Radian / Genworth
Cramer likes Radian and Genworth in part because they were able to survive the financial crisis. "This mortgage insurance business used to have multiple players before the downturn. Now there's just a handful and they are just beginning to turn profitable," Cramer said. And he believes business could increase significantly because the FHA, which was one of their biggest competitors, has started to pull back from mortgage insurance. That should drive shares even higher.
Cramer called Hartford a screaming buy. "True it made a series of terrible investments before the downturn began," he admitted. But Cramer thinks the worst is over for this and other insurance stocks. "Don't forget, Hartford recently reported one of the best quarters of the earnings season."
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Cramer thinks this stock is cheap. "Microsoft has been busy creating immense value away from personal computers, with its digital entertainment business," Cramer said. "It sells for 12 times earnings with a 2.75% yield. Given the tremendous balance sheet and the ability to create value with this division, I think the P/E is just absurd." Soon enough, the Street may this it's absurd too.
EMC is among Cramer's favorite ways to play the cloud. "It's a repository for big data," Cramer explained. "It has pretty much beaten or met all expectations yet the stock is still negative ytd."
Ford / General Motors
Cramer thinks both Ford and GM are probably among the most undervalued in the market. "Ford and General Motors have been pulled down endlessly by Europe," Cramer said. "Ford traded at $18 not that long ago before Europe soured. Now it's trading $13, but I think it's a better company now. And GM is just now back to where it was when the government brought it public a little less than three years ago. At $32, I think is a value."
Investors punished energy stocks earlier in the year and some of the selling may have been extreme. "Consider Conoco," Cramer said. "It has just gotten back to where it was two years ago despite the market being radically higher."
Again, Cramer thinks this stock is simply too cheap. Schlumberger is trading around $74. "It was $94 a couple of years ago and it's currently experiencing a huge pick-up in business." Shouldn't it be higher?
Cramer turned positive on the airlines a few months back and since that time has said US Airways is his favorite play in the space. "US Airways will soon be merging with AMR to form the largest airline on earth and I bet it can make more than any airline ever has in the history of this business. Why not get in now at $16 and change?"
Eaton is largely a bet on improvements in the global economy. "I think Eaton is going to have a very strong 2014," said Cramer. "Yet it sells at just 13 times what I think they can earn next year." Cheap.
Cramer also sees this stock as a beneficiary of global recovery. "Now I know the business has been weak of late, but if things get stronger overseas, GE could go for a run," Cramer said.
Caterpillar / DuPont
Both of these stocks also stand to benefit from an upswing in business activity. "Caterpillar and Dupont are both totally levered to worldwide growth that I think is just be beginning. In my opinion, they can be bought without too much price risk," Cramer said