MAD MONEY: CRAMER GIVE THOSE FOOD AND INSURER PICKS

Cramer was a bit optimistic today saying that one man’s treasure is another man’s gold.  It’s true for every disaster there is someone benefiting.  9/11 – Security companies.  Iraq War – Defense companies.  Katrina – Infrastructure companies.  Mortage problems – Buy of cheap bonds!  Cramer suggested that you look into insurers who buy these investments and profit handsomely because they have plenty of cash from insurance premimums especially under these stable conditions.  Insurance companies, he said, continually invest their money and are “gigantic cash machines.” However, not all insurance companies are “created equal,” he said. .

Cramer currently owns American International Group, Inc. (AIG) for his charitable trust but he recommended The Travelers (TRV). Cramer said it was “the best of the best,” Cramer said that Travelers knew how to be opportunistic especially when the credit spreads were widening making good bonds look like a steal.  He thinks that we all can “make a fortune if we invest in companies buying debt.  Travelers is a top Fortune 100 company and is the second largest underwriter of auto and homeowners policies which is a very stable business.

FOOD TRADE:

Staying defensive, next sector was food where Cramer thought would bring us back to the “black.”  Cramer suggested food makers Kraft Foods (KFT) and Proctor & Gamble (PG) because they both can sell off less profitable and well know brands to other itnernationl companies that need some branding and become more profitable.  Jimbo referred to Ad Age Magazine which recommened General Mills (GIS), PepsiCo (PEP) and ConAgra Foods (CAG) as great picks as well.

A more speculative food pick was Treehouse Foods (THS) which has been on an “acquisition spree” which makes it more risky because of possible consolidation problems but they own decent brands in Santa Fe, Del Monte and Oxford, with a foreseeable purchase of Kraft’s line of salad dressing. Treehouse posted a year-over-year profit increase of 42% in the second quarter.

Next food pick was B&G Foods (BGS) which owns brands such as Ortega, Cream Of Wheat and Underwood. With just a 12.3% in sales, this pick is much more conservative but it has a yield of 6.74% according to Google Finance.

ON SHOW INTERVIEW

In an interview with Trinity Industries (TRN) Chairman, President and CEO Timothy Wallace, Cramer suggested that the company was starting to move despite it’s 20% drop in stock price.  Wallace said that it was experiencing the greatest revenue growth because they are in the railroad industry which is seeing a lot of interest since Buffet started buying as well.  However Cramer said it’s not a buy right now but it’s a good long term pick.

LIGHTNING ROUND HIGHLIGHTS:

Research In Motion (RIMM): “I’m staying bullish. Let me explain why. I have been using a 1990 paradigm. … What stayed strong during that? The highest-growth companies with the best balance sheets. When I think of Research in Motion, like when I think of Garmin, the highest-growth companies with the best balance sheets. … I am not backing away from a stock like Research in Motion.”  Interesting pick even though a lot of people may start selling soon.

ViroPharma (VPHM): “I screwed up on ViroPharma. … Ever since then, I have hated it. … I am still a seller of ViroPharma.”  Nothing like a man who admits his mistakes…you heard him…SELL IT!

Cramer reiterated buys in ” Intel (INTC), Hewlett-Packard (HPQ) , EMC (EMC) and Cisco Systems (CSCO)”

Intel, INTC, Hewlett-Packard, HPQ, EMC, Cisco Systems, CSCO, Research In Motion, RIMM, Trinity Industries, TRN, B&G Foods, BGS, Treehouse Foods, THS, General Mills, GIS, PepsiCo, PEP, ConAgra Foods, CAG, American International Group, Inc., AIG, The Travelers, TRV