Jim Cramer's Real Money Radio Recap 5/26

Recap of Jim Cramer's radio show on Wednesday May 24. Click on a stock ticker for more analysis:

General comment: Willard on Microsoft (MSFT) and Cash

Filling in for Jim Cramer, Aaron Task spoke to hedge fund manager and Real Money contributor, Cody Willard, who explained his move toward cash and Microsoft (MSFT), a stategy which has served him well during the current crisis. Willard said that he liked Microsoft because "the risk/reward setup might just be the best setup I will see in my lifetime," and that, even in a recession, Microsoft will only have a "$2 or $3 downside." Willard also feels that the unpopularlity of the stock could lead to an unexpected upside, and that the company's stronghold on the operating system business is an advantage. Willard also believes that Microsoft may have some hidden assets.

Concerning keeping money in cash, Willard says, "I sure like the market a lot more today than I did two weeks ago." However, he noted the instability of emerging stock markets in the Middle East and made a dire prediction that the risk of an economic slowdown is higher now than at any other time in the last four years. While he comments that, "If the Fed were to re-liquefy things, that would have me bullish," Willard recommends caution.

Fraud Forecast

Stories have been circulating around Wall Street that certain companies are striking executive stock options at the bottom price, locking instant profits to grantees. They are telling investors that the options were struck at-the-money, and that there are no baked-in-gains. "It's illegal, it's immoral, it's fraud," comments Task. Companies that might be involved in this scandal include: Juniper Networks (JNPR), Caremark Rx (CMX), United Health (UNC), and KLA-Tencor (KLAC). Task finds some consolation in a report by Cowan finding that no new firms have been implicated.

Bullish calls:

*Apple Computer (AAPL): Task notes that this stock is trading at a 200-day moving average, and Willard says the potential gain is huge, while the downside is probably only $5. He predicts that the Apple will obtain a triple-digit stock price by the year's end.

*Hewlett-Packard (HPQ): Task observes the major upturn in this stock since CEO, Carly Fiona, was dismissed. HPQ is trouncing Dell (DELL), and Task suggests taking some profits now and reinvesting in HPQ on a pullback.

Neutral/Bearish calls:

Contexant Systems (CNXT): This stock has suffered a huge drop, and Task recommends against investing in this kind of stock, despite its low price.

Broadcom (BRCM): Willard said of Broadcom, which has been implicated in the option backdating scandal, that "there is more upside than downside," but notes that this scandal will slow down the market, and will keep price/earnings multiples low.

Google (GOOG): Willard predicts that Google will turn around from its recent drop, but to wait a while. Task comments, "I like Google here in the $380 range because a lot of the froth is out of the market."

Ameritrade (AMTD): For people who are in the "house of pain" with stocks like Ameritrade, Task recommends setting a stop-loss order at a level below purchase price to prevent a big loss. This strategy will enable investors get rid of a stock automatically before a huge fall.

Allegheny Technologies (ATI): This stock traded at $66 on Friday, and Task discourages investors from buying more; "You want to put a stop-loss below its current level."

More: Cramer's latest stock picks, including: Mad Money Recap, Lightening Round, Stop Trading and his Radio Show.