Mad Money

Finding Stocks That Beat the Market

Tale of Two Feds, Says Cramer

Cramer's goal on "Mad Money" is to help investors find stocks that do better than the overall market, even as the Federal Reserve acknowledged that U.S. economic growth has slowed, as it did on Wednesday. In particular, he's looking for stocks that can defy the Fed's dour outlook.

Take FedEx , for example. The shipping service giant's stock rose sharply on Wednesday after it posted better-than-expected profits and said it expects robust earnings in 2012. S&P Equity raised its price target on the firm to $120 from $113 and JPMorgan resumed coverage with an 'overweight' rating.

So what's FedEx doing right?

First, Cramer said the company is taking share while expanding its services outside of the U.S. Executives realized that to be profitable, it can't only service the U.S. It must expand into emerging markets.

Second, the company decided during the downturn that it would spend a lot of money to expand its aircraft fleet and improve its technology. That decision is now paying huge dividends, Cramer said. The company expects the coming year to bring considerable growth and diminishing cost headwinds.

Third, it's positioning itself as the "Internet play on transportation." Its Web exposure continues to increase, Cramer said.

Finally, FedEx managed to improve its balance sheet despite having spent $3.4 billion in capital expenditures. In other words, it's making a lot more money per package than it used to.

Although FedEx painted a more positive picture overall, it did share some of the same concerns about the economy that the Fed reported. Both cited problems with the Japanese supply chain, which led to a slower global business climate. Both thought higher fuel costs contributed to the slowdown, as well. They also gave us hope that these are transitory issues, Cramer said.

Stocks ended lower Wednesday because the Fed said some economic problems may persist. Yet FedEx's strong earnings results prove that some stocks are working right now, Cramer said.

"If the Fed chairman says things are slow, we don't want to accept that verdict," he said. "We want to find companies that rebel against it, and then we want to invest in them."

Call Cramer: 1-800-743-CNBC

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