Cramer: The right time to buy Twitter

Cramer: Free-fall in transports over
Cramer: Free-fall in transports over   

Sometimes all it takes to wake up the buyers is some hot news and a slow of a decline. For ages, Jim Cramer has said that he is concerned about the market because of the most important group out there—the transports.

Finally on Thursday, the "Mad Money" host saw some positive signs that the formerly hideous transports have a little bit of life left.

There was also breaking news that Dick Costolo, the CEO of Twitter, will resign, effective July 1. Cramer breathed a sigh of relief with this news, as he considers it to be the best, most poorly run company that he knows. He said this not to be mean, but because any company that is talked about this much and has so many investors leaving it because of mismanagement has to be poorly run.

"It is a hidden diamond that seemed to be on the verge of being seen as a cubic zirconium because of an almost universal acknowledgement by everyone I know that the CEO was in over his head. I used to say the only way this company could get better is to call ABC—anybody but Costolo," the "Mad Money" host said.

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Cramer viewed the resignation and statement that Twitter still anticipates earnings to be in line with previous forecasts, as just another boost of the fact that investors should own the stock. Now is the time to own the stock while the company fixes itself up, or prepares to put itself up for sale. He still thinks there is a chance for improvement at Twitter under a new CEO, or under the umbrella of another company.

And while the Twitter news was red-hot after the bell, it is what happened during the day of trading that really makes the difference. Thus, Cramer focused on the importance of the larger theme of how transports will impact investor portfolios.

When he refers to transports, this includes railroads, truckers, freight forwarders (like FedEx) and the airlines. Cramer has always said that the transports are a vital indicator of how the economy is doing, because nothing will be sold until it ships.

Looking at the Dow Jones transportation average, it peaked back in March and has been downhill ever since. Thus, the decline in the transports has had a hugely negative impact on the overall state of the market.

For instance, FedEx hit an all-time high on Thursday. This was because it was added to Citigroup's focus list and because earlier in the week FedEx boosted its dividend by 25 percent. Another positive sign.

"I think these good things are happening because FedEx is starting to see business improve overseas. I say that because the U.S. has been on firm footing for some time. It's Europe and Asia that have been real downers," Cramer said.

Thus, the leg up in the stock shows that there could be a possibility of a worldwide recovery coming.

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However, the airlines had an absolutely hideous May. American Airlines is down 25 percent for the year, and United Continental fell 21 percent. What matters to Cramer is that the airline stocks have been beaten down by analysts who regularly downgrade and cut numbers.

Ultimately, Cramer suspects that June may not be much better. However, at what point do the cuts become too low? He noted that while the airline stocks have still declined, the velocity of this decline has slowed down. And while it may still be too early to buy the airlines, he does think it is too late to sell them.

When adding up all of the positive signs that Cramer sees swirling in the market right now, he believes that the free-fall of the transport stocks is finally over. That means the global economy could be getting better, which could make the bulls very happy.

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