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Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday November 28.

Give Credit Where Credit Is Due: Northrop Grumman (NYSE:NOC), Raytheon (NYSE:RTN)

Although Monday saw a terrific rally, now is no time to be complacent, since credit problems in Europe can easily find their way to our shores. While many in America believe the credit problem in Europe is a European issue, this crisis can have a domino effect and be disastrous for U.S. companies. Not only are European banks failing because they lent money to ailing countries, but if overseas banks fail, there could be huge implications for U.S. banks. In addition, many domestic banks have lent money or bought European bonds, and they are not required to reveal exactly how much they lent to whom. If European countries and banks default, this could spell trouble for the American financial system.

Cramer would sell into the rally any stocks that are affected by credit, like financials, airlines and some oil and gas companies. He would also sell high-flying, low or no dividend stocks that tend to get shot out of the sky when times are hard.

Cramer took a call:

Northrop Grumman (NOC) and Raytheon (RTN) are likely to be negatively affected if there are defense spending cuts, and Cramer thinks these cuts will be made. He prefers Raytheon, but for those who feel the need to own a defense stock, he would not buy either one until the stock price falls to a level where they yield 4 or 5%.

Macy's (NYSE:M), Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), Kinder Morgan Partners (NYSE:KMP), MarkWest Energy Partners (NYSE:MWE), Cedar Fair (NYSE:FUN), Panera (NASDAQ:PNRA), Oneok (NYSE:OKE), Papa John's (NASDAQ:PZZA), Domino's (NYSE:DPZ), Dollar Tree (NASDAQ:DLTR), Amazon (NASDAQ:AMZN)

With the Dow climbing 291 points on Monday, the strategy of the day was a "headlong rush into whatever happens to be working at this moment." Is this the time to adopt a conservative attitude? Cramer answered an emphatic "Yes...You don't need excessive risk to get excessive reward." He would sell high flyers and look for steady stocks that have a track record of weathering an inclement market. The rally happened because of a delayed surge in retail after a lackluster Thanksgiving weekend. Those who bought Macy's (M) on Friday would have seen a 4.5% uptick on Monday, Apple (AAPL) rose 13%, Google (GOOG) rallied $25 and Amazon was up $11.75. However, few could have foreseen a retail recovery, and retail numbers need to stay consistently strong to make these stocks buys. In any case, most are at levels they were 10 days ago, so those who bought these stocks were just breaking even.

Cramer would look instead to the 52 week high list for stocks that have thrived in spite of a hostile economic environment. There are only a dozen stocks on this list, mostly speculative pharma names, and Cramer identified a few to take a look at. Kinder Morgan Partners (KMP) hiked its distribution and is at its 52 week high. Another consistent performer is MarkWest Energy (MWE), which yields 5.5% and transports natural gas. Cedar Fair (FUN) has raised its dividend to 7.2%, and the yield might climb to 9% by next year. Oneok (OKE) is another low-risk natural gas play. Papa John's (PZZA) is performing well, but Cramer would buy lower risk Domino's (DPZ), down a point after a splendid quarter. Although Panera (PNRA) is a high-growth stock that carries some risk, it is the right stock to own right now. Stick with high-yielding, consistent stocks and "You will come out of this European contagion snug, safe and sound."

Cramer took some calls.

A caller asked about ETFs, but Cramer prefers doing homework and picking good quality stocks to avoid those names in any ETF index that are not worth buying.

Dollar Tree (DLTR) is trading on low volume, but Cramer is not concerned because it is an excellent company that reported a strong quarter. He thinks it is one of the strongest retailers.

Home Depot (NYSE:HD) and Lowe's (NYSE:LOW)

Home Depot (HD) is a stock that can be owned in the current environment. It is a comeback story with fantastic leadership, and recently raised its dividend by 16% to 3.1%. While that is not a high dividend, it is better than that of many retailers and provides a cushion for down days. Home Depot is doing well in spite of the sluggish housing market, and is only a couple of points off its 52-week high. It reported an upside surprise with a 2 cent earnings beat on stronger than expected revenues. Same store sales were up an impressive 8.3%, which is an acceleration from the 5% same store sales climb of last quarter. The raised guidance and the aggressive dividend boost are both bullish indications on the future of the company and an expression of confidence. Management even altered the dividend policy; now 50% rather than 40% of earnings will be devoted to the dividend payout.

Radical restructuring, remodeling of stores, closing non-performing locations and cost cutting led to the success of HD, which is trouncing its competitor Lowe's (LOW), a company 3 years behind HD's restructuring plan. Cramer thinks HD will soon see a 20% growth rate, and trading at a mutliple of 13.7, it is a bargain.

Sell the Banks

Banks are cheap and rightly so. No one knows how much European debt U.S. banks own. The U.S. government is going to continue its policy of punishing banks with burdensome regulation. Even the best banks have little or nothing in the way of buybacks, momentum, catalysts, takeover potential and dividends. The best strategy for banks is sidestepping the toxic group. "Sell the banks," Cramer said. "There is nothing there."

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Source: Cramer's Mad Money - Give Credit Where Credit Is Due (11/28/11)