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Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Wednesday, July 30.

“It smells to me like something, in fact many things,” he said, “have at last changed for the better.” “I am indeed sticking my neck out right here, right now,” Cramer continued, “declaring emphatically that I believe the market will not revisit the panicked lows it hit on July 15.” With earnings coming in strong across the board, except in the financial sector, Cramer said the markets may finally be leaving the bears behind. He said the negativity in the market is striking. He cited an investor intelligence survey, which indicated that only 30% of investors are bullish, while 50% are bearish on the markets. "It's always darkest just before the dawn," he said.

The Blueprint for Financials: Merrill Lynch's (MER), Lehman (LEH), Citigroup (NYSE:C), Wachovia (WB-OLD)  

Evidence for the bull case keeps growing. Merrill Lynch's blueprint for flushing their bad debt is one positive sign that the markets may be turning around. "We've been waiting for a blueprint, and that's exactly what they gave us," he said, noting that shares of the company rallied again today. This paves the way for Lehman Brothers, Citigroup and Wachovia to follow suit. 

Stocks Showing Strength: Clorox (NYSE:CL), Cummins (NYSE:CMI), Avon (AVN), US Steel (NYSE:X)

Cramer also noted strength in such diverse companies as Clorox, Cummins, Avon and US Steel as further evidence that the market is beginning to turn. How’d they do it? Price increases. And now that raw costs have come down, Cramer’s expecting a load of upside surprises because those price increases will stay put.

Oil Dead Cat Bounce:

Furthermore, Cramer said with oil prices falling from $148 to $121 a barrel will continue to bode well for the markets. He predicted oil could continue to fall as low at $110 a barrel before finally stabilizing. He thought Oil was allowed a dead cat bounce. With other commodities, like gold, also following suit, Cramer said many industries could continue to provide the market with upside surprises.

Shorts Still Have to Wear Clothes: Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC)

Finally, Cramer called the Security and Exchange Commission's short-selling protection plan for the financial stocks "monumental," saying that the move will finally stabilize the financial sector. He also praised the Federal government's plan allowing Bank of America, Wells Fargo and other banks to sell bad mortgages to the FHA for just 80 cents on the dollar. This is a huge bail-out. “The next big dip in the market may be the last one,”

“Bye, bye bear market,” Cramer said. “Say hello to the bull and don’t let the door hit you on the way out.”

Ride the Blackberry Bold Research in Motion (RIMM), Motorola (MOT), Apple (NASDAQ:AAPL)

Cramer proclaimed that August will be Research In Motion month, ahead of the launch of its newest product, the Blackberry Bold. “The iPhone isn't the only way to show off to your friends,” joked Cramer, who called Research In Motion a steal at just $119 a share.

Cramer based his thesis on their new product cycle scheduled for the next few months. In addition to the Bold, Research in Motion is set to release the Kickstart, dubbed the Motorola killer, and the Thunder, which is said to be the first serious iPhone contender. In addition to the new products, Cramer noted the company's further expansion into overseas markets. He was not concerned by Research In Motion's recent earnings guide-down, attributing the shortfall due to simply an increase in marketing and research and development costs for the many new products on the runway.

Cramer said he's also not concerned about Apple's iPhone affecting the company's bottom line. “There plenty of room for both companies to grow,” he said. Finally, Cramer cited his past track record with RIMM as another reason to buy the stock. He said the company's shares have risen 117% since he last recommended the stock on June 6, 2007 at $53.04.

The Way to Play: Nokia (NYSE:NOK), Qualcomm (NASDAQ:QCOM), Garmin (NASDAQ:GRMN), Motorola (MOT), Apple (AAPL)

Cramer said a better way to play Nokia is to buy Qualcomm. Qualcomm made a landmark 15 year agreement with Nokia. Qualcomm is the only semiconductor company I am recommending. Cramer also commented “Garmin - what a piece of junk.” “In the end, I like Nokia and Qualcomm much more than Motorola,” Cramer told a viewer. “I feel better about Steve Jobs’ health but I am still not a buyer of Apple at this level.”

Red Hat Bounce: Red Hat (NYSE:RHT), Microsoft (NASDAQ:MSFT). Oracle (NYSE:ORCL), NYSE Euronext (NYSE:NYX)

When the New York Stock Exchange needed an operating system to handle its innumerable amount of worldwide transactions, it didn’t turn to Microsoft. No, that honor went to Red Hat. “The New York Stock Exchange would never run on Windows,” CEO and President Jim Whitehurst told Cramer Wednesday. “It crashes too often.” Cramer talked with Jim Whitehurst, president and CEO of Red Hat. Whitehurst said Red Hat has a special business model that no other competitors have. The company's large developer community provides it with great software at little cost, allowing Red Hat to have higher than average margins. He further explained that Red Hat's Linux operating systems run in many large, mission critical applications where Microsoft just can't compete. He cited the NYSE Euronext as one such large customer. Whitehurst said that Oracle is a partner of Red Hat and not a competitor, saying that the company recently endorsed Red Hat as its operating system of choice. Cramer called Red Hat an inexpensive stock when compared to its growth rate and recommended looking into the company as an investment. “Think about this one,” Cramer said. “Do some homework. I think Red Hat is, despite its PE multiple, inexpensive given that growth rate.”

 
Am I Diversified?
Portfolio 1:

General Mills (NYSE:GIS) -- “Well run.”

Boeing (NYSE:BA) -- “Down in the dumps but a great company with great cash flow.”

Darden (NYSE:DRI) -- “When Benigan’s closed, you should be thinking Darden, Darden, Darden.”

AT&T (NYSE:T) -- “I can’t believe it is at a 52-week low. I want to buy it hand over fist.”

IBM (NYSE:IBM)
Perfect diversification. You should be around a long time.”

 

Portfolio 2:

Vivo Participacoes SA (NYSE:VIV) -- “This is a Brazilian Telecom play.”

Dr. Reddy (NYSE:RDY) -- “India's top drug maker by sales, has grown globally by selling generics -- cheap copies of off-patent branded drugs.”

Tata Motors Ltd. (NYSE:TTM) -- “This Indian car company makes the most inexpensive car in the world.”

Coca-Cola (NYSE:KO) -- “This is the world’s leading soda brand. The stock should be moving up. It is so cheap.”

Motorola (MOT) -- “Another Telecom.”

The portfolio has two telecoms. I would like you to sell one and buy either a defense play or a conglomerate. I was going to say General Electric (NYSE:GE).”

 

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Source: Bye Bye Bear - Cramer's Mad Money (7/30/08)