plan

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NEW YORK (TheStreet) -- The U.S. has been great, but if the markets are to head even higher we'll need the rest of the world to be great as well, Jim Cramer said on Mad Money Friday as he laid out his game plan for next week's trading.

Cramer said on Monday he wants to see positive inflation data out of China. China needs low inflation in order to reignite its growth, he continued. If the markets are to take it to the next level, it'll need China to be growing.

Tuesday brings earnings from Ulta Salon (ULTA) and United Natural Foods (UNFI). Cramer said Ulta, once a high-flying momentum name, is now stuck in the mud and will need to see strong growth to get moving again. Meanwhile, United Natural should be able to provide an update on the packaged food wars and the state of the healthy-eating segment.

Next, on Wednesday, it's Restoration Hardware (RH) in the spotlight. Cramer said with high-end retail doing well, he expects good things from this company.

On Thursday it's Lululemon Athletica (LULU), another high-flier gone bad. With shares down nearly 25% for the near, Cramer said he will have to turn positive on Lulu soon, so he's anxious to hear how the the CEO is doing.

Finally, on Friday, it's more macro economic data when the U.S. consumer confidence and May's producer price index, or PPI, arereleased. Cramer said he's expecting the PPI to be bad this month, which will likely put a damper on the markets.

Executive Decision: Leo Denault

For his "Executive Decision" segment, Cramer sat down with Leo Denault, chairman and CEO of Entergy (ETR), a utility that seen its shares rise 24% so far in 2014 while still sporting a 4.2% dividend yield.

Denault said there's a manufacturing renaissance occurring in the South thanks to the renaissance in U.S natural gas. He said that's giving Entergy strong top-line growth in a market where electricity rates are 20% lower than the national average.

When asked how the new EPA rules will affect Entergy, Denault said it's still early in the process but he believes the company is in great shape because it has very little coal in the mix and relies mainly on nuclear and natural gas for generation.

When asked about the nuclear power industry, Denault said there will always be detractors but what the industry needs is new designs and new technology to jump-start growth. He said as it stands today, nuclear plants are big and expensive and that takes away from the fact they produce clean, reliable base-load power with no emissions while creating great jobs.

Cramer said Entergy is one stock that's not done going higher, as there's plenty of growth ahead.

Unlocking Value at Kraft

As the bidding wars heat up in the consumer packaged food group, Cramer recommended an unlikely winner in the urge to merge: Kraft Foods (KRFT).

Cramer said while Kraft is not itself a likely takeover target, the company has a long history of spinning off brands in order to unlock value. As companies are paying up big for the likes of Hillshire Brands (HSH), Kraft, with its 30 brands including Mac & Cheese, A1 steak sauce, Cheese Whiz, and Jell-O, along with mayo, pickles, hot dogs and more, could be mighty attractive.

Kraft was itself a spinoff in 2007, Cramer reminded viewers, and the new company hit the ground running, selling off its cereal assets later in 2007, then its frozen pizzas in 2010. In 2011, the U.S. assets became the Kraft we know today.

Cramer said while Kraft has an enterprise value today of $43 billion, by splitting off its brands -- like salad dressings for $1.9 billion, coffee for $3.3 billion, pickles for $1.9 billion and everyone's favorite hot hogs, Oscar Meyer, for $21 billion -- the assets of Kraft could total $70 billion.

That's a big win for shareholders, Cramer concluded, and it's likely that at least one of these brands could be on the auction block very soon.

Am I Diversified?

In the "Am I Diversified" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets. The first portfolio included Apple (AAPL), Starbucks (SBUX), American Water Works (AWK), Hess (HES) and Genesee & Wyoming (GWR).

Cramer said this portfolio was perfectly diversified.

The second portfolio's top holdings included Walt Disney (DIS), General Electric (GE), Southwest Airlines (LUV), Newmont Mining (NEM) and United Technologies (UTX).

Cramer said this portfolio was also properly diversified.

The third portfolio had American Airlines (AAL), Apple, Clorox (CLX), Altria (MO) and Phillip Morris (PM) as its top five stocks.

Cramer said this portfolio can't have both Altria and Phillip Morris and he suggested selling Phillip Morris and adding a drug stock like Bristol-Myers Squibb (BMY).

Lightning Round

In the Lightning Round, Cramer was bullish on Sysco (SYY), GW Pharmaceuticals (GWPH) and Anadarko Petroleum (APC).

Cramer was bearish on Cliffs Natural Resources (CLF), Amazon.com (AMZN), Bank of America (BAC) and Talisman Energy (TLM).

No Huddle Offense

In his "No Huddle Offense" segment, Cramer sounded off against what he called "thesis shorting," or shorting stocks based solely on half-baked theses that lack both originality and ingenuity.

That was the case today with Joy Global (JOY), a stock that had 20% of its shares sold short, despite the fact that the company already had most analysts betting against it, leaving no one left to downgrade it.

That's why when a Bank of America analyst upgraded Joy Global, shares rallied 10%, leaving the shorts holding the bag.

These "theses" are far from brilliant, said Cramer, and he's shocked so many investors pile into these weak ideas that can come undone at a moment's notice.

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 APC, APPL, GE and UTX.

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