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Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday June 3.

CEO Wall of Shame: Valero's (NYSE:VLO), William R. Klesse

Just days after releasing AIG's former CEO Ed Liddy from the Wall of Shame and week after exonerating Andrew Liveris of Dow Chemical, Cramer inducted his newest inmate: William Klesse of Valero. What was Klesse's crime? First, the company gave a report that missed expectations rather dramatically; Valero was expected to report earnings growth of 73 cents a share and actually admitted to a 50 cent loss per share due to excessive downtime at two refineries and lower diesel margins. Worse than this was Klesse's value-destroying move of issuing a secondary offering of 40 million sharesat $18.47 when over the last three years, the company has bought back a total of 141 million shares at prices as high as $68; “I can’t think of a thing he would have done differently if his job were to deliberately sabotage the company,” Cramer said.

Teradyne (NYSE:TER)

On the unexpected decline in chip inventory, Cramer thinks companies involved in producing and testing chips are still buys, even though the tech space in general has had quite a run. Teradyne, which makes chip-testing equipment is a bellwether for the industry, and given the dramatically changed fortunes for chip-related companies, Teradyne, which holds 40% of the market, will benefit from the upturn. The company is making a $190 million worth of cuts and has plans for acquisitions in the high speed memory and flash memory spaces. Recently, the company reported better-than-expected earnings and raised guidance. Cramer still regards Teradyne as a speculative company and would do homework before buying, wait for a pullback and buy in increments.

Meeting in the Middle: JP Morgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), Transocean (NYSE:RIG), Schlumberger (NYSE:SLB), Occidental Petroleum (NYSE:OXY), FirstMerit (NASDAQ:FMER), Coca-Cola (NYSE:KO), Merck (NYSE:MRK), Kellogg (NYSE:K)

The bulls and bears are fighting it out over the hearts and minds of investors. But Cramer thinks things aren't nearly as bad as the bears think and may not be quite as rosy as the picture the bulls are painting. He recommended trading for a moderate scenario. For instance, some are worried about inflation and others are more concerned about deflation. Cramer thinks the most likely scenario is for mild inflation, a scenario that will be beneficial to banks like JP Morgan Chase and Goldman Sachs.

Higher gas prices may be bad news for retail as the consumer may want to save gas and stay at home, but there is no doubt that rising oil is bullish for oil companies. Cramer would play this trend with Transocean, Schlumberger and Occidental Petroleum. Rising interest rates may be counterbalanced by the $8,000 tax credit for first-time home buyers. First Merit is Cramer's choice among regional banks. While the weakening dollar is a concern for many companies, a strong dollar is worse for companies with significant international exposure. As the dollar drops, Coca-Cola, Merck and Kellogg look more attractive.

Cramer encouraged investors not to lose hope on down days like Wednesday. With the bullish march up, he says he would have been worried if there would have been no corrections.


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Source: Cramer's Mad Money - Valero CEO William Klesse: Welcome to the Wall of Shame (6/3/09)