Jim Cramer's 'Mad Money' Recap: You Must Own Facebook

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NEW YORK (TheStreet) -- Don't let the critics dissuade you, Facebook (FB) is a must-own stock, Jim Cramer told his Mad Money TV show viewers Thursday. Cramer said this stock, which he owns for his charitable trust, Action Alerts PLUS, still has a lot of room to run.

It's inevitable that when a stock sees the kind of growth that Facebook has, the critics will be out in force, comparing the company's market cap to that of high-profile names in the Dow Jones Industrial Average or the S&P 500. But these comparisons don't mean a thing, Cramer continued. The only thing that matters is earnings.

Facebook is expected to earn $3 a share in earnings and is currently growing at 60% a year. Cramer said money managers are willing to pay twice a company's growth rate, but in this case he used just half its growth rate for his calculations. That means Facebook is worth 30 times $3, or $90 a share.

But what if those earnings estimates are too low, or its multiple too conservative? Cramer said the fact is that Facebook deserves to be trading higher because after a slow start, the company just about has a monopoly on mobile advertising. That monopoly will be worth big bucks in the "out years" of 2016 and beyond, he concluded.

Executive Decision: David Weinberg

For his "Executive Decision" segment, Cramer spoke with David Weinberg, CFO and COO of Skechers USA (SKX), a stock that rose 8% today to an all-time high after the company reported a 28-cents-a-share earnings beat on a 37% rise in revenue. Shares of Skechers are up a quick 18% since Cramer last spoke with Weinberg on June 4.

Weinberg credited Skechers' strong quarter to its products, which he said resonate with customers around the world. He said Skechers has one look that sells everywhere.

When asked about its use of celebrities in its advertising, Weinberg said Skechers uses celebs all over the world, and their testimonials are appealing to both young and old consumers.

Weinberg continued that Skechers doubling its market share in footwear is not a question of if, but when. He said everywhere the shoes are sold they sell well.

Cramer called Skechers the most undervalued growth story out there. He said the company is for real, but still gets no respect from Wall Street.

Rating Cooperman's Picks

Cramer circled back to his discussion with fund manger Leon Cooperman at last week's "Delivering Alpha" conference to highlight two of Cooperman's favorite stocks, SuperValu (SVU) and Atlas Energy (ATLS).

Cramer said that after bringing in new management last year, SuperValu has gone from a down and out supermarket chain to a real turnaround story. The company has right-sized its operations while boosting its balance sheet, leaving three businesses bundled into one.

SuperValu currently has 191 grocery stores under its five remaining brands, along with 381 company-owned Save-a-lot discount stores, 950 Save-a-lot franchised locations and a noteworthy wholesale food distribution business. Cramer said the possibility of a breakup of these three parts could bring out a ton of value. Shares of SuperValu are inexpensive, he said, with limited downside.

Cooperman also liked Atlas Energy, a master limited partnership that is both an oil and gas producer as well as a pipeline operator. The company yields 4.7%, but is growing at 24% a year. Cramer said shares could top $59 for this terrific operator and the company could be a takeover target given all the merger activity in the oil patch of late.

Executive Decision: Mike Molinini

In his second "Executive Decision" segment, Cramer at down with Mike Molinini, president and CEO, and also Peter McCausland, chairman and former CEO, of AirGas (ARG), which today delivered only in-line earnings that sent its shares down by 1.3%.

Molinini said that for years AirGas was able to accurately predict its earnings, but over the past two years many of its models have broken down. Over the past two quarters, however, the company has seen positive volume in capital equipment spending, a signal that growth is once again returning.

When asked about the safety and medical segments, historically solid growers for AirGas, McCausland noted that the health care group has been under pressure with cutbacks, so even that sector has not been immune to the slowdown.

There are many bright spots in the economy, however. The two executives noted that oil and gas remains strong and there's a need for welding gases for things like railcars and transportation.

Finally, when asked for advice about fending off hostile takeovers, as AirGas did two years ago, McCausland said that it's important to focus on long-term value creation and not just short-term value. He said that in retrospect, the hostile offer the company received at $90 a share seems very unattractive when shares trade over $108 today. But at the time, investors needed help seeing that value.

Lightning Round

In the Lightning Round, Cramer was bullish on Inovio Pharmaceutical (INO), Baidu.com (BIDU), JD.com (JD), United Technologies (UTX), Apple (AAPL) and Google (GOOGL).

Cramer was bearish on Tupperware (TUP), Kandi Technologies (KNDI), International Business Machines (IBM) and Clean Energy Fuels (CLNE).

No Huddle Offense

In his "No Huddle Offense" segment, Cramer said that he's still a fan of Boeing (BA), Celgene (CELG) and Qualcomm (QCOM), three stocks he said aren't broken but merely digesting their recent gains.

"Let them come in and buy them," Cramer concluded.

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, BA, FB, GOOGL and UTX.

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