Jim Cramer Mad Money Recap

I have had fun watching Jim Cramer’s Mad Money lately, and today’s episode really was quite interesting. This is my second full blown recap of his picks from the show, and I think we may have a new category in the works for the blog.

Toda’ys show was based on the quality defense in the troubled markets we are currently in. So Jim Cramer recommended to us that we stick to high-quality growth names. Being careful though is important too, because there is a difference between high quality growth and low quality growth.

Some examples of stocks that look good but really are flawed are Lucent Technologies (LU), H&R Block (HRB), and Imax (IMAX) according to Cramer. The reason? Low quality earnings. Jim’s bottom line for these companies was, “Dump stocks with low-quality earnings and load up on high-quality names.”

As the show went on Cramer started getting into the high quality stocks on his list, but said to makes sure to avoid stocks that have made too many acquisitions. Jim told us to look for core organic growth which comes from the core business. Also, he recommended dividends and buybacks are a plus.

So what were the picks for us investors to check out on the high-quality side? Jim gave us Pepsi (PEP), United Technologies (UTX) which he owns for his charitable trust, and 3M (MMM). Pepsi was one that he actually gave not two but three thumbs up on, thanks Jim!

I didn’t get to check the stocks after hours, but I am sure his words will help move some of these picks one way or another. You can read more of my Mad Money show recaps daily on the blog.

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-- Posted by Blain Reinkensmeyer on June 6, 2006 at 11:20 pm --