Cramer's 'Mad Money' Recap: Star Spangled Portfolio (Final)
NEW YORK ( TheStreet) -- Old dogs may not be able to learn new tricks, but Jim Cramer told his "Mad Money" TV show viewers Tuesday that old companies sure can. That's why Cramer said it pays to own not just the hottest growth stocks, but also to invest in great American companies with a long history of reinventing themselves.
On a day when Apple (AAPL) , a stock which Cramer owns for his charitable trust, Action Alerts PLUS, reported yet another blowout quarter, Cramer reiterated that Apple should be viewed as an investment and not a short-term trade. He said the company continues to fire on all cylinders and shares remain far too cheap.
Cramer said all of these companies have posted strong earnings and offer solid dividend protection to boot. AT&T continues to push forward with the iPhone, while Eaton and Honeywell are making strides in energy efficiency. IBM just announced a meaningful stock repurchase program, said Cramer, while 3M has decades of dividend raises under its belt.
Cramer said of course the high growth names like Apple, along with Starbucks (SBUX) and Allergan (AGN) should also be in investors' portfolios, but not to the exclusion of these outstanding old-line companies.
Executive DecisionIn the "Executive Decision" segment, Cramer sat down with Farooq Kathwari, chairman, president and CEO of Ethan Allen (ETH) , a stock that's down 10% so far this year, despite the company reporting a 1-cent-a-share earnings beat on an 8% rise in revenue.
Kathwari said that the recession afforded Ethan Allen an excellent opportunity to reposition itself for growth and that's exactly what the company has been doing. He said every quarter earnings have been increasing faster than revenues, as the company levers itself into increased efficiency. Ethan Allen is also rewarding shareholders with a recent 29% boost in its dividend.
Kathwari said that Ethan Allen is now a perfect blend of personal service and technology, using both the power of its 294 design centers as well as affiliated designers that can extend the company's reach even further. Kathwari noted that 60% of the company's items have been redesigned, a remarkable feat in a very short period of time.
Turning to China, Kathwari said that Ethan Allen continues to build its brand in China and now has 70 locations. Elsewhere in the world, the company just opened a manufacturing facility in Honduras that, along with a plant in Mexico, helps Ethan Allen keep tight controls on its manufacturing, while avoiding the pitfalls of outsourcing to the Far East. Kathwari noted that 70% of all Ethan Allen products are still made in the U.S., however.