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Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday April 18.

The Benefit of the Doubt: Intel (NASDAQ:INTC), IBM (NYSE:IBM). Other stock mentioned: Microsoft (NASDAQ:MSFT)

Not all companies deserve the benefit of the doubt when it comes to earnings, but Cramer thinks IBM (IBM) and Intel (INTC) have been unfairly knocked down. IBM has been terrific at meeting its earnings targets, but it didn't generate quite the revenue growth that The Street expected, and the stock was knocked down. IBM is transitioning to a business model that is lighter on hardware, and it reported that business was strong, even in Spain. Cramer thinks IBM's stock is just resting until it rises higher.

Intel (INTC) said it would have lower gross margins for the short-term, since it, like IBM, is in transition, but Microsoft's (MSFT) Windows 8 cycle should be good for INTC. Management said the latter part of the year will see a rise in gross margins. "IBM and Intel sometimes need to adjust to get it right,' said Cramer, adding that these stocks should be innocent until proven guilty.

Follow the Leader? Berkshire Hathaway (NYSE:BRK.A), (NYSE:BRK.B), Faceboook (NASDAQ:FB), Chesapeake Energy (NYSE:CHK). Other stocks mentioned: Halliburton (NYSE:HAL), SXC Health Solutions (SXCI), TransCanada (NYSE:TRP), Express Scripts (NASDAQ:ESRX)

Stocks fell on Wednesday, and Cramer thinks part of this might be due to the announcement by Warren Buffett that he has prostate cancer. While Buffett insists the problem is not life-threatening, "he is 81 and focused on his successors, so we should be too." Cramer spoke frankly that Berkshire Hathaway (BRK.A) (BRK.B) has a bundle of assets that have not performed as well in recent history as they have in the past. He doesn't think the company will necessarily be in trouble with someone else at the helm, who could look at Berkshire with a fresh pair of eyes and trim assets that haven't been working. He thinks the company doesn't have the focus it once did, but is still undervalued.

Onto other examples of the "Great Man Theory" of investing, Cramer discussed Facebook (FB) CEO Mark Zuckerberg's acquisition of Instagram, which he made without discussing the move thoroughly with the Board of Directors. Cramer would be leery of a CEO acting alone, but suggested a pragmatic approach that if the stock makes money, it might be worth taking the risk. He would buy the Facebook IPO if it is at the right price.

However, Cramer was more uneasy about Chesapeake (CHK) CEO Aubrey McClendon's borrowing money to purchase stakes without consulting the Board of Directors. Not too long ago, McClendon bought back shares of his company on margin, and after these shares plummeted, McClendon expressed regret over this move. With a commodity that can quickly decline in value, like natural gas, it might not be worth taking the risk on McClendon, and Cramer is more hesitant to recommend buying CHK than he was before this news broke. CHK is down 44% since last year.

Basically, sometimes it is worth playing "follow the leader" and sometimes it is not. It depends on whether or not the CEO is creating value for shareholders.

Cramer took some calls:

Halliburton (HAL) rose on the fact that few expected the stock to be able to offset its natural gas assets. The stock should do well as long as Brent doesn't fall below $90.

SXC Health (SXCI) is one of the best-performing stocks Cramer has recommended. He would hold the stock and thinks it will perform well against competitor Express Scripts (ESRX).

TransCanada (TRP) is a solid Canadian company that doesn't need to rely on the decisions of U.S. politicians to make money.

CEO Don Wood, Federal Realty (NYSE:FRT). Other stock mentioned: Bed, Bath and Beyond (NASDAQ:BBBY)

With worries expressed about the future of brick and mortar retail in the face of competition from ecommerce, some of these retailers are bucking the trend. Federal Realty (FRT) is a REIT that specializes in shopping centers and is not tethered to a few retailers, but is diversified. Its centers are located in many areas of the country, many in affluent neighborhoods. The REIT was able to raise rents by 9% last year and consistently raises its dividend, which, at 2.8%, would be higher if it hadn't been for the rise in share price. With reinvested dividends, the stock has doubled since Cramer got behind it in 2009.

Don Wood says that many of its retailers, including Bed Bath and Beyond (BBBY) are able to stave off competition from ecommerce because it is so well-run. "I haven't felt as optimistic about the future as now," said Wood, citing improvement in consumer confidence and more transparency about future earnings. The company is buying assets and developing projects that will be accretive in the very near future. FRT is seeing dramatic improvement in California, and Wood thinks the state will be "booming" for the next few years. FRT has 44 years of consistent dividend raises, and will continue this policy. Cramer thinks FRT is the best shopping center REIT.

CEO Interview: Scott Wine, Polaris (NYSE:PII)

Discretionary spending is back in style, which is good news for Polaris (PII), leading manufacturer of snowmobiles, motorcycles and ultra-light vehicles for the military. The last time PII reported earnings, its guidance was considered disappointing, but the stock rose anyway, and the company, as a vote of confidence, raised its dividend by 64%. Recently, PII delivered an 8 cent earnings beat on revenues rising 25%. The stock rose 10%. Polaris is launching new products and expanding overseas. CEO Scott Wine discussed the growth of the domestic business and the 20% growth internationally. Polaris missed its target to have 30% of its revenues from overseas, but Wine said this was due in part to the rise in domestic sales, and predicts it will hit its 30% target in the next few years. The mild winter only marginally affected snowmobile sales because the product does double duty as a mountain sled, which still sold well in certain areas. Cramer is positive about Polaris.


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Source: Cramer's Mad Money - IBM and Intel Deserve The Benefit Of The Doubt (4/18/12)