Segment 1: Fear Factor
Cramer talked about how many investors are worried about the negative economic news that has been announced recently, and he said that he doesn't think any individual piece of news is bad enough to knock the market down, but in total, the information could take the market down to near Dow 9300. He still wants to take profits on rallies and buy stocks with good dividends on pullbacks, but thinks that the market will keep heading down until the uncertainty about taxes, housing, and government regulation is gone.
Segment 2: Money from Membranes
Cramer recommended Polypore International (PPO) because it just hit the 52 week high list, the filtration sector is experiencing very high growth right now, it has diverse business lines with high barriers to entry, it has high gross margins, the company just reported a good quarter with its 5th earnings beat in a row, and the stock is cheap at 19 times earnings when the company has a 20% growth rate. Cramer said to buy the stock now that it has pulled back $3 from its high before it starts to go up again.
Segment 3: Merger Mania
Cramer said that merger activity has been picking up on Wall Street, and rather than trying to guess which company will be bought out next, he recommended buying Lazard (LAZ). LAZ is a financial advisory firm that specializes in mergers and acquisitions, so they will make more money as more deals are reached. Also, it is the only investment bank where their M&A advisory business is big enough for an increase in activity to improve their earnings, their fee backlog has been increasing, they managed to keep their revenues up even when deal volume was down last quarter, the rest of their asset management business is going well, they have $1.2 billion in cash, and Cramer thinks the stock can go to $49, which would be a 47% increase from now.
Segment 4: Lightning Round!
BP (BP): Cramer is bearish on this stock because he expects it to underperform for years, and he recommended Total (TOT) instead as a foreign oil stock.
Tibco Software (TIBX): Cramer is bullish on this stock because it is undervalued and it could be an acquisition target.
J. Crew Group (JCG): Cramer is bullish on this stock but said to wait until they report their quarterly earnings tomorrow before buying.
ReneSola (SOL): Cramer is bearish on this stock because he doesn't like China or the solar panel sector.
DryShips (DRYS): Cramer said this stock is okay, but he likes Diana Shipping (DSX) better.
Intuitive Surgical (ISRG): Cramer is worried about this stock, so he said not to buy it until he does some more homework and makes a final decision.
Segment 5: Am I Diversified?
Cramer reviewed caller portfolios and made the following stock picks:
Kinder Morgan Partners (KMP): Cramer is bullish on this stock.
Apple (AAPL): Cramer is bullish on this stock.
Goldman Sachs (GS): Cramer said he would rather own one of the cheaper financial stocks.
Yum! Brands (YUM): Cramer is bullish on this stock.
United Technologies (UTX): Cramer is bullish on this stock.
Microsoft (MSFT): Cramer said he would rather own Salesforce.com (CRM).
Verizon (VZ): Cramer is bullish on this stock.
