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Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday December 19.

Covidien (NYSE:COV)

Sometimes breaking up is good to do for companies that can unlock more value separate than working as a unit. Covidien (COV) announced it is going to spin off its troubled pharma division from its medical devices business. Its pharma business currently represents only 17% of its sales, and Cramer calls the spin-off "the smartest thing Covidien has ever done." The medical devices and pharma businesses have been hard to manage within a single company, and the pharma segment has faced recalls, supply problems and competition from generics. The company trades at a multiple of 9 and would be worth 38% more as separate companies.

Yum Brands (NYSE:YUM), McDonald's (NYSE:MCD), Darden Restaurants (NYSE:DRI), Chipotle Mexican Grill (NYSE:CMG)

Yum Brands (YUM) is the world's largest restaurant operator, and is currently bigger internationally even than McDonald's (MCD). China is the driver of YUM's growth, with 75% of the company's locations, up from 48% in 2006. Compare this with Darden's (DRI) badly missed numbers; Yum predicts 10% earnings growth for 2012. China now accounts for 45% of YUM's revenues, with only 25% from domestic sales. With 4,200 locations in the Middle Kingdom, Yum could double its footprint there and still not face saturation. Chinese same store sales are a staggering 19%, but China isn't the only secret to Yum's success; the company is expanding all over Asia. YUM's domestic business has not been strong, but it accounts for only a small part of its revenues; there was talk of YUM spinning off Taco Bell, or even its entire U.S. business. YUM sells at a multiple of 17.8 compared to its 12.7% growth rate. Cramer would wait for a pullback to buy "one of the strongest international growth stories in the restaurant space."

Cramer took some calls:

Chipotle Mexican Grill (CMG) is a good company, but is also a high growth multiple stock, and such stocks are risky in the current environment.

McDonald's: Cramer would take a bit of MCD off the table.

Kinder Morgan Energy Partners (NYSE:KMP) vs. Plains All-American Pipeline (NYSE:PAA)

Kinder Morgan Energy Partners (KMP) has long been a favorite MLP of Cramer, but he decided to compare it to Plains All-American Pipeline (PAA), another pipeline play with promise. Both stocks have similar distributions: KMP yields 5.8% compared to PAA's 5.7%. PAA is one third of the size of KMP, but PAA has a significant footprint in the Bakken and is making smart acquisitions that will increase its assets. PAA expects its distribution to rise 8-9% by next year. While Cramer prefers KMP as a long-term play, he thinks PAA has enough short-term catalysts to make it a buy in the near term.


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Source: Cramer's Mad Money - The Smartest Thing Covidien Has Ever Done (12/19/11)