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Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday January 5.

7 Dogs of the S&P 500: Nvidia (NASDAQ:NVDA), Dean Foods (NYSE:DF), H&R Block (NYSE:HRB), Intuit (NASDAQ:INTU), Netflix (NASDAQ:NFLX), Blockbuster (BBI), Apollo (NASDAQ:APOL), Diamond Offshore (NYSE:DO), Schlumberger (NYSE:SLB), Weatherford (NYSE:WFT), SuperValu (NYSE:SVU), Western Digital (NASDAQ:WDC), Pulte Homes (NYSE:PHM), Bank of America (NYSE:BAC)

Sometimes dogs have their day, like Nvidia (NVDA) which Cramer predicted would have its last bad quarter and is up 55% from where he recommended it in July. Then again, some dogs just stay dogs. A "cheap" stock may be just a value trap and become cheaper. Cramer dedicated Wednesday's show to discussing the dogs of the S&P 500, isolated the seven worst performers that were downright dogs, and identified the three laggard names that are likely to become winners once again.

1. Dean Foods (DF) is the "mangiest ugliest dog" of the S&P 500. This producer of milk products was decimated by overcapacity and its lack of new product cycles. "Got milk? I hope not!"

2. H&R Block (HRB) is off 47% from last year. This brick and mortar tax preparer is quickly losing share to Intuit (INTU). In fact, Intuit seems to be doing to HRB what Netflix (NFLX) has done to Blockbuster (BBI).

3. Apollo (APOL) took a 34.8% dive since last year and it is worthwhile to stay away from for-profit college stocks which are up for another bashing in 2011 with bad student loans.

4. Diamond Offhsore (DO), down 34% is tempting given the return of offshore drilling, but the company has the wrong rigs and is outshone by Schlumberger (SLB) and Weatherford (WFT).

5. SuperValu (SVU) has no value and is down 24% since last year. The stock got hammered because of a badly executed acquisition and is unlikely to cope with a highly competitive grocery sector.

6. Western Digital (WDC) is off 24% and is an old school tech play that is being replaced by flash. The stock has also made too big a move already.

7. Pulte Homes (PHM) has declined 25% over the past year, and is the nation's largest homebuilder. While Cramer has predicted a comeback for housing, he thinks the sector will coast along the bottom until 2012. For a housing play, he would buy Bank of America (BAC) which owns homes rather than a homebuilder like Pulte which is selling homes at lower prices than it used to. The company's balance sheet can only be handled with "a scooper and a plastic bag."

Three Good Dogs of the S&P 500: Micron (NASDAQ:MU), AK Steel (NYSE:AKS), Southwestern Energy (NYSE:SWN), Apple (NASDAQ:AAPL), Nucor (NYSE:NUE)

After discussing the S&P 500's mangy curs, Cramer praised the three good dogs which may find their way to best of breed status.

1. Micron (MU) is down 24% since last year and is a memory chip DRAM and flash producer. While it has its work cut out for it getting its flash segment going, it has already made significant progress updating its technology; its flash business is now Micron's largest profit driver. The CEO hinted on the company's conference call that the company might see more involvement with Apple (AAPL), and Micron may soon become an Apple derivative play. While the company missed "big time in its miserable, loathsome" report on December 22nd, the stock is cheap and trades at a low multiple of 8.

2. AK Steel (AKS) is off 23% since last year and unlike other dogs, it is not a value trap; "you can't get more cyclical than a steel maker." The stock has already started making a comeback since July, and Cramer thinks it will continue to see more upside, especially since aluminum and steel, the metals that are the last to recover, have yet to make their moves. However, Nucor (NUE) with a 3.3% yield is still best of breed. However, Cramer thinks AKS could be an attractive takeover target and would buy some on a pullback.

3. Southwestern (SWN) is a good company that has suffered mainly for its 100% natural gas exposure at a time when the fuel is disastrously cheap. The stock is down 22% since last year, and still has stellar growth and execution. Cramer thinks natural gas is poised to stabilize and since SWN is a very low cost operator, it can still make a profit even if natural gas goes lower. SWN has the highest return on capital in the industry, has high reserve replacement rates and 17-19% production growth.

Stop Worrying and Learn to Love Corrections: Citigroup (NYSE:C), JP Morgan (NYSE:JPM), Alcoa (NYSE:AA), Ford (NYSE:F)

"That was some correction," commented Cramer on Wednesday's action which saw the Dow drop 35 points to close up 32. He has predicted that corrections will be more common in 2011; "It is time to stop worrying and learn to love corrections." Investors should see bearish action as reasons to buy good stocks cheap rather than to flee to the sidelines.

Cramer thinks the market has really done "nothing" the last ten years and is poised for a major breakout while the bears are fearing a major pullback. The pundits feel that few stocks have a right to run up, and don't consider that the news might actually be good, especially with the bullish ISM survey on industry and improved job numbers.

The suspicion that Bank of America (BAC) is up too much even though it is eliminating its biggest risk by settling with Fannie Mae and Freddie Mac is absurd; before the credit crisis, the stock was trading at $50 and now it is at $15. People are worried about bad loans, "talk to me when BAC hits $20," Cramer said. Citigroup (C) trading at one-tenth its former price, while it is a better bank than it was before the crisis and is growing its international sector. JP Morgan (JPM) is raising its dividend, executing terrific acquisitions and has a "fortress balance sheet." Cramer thinks JPM is the strongest bank in the world.

Alcoa's (AA) downgrade was downright illogical; the stock is considered expensive for rising from $13 to $16 when it used to trade at $40. When it was more expensive, it lacked international exposure and strong cash flows. For those who think Ford (F) is stalled at $18, "soon you can kiss the teens goodbye" as it speeds ahead into the 20s.

Even though stocks have become a "disgraced asset class," like democracy, they are better than the alternatives. "Stocks are moving higher. Don't miss it," said Cramer.

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Source: Cramer's Mad Money - 7 Worst S&P 500 Stocks (1/5/11)