Jim Cramer's August 5 Stock Picks

by: Insider Monkey

Jim Cramer is one of the top watched TV personalities on CNBC. He is the host of mad Money and also the co-founder and chairman of TheStreet.com. Nearly two hundred and fifty thousand people watch his show daily on TV and most of these are ordinary investors trying to understand what’s going on in the market. Jim Cramer’s bullish and bearish stock picks on his show is the starting point for many investments made by these folks.

During the August 5th show, Cramer discussed the following stocks.

Mark West Energy (NYSE:MWE): Yielding 6.4%, Cramer said the time is right to own this limited partnership pipeline company. More information would be available after the company’s conference call on Tuesday, August 9th.

Disney (NYSE:DIS): Cramer feels Disney is one of the best companies on the planet and thinks that the recent decline in the stock price is a gift and that it should be bought. Especially when the drop in oil prices is taken into consideration.

Cisco Systems (NASDAQ:CSCO): While openly against technology stocks in this market, Cramer said this company is too much of a bargain under $15 and should be purchased going forward. Sandy Nairn’s Edinburgh Partners has 10% of its portfolio in Cisco Systems. (See more of Sandy Nairn’s picks here).

SodaStream (NASDAQ:SODA): Reinforcing yesterday’s statement, Cramer believes deep in the money calls is the way to play this stock as he believes Christmas season will be especially strong for the company.

JC Penney (NYSE:JCP): Ron Johnson, Apple‘s SVP of Retail has been selected to become the president of JC Penney and will likely become the CEO at the beginning of the year. The stock jumped 6% on the news. JC Penney reported 4Q (2010) earnings of $0.84 cents per share, which beat estimates and is currently trading at 17 times earnings.

Veolia Environment (VE): Cramer does not like Veolia Environment and dismissed it as a second rate company to steer clear of.

Equity Residential (NYSE:EQR): Cramer expressed that he likes these REITS, but he prefers buying ones with bigger yields. Since EQR only yields 2.5%, Cramer is willing to buy Health Care REIT (NYSE:HCN), which yields 6.25%.

Cedar Fair (NYSE:FUN): This Midwest-based theme park operator received a buy recommendation from Cramer on the basis of being a high-yielding stock. While the yield is only 2.3% currently, it is poised to increase to 5.8% since the company reaffirmed a $1 dollar per unit payout by the end of the year. The company also announced intentions to double the payout to $2 dollars per unit, which would create an 11.6% yield at current levels.

This is a feasible adjustment since Cedar Fair cleaned up its balance sheet and refinanced its debt. The theme park operator is also the beneficiary of the drop in oil prices since the majority of their customers come from within a 150 mile radius.

Exxon Mobil (NYSE:XOM): Cramer exclaimed that Exxon Mobil was fine after a viewer called in asking if his whole position should be dumped. Chevron (NYSE:CVX) is still Cramer’s preferred oil stock. Bill Miller at Legg Mason Management has upped his position in Chevron (See Bill Miller’s top stock picks).

Anworth Mortgage (NYSE:ANH): Cramer considered this mortgage REIT to be a survivor and that it was safe for a viewer to hold, but not worth buying a position into.

O’Reilly Automotive (NASDAQ:ORLY): This auto parts company experienced a 10 point dip off of July’s high. Cramer’s advice, however, was to ride it out because these are the companies that need to be purchased in this environment. Cramer then referenced AutoZone (NYSE:AZO) as an alternative.

TAL International (NYSE:TAL): While it is a well-run company, Cramer advises against getting too big of a position in it. A metal container (transport) company will not fare well if the country heads into a recession.

Caterpillar (NYSE:CAT): Cramer gave a buy recommendation to Caterpillar, especially if the stock were to tick lower. United Rentals (NYSE:URI) is a CAT distributor who has reported selling out of the equipment last month. Ken Fisher’s Fisher Asset Management has a particularly large holding of Caterpillar stock. (Check here for more hedge funds holding CAT stock).

3D Systems (NYSE:DDD): Stumped by a viewer’s request of this stock on yesterday’s program, Cramer advised viewers to be wary of this stock. 3D Systems is a company that provides 3D printing, prototyping and manufacturing solutions and master planning for tooling. All of this allows its customers to make prototypes of models at home and prevents outsourcing.

Cramer was wary because of the firm’s “lumpy revenue” paired with the fact that it executed over 15 acquisitions with not one successful integration to date.

Kraft (KFT): A viewer inquired about Kraft being a buy after the split. Cramer withheld a buy recommendation because the split already happened. He said the goal is to try and get ahead of the next split.

Cramer recommends Pepsi (NYSE:PEP), General Mills (NYSE:GIS) or Kellogg (NYSE:K) if you want a packaged goods company. This is on the basis of being better-run companies combined with the declining energy/oil raw costs.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.