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Feast or Famine?

Tuesday, 26 Feb 2008 | 7:56 PM ET
Cramer's Food For Thought
Mad Money host Jim Cramer has fab five agriculture stocks for your portfolio.

Cramer likes to invoke the ghosts of leaders past – and, on occasion, top-40 rappers – to make a point. So when he declares “ethanol subsidies [are] crucifying mankind upon a cross of ethanol,” high-school-level history buffs probably recognize the William Jennings Bryan reference.

Cramer’s scornful diatribes against ethanol are nothing new to Mad Money fans. They happen almost as often as the Lightning Round. But he’ll be the first to admit the resultant “federally mandated bull market” in agriculture has been a boon to his Fab Five: Mosaic, Potash, Agrium, Monsanto and Deere.

Now, the sector’s getting another lift from sky-high food prices. Corn and soybeans have soared to record levels. Wheat prices during the trading day are maxing out. And the profits are going straight to the ag sector’s bottom line.

Now, the dark side of this expensive food, Cramer says, is that billions either don’t have it or can’t afford to buy it. So poor people from China to Brazil are going hungry as these crops are used for fuel or livestock feed. This means, at least to some extent, the Fab Five are getting filthy rich in the midst of a global famine.

What’s a loyal Homegamer to do? Join the Peace Corp.? Go vegan? (Here’s the definition just in case you’re in the same camp as Roger Clemens.)

Nope. Cramer recommends you buy the Fab Five. These stocks have returned anywhere from 93% to 222% since Cramer first mentioned them on the show. And because it’s still early in this sector’s multiyear cycle, Mosaic, Potash, Agrium, Monsanto and Deere should continue to outperform.

In fact, Cramer said he doubts they’ll stop until their combined market cap equals that of Exxon Mobil, $479.7 billion. The Fab Five are only at $210.6 billion, so “these stocks still have a way to go,” Cramer said.

If your conscience is still weighing on you after you cash in, you can always donate the profits to the United Nations World Food Program.

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

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