Jim Cramer's 'Mad Money' Recap: Clear the Slate for Earnings Season

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NEW YORK (TheStreet) -- It's time to wipe the slate clean, earnings season is upon us, Jim Cramer told his Mad Money TV show viewers Friday, as he laid out his game plan for next week's trading. Cramer said starting next week, stocks will only move higher if companies can beat on the top and bottom lines and raise guidance for the rest of the year.

On Monday, Cramer said he'll be watching for news from the Farnborough Airshow, one of the few times a year when Boeing (BA) and Airbus give investors an update on their order book. Expect to hear good things from Boeing.

Tuesday, it's earnings from JPMorgan Chase (JPM), a stock which Cramer owns for his charitable trust, Action Alerts PLUS, along with Intel (INTC) and Yahoo! (YHOO). Cramer said JPMorgan will likely have good things to say, as he expects from Intel. As for Yahoo!, investors will be looking to hear updates on the upcoming Alibaba IPO.

Wednesday brings earnings from Bank of America (BAC), another Action Alerts PLUS name, and Kinder Morgan Energy Partners (KMP). Cramer said he wants Bank of America to just deliver a good, clean quarter with no mistakes, no restatements and no new lawsuits. If they can do that, this stock will have a chance to head higher. As for Kinder, Cramer said he wants to hear if oil is headed below $100 a barrel. If so, that's good news for the transports and retail.

For Thursday, it's Snap-on Tools (SNA) and PPG (PPG) reporting, two stocks Cramer said are buys, along with Google (GOOGL), an Action Alerts PLUS holding that Cramer likes for the long haul, and IBM (IBM), a stock Cramer said could go either way.

Finally, on Friday, it's General Electric (GE), yet another Action Alerts PLUS position, and Honeywell (HON) in the spotlight. Cramer said he's hoping both these companies offer plans to reignite growth and boost dividends to spur their stocks.


Sometimes unhealthy products can create healthy profits, Cramer told viewers, as he took a closer look at a tobacco industry  in the middle of a consolidation wave.

Cramer said the just today we learned that Reynolds America (RAI), the number-two cigarette maker, is looking to merge with Lorillard (LO), the number-three maker. That would give the combined company 42% market share in the U.S., just behind Altria (MO), with just over 50%.

Love them or hate them, Cramer said cigarettes are good business, and as we've seen with the airlines, semiconductors, beer and countless other industries, when there are fewer players, profits soar. In this case, just two companies will control over 90% of the market, Cramer noted, and that can only lead to higher prices and higher margins.

Cramer said profits in Lorillard may be capped for the moment, but he's recommending both Reynolds, Altria and Phillip Morris Int'l (PM).

Continuing with his "Vice Night" theme, Cramer also took a look at the gambling stocks, offering viewers a fresh ranking of his favorites.

Cramer said when it comes to gambling, it's all about China's Macau region, which has been struggling as of late as the sluggish Chinese economy and a crackdown on over-indulgent wealthy Chinese gamblers have weighed on the region. But Cramer said he thinks the downside has been overdone, which makes the casino stocks a buy.

Cramer's new favorite was MGM Resorts (MGM), which has the least Macau exposure of the group, but a fabulous position in good ol' Las Vegas. Second on the list was Las Vegas Sands (LVS), which has more Macau exposure, but less exposure to the big VIP spenders that are getting squeezed. With a 2.7% dividend, Cramer said this stock is a buy at 17 times earnings with its 20% growth rate.

Finally there's Wynn Resorts (WYNN), Cramer's former favorite that he now says he'd avoid, as it has the most exposure to both Macau and the VIPs. "There are better casinos to own," he said bluntly.


Off the Tape: Tom Maas, RumChata CEO

In his "Off The Tape" segment, Cramer sat down with Tom Maas, CEO, founder and master blender of RumChata, a blend of rum, cream, cinnamon and vanilla that has become the signature product of the privately held Agava Loco, LLC.

Maas invented RumChata in his kitchen five years ago and his company has exploded to $75 million a year in revenues. Agava Loco currently has 20 contractors, but no full-time employees, working for it.

When asked how he achieved his success, Maas explained that they only recently started advertising, instead focusing on YouTube and social media to reach out and talk directly to their customers. He said the feedback has been phenomenal, with fans of the brand creating all sorts of concoctions with RumChata.

One such drink, which Cramer sampled, was an iced coffee RumChata consisting of three parts coffee, one part RumChata, served over ice. Cramer said that Maas proves that the American dream is still alive and well.


Lightning Round

Here's what Jim Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Friday evening:

Southern Company (SO): "If you want a utility, that's a good one. I like it."

Core Labs (CLB): "This was a disappointing quarter, but its come down enough to own it. I think they'll do better next quarter."

Starbucks (SBUX): "I think you buy half now and if it comes in, you buy the rest."

GenCorp (GY): "Aerospace is terrific. I think all these stocks will be taken up next week."

Cheniere Energy (LNG): "I'm no longer a big fan of the LNG stock, I prefer the partnership, Cheniere Energy Partners (CQP)."

No Huddle Offense

In his "No Huddle Offense" segment, Cramer offered viewers some tough love when it comes to investing in speculative stocks. He said that when you invest in a speculative stock there will be losses, sometimes hideous losses, but if you invest in these names, you need to take responsibility for those losses.

Cramer noted that he got criticized for recommending Banco Santander (SAN) from $6 a share to almost $10, after the stock got crushed earlier this week. He said obviously if you have almost a double in a speculative stock, you shouldn't need him to tell you to take profits and run.

Likewise with GW Pharmaceuticals (GWPH), the British-based medical marijuana drug maker that's been all the rage lately. Cramer said if you can't handle the volatility, you shouldn't invest in a stock like this.

Speculate stocks can go to zero, Cramer reminded viewers, that's why they're not for the faint of heart and should never be more than 10% of your portfolio. If the story changes, you need to take the gains, or the losses, and run, he concluded, and you certainly shouldn't wait for him, or anyone else, to tell you to do so.


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, GOOGL and JPM stocks.

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