Jim Cramer's Mad Money In-Depth Stock Picks, Feb. 8

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Includes: BAC, DEO, DST, GS, LVLT, LVS, MO, SHLD, STI, STT
by: Miriam Metzinger

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday February 8. Click on a stock ticker for more analysis:

Fortress Investment Group, Sears Holdings (NASDAQ:SHLD) and Goldman Sachs (NYSE:GS)

Cramer comments that Fortress Investments, which will become the first publicly traded hedge fund on Friday, will serve as a yardstick for Sears which is really an investment, rather than a retail, business. Cramer calls Sears' CEO Eddie Lampert "one of the best money managers in history," but because there were no publicly traded hedge funds up until now, there has been no way to gauge SHLD's worth. "Fortress' multiple, which will probably be 17 times earnings, tells us what we should pay for Sears' investment business," Cramer said, and noted that investors will realize that Sears is cheap. While some think that Fortress could also be a gauge for GS, Cramer does not agree, since GS is more than a hedge fund. He predicts that SHLD will rise to at least $237 a share from $180.81.

State Street (NYSE:STT), Investors Financial Services (IFIN), DST Systems (NYSE:DST), Bank of America (NYSE:BAC), SunTrust (NYSE:STI)

Cramer says that asset management firms like DST "should have gone up huge" when STT made a bid to acquire IFIN. This didn't happen, and Cramer thinks it is "wrong" but would use the opportunity to buy DST, which he believes is the next takeover target. He thinks potential buyers may be BAC or STI, and even if DST doesn't get bought, it had a "blowout" quarter, is still cheap and has good fundamentals. Although DST is not worth as much as Investors Financial, it should increase from $71.94 to $88.

Sell Block: Avon (NYSE:AVP), Wells Fargo (NYSE:WFC), Goldman Sachs (GS), Abercrombie & Fitch (NYSE:ANF), Circuit City (NYSE:CC), Best Buy (NYSE:BBY)

Cramer said he regretted placing Andrea Jung on his bad CEO list, because Avon recently reported a great quarter; "the company showed real growth afte a long time," he said. Although Cramer has liked WFC for "seemingly forever" he would sell since he feels it is expensive. Cramer said it isn't necessary to drop one's entire position, but would swap some into GS. Cramer would take profits in ANF, would sell CC and would buy BBY.

Mad Mail: Altria (NYSE:MO), Las Vegas Sands (NYSE:LVS), Diageo (NYSE:DEO), Level 3 Communications (NASDAQ:LVLT)

Cramer commented that MO and DEO have solid dividends and do not resemble LVS which is a "high-rolling, conceivably one-month shortfall of a Macau stock." Cramer sees a turnaround in LVLT, which is taking care of its debt, but he suggested doing homework and checking out the company's conference call before buying.

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