RTX Corporation (RTX)

[dr_praeses]

8/27/07 Jim Cramer's "Mad Money"

During Monday's "Mad Money" show, Cramer evaluated and revisited retail, a to-date "house of pain" sector: retail. Cramer: But that is about to change with The Fed's upcoming interest rate cuts, so it's time to start liking retail. And finally the retail estimates are too low! Cramer likes: The Gap (GPS), Kohl's (KSS), American Eagle (AEO). First, The Gap. Cramer: GPS's new CEO, balance sheet, and operational improvements have been largely ignored by a skeptical Wall Street. But GPS also has more than $2 billion in cash, and considerable fat has been cut. GPS is a great turnaround story in a sector that's turning. Buy GPS, but wait 5 days before purchasing. Next, Kohls (KSS). Cramer: Retail has been treated as one lump, but when the sector turn occurs, you don't want to play the whole sector, just the best: KSS. KSS is down 28% since April 2007 . And KSS was down $1.87 to $57.05 today [ Monday, August 27, 2007 ]: that's crazy. KSS is probably the best risk-reward stock in this market, other than the home builders. Catalysts: private label products, new brands, and a better inventory management system. Buy KSS, if you agree with me that the Fed will cut short-term interest rates. In the Lightning Round, Cramer was bullish on: Herbalife (HERB), U.S. Bancorp (USB), Freeport (FCX), Novartis (NVS), Cal-Maine (CALM), Kraft (KFT), Dell (DELL), which Cramer believes is going to $30 by the end of 2007; PepsiCo (PEP), Raytheon (RTN), Lockhead Martin (LMT), General Dynamics (GD), and American Standard (ASD). In the Lightning Round, Cramer was bearish on: Blackstone Group (BX), NutriSystem (NTRI), Sanofi (SNY), and CPI Corp. (CPY). Then, Cramer evaluated American Eagle Outfitters (AEO). Cramer: AEO's insiders are buying. And sources tell me that AEO's back to school season is going well, so far. I think it's time to start buying AEO, which I believe is going to bottom in the $22-$25 range. [Note: AEO closed Monday, August 27, 2007 at $25.20 .] In the Sudden Death Round, Cramer had the following recommendations - Buy: Hudson City Bancorp (HCBK). Sell: New York Bancorp (NYB).