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After a tremendous week on Wall Street, can the rally continue? That was the question Jim Cramer pondered with his Mad Money viewers Friday as he laid out his game plan for the holiday-shortened week ahead.
On Monday, Cramer said he'll be watching GameStop (GME - Get Report) , along with Tyson Foods (TSN - Get Report) , Mallinckrodt (MNK - Get Report) and Palo Alto Networks (PANW - Get Report) . Cramer said he's still a believer in GameStop and hopes Palo Alto can stage a comeback for the cyber security names, but Tyson is still in the penalty box and Mallinckrodt will likely not have good things to say.
Tuesday is jam-packed with stocks Cramer likes including Campbell's Soup (CPB - Get Report) , Hormel Foods (HRL - Get Report) , Dollar Tree (DLTR - Get Report) , Signet Jewelers (SIG - Get Report) and Analog Devices (ADI - Get Report) , along with some he doesn't -- Tiffany (TIF - Get Report) and both parts of former Hewlett-Packard, HP (HPQ - Get Report) and Hewlett Packard Enterprise (HPE - Get Report) .
Beverage Shares Have Pop
The Federal Reserve may be poised to raise interest rates to rein in the economy, but there's one sector that's in bull market mode: the beverage stocks. Cramer said his favorites in the soda and energy space remains Dr Pepper Snapple (DPS) and Monster Beverage (MNST - Get Report) .
Dr Pepper derives 90% of its revenue from the U.S. and is therefore largely immune to the strong U.S. dollar. The company is also very shareholder friendly, buying back $668 million worth of its own shares, or 3% of its float, in just the past quarter. Even with shares near their 52-week highs, Cramer said Dr Pepper is a buy at just 21 times earnings.
Then there's Monster, the world's No. 2 energy drink maker in a happy duopoly with Red Bull. Thanks to its partnership with Coke, Monster has access to a huge global distribution network, even though it still derives 80% of sales domestically. Shares of Monster trade at 38 times earnings, but the company sports a 21% long-term growth rate.
Now for the Hard Stuff
Continuing with his beverage bull market thesis, Cramer took at look at the alcoholic side of the beverage biz, recommending Constellation Brands (STZ - Get Report) and Molson Coors (TAP - Get Report) .
Shares of Constellation are already up 39% for the year, and the world's No. 3 brewer and premium wine maker could get even larger if the merger between Anheuser-Busch InBev (BUD) and SAPMiller (SBMRY) requires the divestiture of some assets, which it most certainly will. But even without more brands, Cramer said Constellation is already having trouble keeping up with the demand for its products. Shares of Constellation trade at just 23 times 2016 earnings.
Then there's Molson Coors, which is already in a deal with SAPMiller to buy the remaining portions of the Coors brand it doesn't already own. After the deal closes, Molson will own 100% of Coors and Miller Lite, which will boost earnings by 25%, adding $4.7 billion in revenue.
The New 'Three Stooges'
Rule No. 1 when you find yourself in a hole: stop digging! That's a lesson that has fallen on deaf ears at BHP Billiton (BHP) , Rio Tinto (RIO) and Vale (VALE - Get Report) , three companies which Cramer dubbed the "Three Stooges" of iron ore.
It seems like common sense really. When the price of the commodity you make falls, you cut production of that commodity. But the stooges have been doing the opposite, raising production, resulting in the cutting of their share prices by 58% for BHP, 33% for Rio and a whopping 75% for Vale over the past two years.
Cramer said the dividends are all three companies are in danger. BHP yields 4.3% but currently pays out $2 for every $1 in earnings. Unsustainable. Rio yields 6% and pays out $1 for every 40 cents of earnings. Then there's Vale, which has already cut its dividend twice but still yields 5% and is losing money every quarter.
Cramer said investors need to steer clear of this entire sector.
In the Lightning Round, Cramer was bullish on PPG Industries (PPG - Get Report) , Masco (MAS - Get Report) , Match (MTCH - Get Report) , Sirius XM Radio (SIRI - Get Report) , Applied Materials (AMAT - Get Report) , LAM Research (LRCX - Get Report) , Mondelez International (MDLZ - Get Report) , Parker Hannifin (PH - Get Report) , Digimarc (DMRC - Get Report) , RR Donnelley (RRD - Get Report) and Johnson Controls (JCI - Get Report) .
No Huddle Offense
In his "No Huddle Offense" segment, Cramer said that just a week ago, it looked like the bull was on its last leg, with only a handful of leaders still able to eke out any gains. Retail was crushed, the industrials singed and oil and biotech was seeing sizable declines.
Now, just a week later, that narrow leadership has expanded greatly. Retail is not dead after all, some of the industrials still can turn a profit, and the oil stocks have proven they can hang in there while the health care stocks seem to have been reborn.
It's remarkable to see such a transformation in so many sectors in such a short time, Cramer concluded. Investors should take notice.
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