Cramer's 'Mad Money' Recap: Rally Made in U.S.A. (Final)
NEW YORK ( TheStreet) -- It's important to know who is the driving the markets and who's just along for the ride, Jim Cramer told his "Mad Money" TV show viewers Monday. He said investors who think that Europe is still driving force behind the markets need to think again.
Cramer said there's been a fundamental shift in market geography since last year, when Europe was in the driver's seat with China riding shotgun. Back then, the U.S. was asleep in the back seat, he noted, but that all changed as 2012 began. Now, he said, the U.S. markets are behind the wheel and it's Europe that's alone in the back seat.
Why should this matter to investors? Cramer said it explains today's trading action, which seemed off to a positive start after Saturday's positive Chinese manufacturing data signaled that the country's so-called economic "hard landing" would be off the table. But then news from Europe, which takes its cues from its weakest members, threatened to undo any rally and lead us to a weaker open.
But in the end, as 10 a.m. rolled around, Cramer said it was strong U.S. economic data that set the tone for the markets. And with the U.S. economy taking center stage, that bodes well for U.S stocks, including retail, housing, technology, autos and restaurants, he concluded. Only the commodity related stocks, like mining and minerals, along with copper and metals, will hinge on news from China, said Cramer.
As for Europe, it looks like that beleaguered continent is off the front page, at least for the time being.
Sun Comes Out for Annie'sDon't be scared off by newly minted IPOs, Cramer told viewers, especially those with huge first-day rallies. He explained that sometimes, an IPO's high share price is actually warranted.
Cramer has gone on record many times telling investors that they should always avoid buying IPOs in the aftermarket. He often highlights deals that are good investments only if investors can get in on the IPO shares themselves. Cramer always recommends selling those same shares immediately after they pop on their first day of trading.
Such was the case with Annie's (BNNY) , the makers of healthy, organic foods that came public last Wednesday. Cramer said he initially panned the IPO, giving his usual "take the money and run" advice. But after taking some time to analyze the company, Cramer said that Annie's is one of only a few companies actually worth holding for the long run.
Cramer said his initial assessment of Annie's was a "snap judgment," and investors should think of the company as a younger sibling to Hain Celestial (HAIN) , the organic food juggernaut. He explained that Hain trades at 25 times earnings with a 13% growth rate, but Annie's is currently trading at just 23 times earnings, despite the fact that it's likely to be growing around 22% if it follows last year's trends.