Cramer's 'Mad Money' Recap: Dicey Market (Final)
NEW YORK ( TheStreet) -- With markets down 3% from their highs, Jim Cramer told his "Mad Money" TV show viewers on Tuesday that it's all right to take some profits, trim back some positions and wait for signs that the markets are improving before buying in.
He said that the markets have changed for the worse since last week and investors need to adjust accordingly.
Cramer said he had no idea last week that tensions with Iran could worsen, Greece could inch even closer to default and China could slow down even more, but indeed, all three of these events have happened.
Cramer said he's now more skeptical of a peaceful solution between Iran and Israel, and that could send oil prices to all-time highs and dent corporate earnings. He said the markets aren't equipped for a full-on gas crisis.
Then there's Greece, an issue we thought was put to rest, but is once again back on the table. Cramer called the situation "pathetic" and said investors need to watch gold prices, via the SPDR Gold Shares (GLD) , and the Currency Shares Euro Trust (FXE) , to quantify the effects of the lingering debt crisis on U.S. stocks.
Finally, there's China. Cramer said he still thinks China's economy is slowing, not crashing, but with emerging markets across the board feeling headwinds, investors need to keep a close eye abroad.
All of these things should just cause a market pause, or even a modest reversal, said Cramer, but if any of the three take a turn for the worse, then stocks will quickly become more expensive than we previously thought. That's why he advised raising cash and waiting for a better entry point.
How to Ride the Jobs Report
Investors who believe Friday's employment report will be a good one need to load up on uniform supplier Cintas (CTAS) on any weakness, Cramer told viewers. He said as U.S. employment grows, Cintas will be the company that benefits most.
Cramer explained that Cintas has 37% market share in the uniform rental business, with 90% of sales stemming from right here in the U.S. thanks to its 900,000 customers. He said as hiring improves, it creates a virtuous circle where hiring leads to more consumption, which leads to even more hiring.
This cycle bodes well for Cintas, which makes even more money as its volumes increase. Cramer said the Cintas today is lean and mean, thanks to streamlined operations that's paying dividends in higher operating margins.
Cintas last delivered a nine-cent-a-share earnings beat on a 7.9% pop in revenues. Cramer said the company is also shareholder friendly, with a 1.4% dividend yield that's been raised every year for the past 29 years. Cintas also sports a stock buyback program that Cramer said could help the company blow away the numbers again next quarter. Trading at just 15 times earnings with a 13.3% growth rate, Cramer said that Cintas is cheap on every metric and he would be a buyer on any weakness, including today's 2% decline.