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“Coal is hot, getting hotter. I need you in Peabody (BTU) coal,” Jim Cramer said.

As the prices of natural gas and oil increase, coal, a cheaper alternative for electricity production, takes market share.

Peabody has 50 years’ worth of coal reserves and is best-of-breed in the coal sector, Cramer said.

Cramer was bearish on Foundation Coal (FCL), Consol Energy (CNX), Arch Coal (ACI) and Massey Energy (MEE).

Asked for names of companies that supply the coal industry, Cramer mentioned Joy Global (JOYG), Terex (TEX) and Bucyrus (BUCY) as good buys.

Herb Greenberg segment

Herb Greenberg says he hasn’t changed his bearish take on Johnson Controls (JCI) now that they are buying York International (YRK).

Cramer said that Johnson Controls was emphasizing its more profitable controls business and deemphasizing its struggling auto business. “It takes itself out of the 11-to-12 multiple [category] of Lear (LEA) and goes to a 20 multiple.”

Cramer also likes another stock Greenberg has panned: Jarden (JAH). Cramer thinks it will win by default in the small-appliance sector, as its two main rivals, Applica (APN) and Salton (SFP), struggle under too much debt.

Speculation

Johnson & Johnson (JNJ) is being forced by the European Union to sell three of its businesses in order to receive the EU’s OK of its acquisition of Guidant (GDT).

Cramer said he would buy Edwards Lifesciences (EW) on speculation that they might be able to buy some of those businesses cheaply. Cramer warned that Edwards is a “dog” of a stock and that buying is only for a trade.

Toll Brothers (TOL) reported a “stellar” quarter Thursday but saw its stock trade down. Action like that is the “trading death knell” said Cramer.

Lightning Round

Bullish - News Corp. (NWS), Microsoft (MSFT), XM Satellite Radio (XMSR), Aflac (AFL), Internet Security Systems (ISSX), Bancolombia (CIB), UnitedHealth Group (UNH), St. Joe (JOE), Cimarex Energy (XEC), El Paso (EP), Tibco Software (TIBX), Monster Worldwide (MNST), Hershey (HSY) and Genesis Microchip (GNSS).

Bearish - Calpine (CPN), Urban Outfitters (URBN), Teva Pharmaceutical Industries (TEVA), Royal Caribbean Cruises (RCL), Trex (TWP), RealNetworks (RNWK), Check Point Software (CHKP), PetroQuest Energy (PQUE), FARO Technologies (FARO), Frontline (FRO), Serena Software (SRNA), Cubist Pharmaceuticals (CBST), Rambus (RMBS), MCI (MCIP) and Wal-Mart (WMT)

CramersMadMoney.com
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