Jim Cramer's Mad Money In-Depth Stock Picks 5/25

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Wednesday May 24. Click on a stock ticker for more analysis:

Recession Protection: Kellogg (K) and Pepsico (PEP)

Cramer is worried that the Federal Reserve may raise short-term interest rates to 6.5%, which will increase odds of a recession. He recommends buying stock in the food and beverage sector, which usually performs well even in an economic slump. He discussed General Mills (GIS), Kraft Foods (KFT) and Kellogg (K), rejecting Kraft as a "serial cereal underperformer" with the stock at an "untouchable" level of 17 times earnings. Cramer called Kellogg "the one to pick as the best in class." Cramer chooses Pepsico (PEP) over Anheuser Busch (BUD) and Coca-Cola (COKE), since Pepsi trades at 20 times earnings and is diversified outside of cola, unlike Coca-Cola.

Paper Trail

Cramer' questions the move from one the Toll Brothers (TOL) family members to buy a stake in The Philadelphia Inquirer, since growth in newspapers is not sustainable and may fall to 2%. Cramer suggests getting into the recession-friendly housing market -- via TOL -- instead. Though a hike in interest rates may temporarily discourage home-buying, "slow sales are already baked into the stock price."

Biotech Picks

Cramer likes Genzyme (GENZ), which has just been upgraded, and Gilead Sciences (GILD) because of its "anti-HIV triple-play cocktail." Cramer was bullish on Celgene (CELG), a "$50 stock masquerading as a $40 stock," which has the only effective treatment for multiple myeloma, and BioMarin (BMRN), which is developing many new drugs.

Interview with Coach (COH) CEO, Lew Frankfort

Despite the fact that Coach has been reporting excellent earnings, investors are shying away from COH. "We had excellent same-store sales," says Lew Frankfort, "but we were penalized and it defied fairness." Because Frankfort has cancelled his personal stock-selling program, Cramer is touting COH: "Twenty-nine goes back to $37," he said. "Stay with Coach."

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