The stock market finally turned a new leaf on Friday, and Jim Cramer says bank stocks can now be valued based on earnings.
That might seem obvious to some, but it has been a long time since actual earnings were taken into account for bank stocks.
"Bank stocks can now be valued not on net interest margins, or book values, or loan losses and Justice Department fines, but earnings … they are the cheapest stocks in the market," the "Mad Money" host said.
Under President-elect Donald Trump "...I think there will be a recognition that the banks have too much capital and they need to be allowed to dividend more of it to their shareholders or make more home loans," Cramer said.
First Horizon National Corp's CEO Bryan Jordan also echoed the same optimistic sentiment about banking.
In an interview with Cramer on Friday, Jordan confirmed that after the election, First Horizon saw consumer confidence and small business confidence pick up. He also noted an uptick in requests for loans and willingness to borrow.
"We are seeing a tremendous amount of momentum and feel very, very good for the outlook of 2017 as we start the New Year," Jordan said.
Retail has also been on the forefront of investor concerns lately as bricks-and-mortar companies struggle to keep up with the competition from online giant Amazon.
Federal Realty is the shopping center real estate investment trust that owns more than 100 properties in highly populated areas of the country. The company continues to post solid results, but with the Federal Reserve expected to raise interest rates again in 2017, many investors are rotating out of the REITs and into bonds for the yield.
Cramer spoke with Federal Realty CEO Don Wood, who explained the company's approach to staying relevant amid an over-retailed environment.
"What we are trying to do is not look at 2017. We are trying to look at 2020 and 2025 to make sure what our product is, is the most flexible and relevant for today's retailers, not yesterday's," Wood said.
With earnings season kicking off next week, Cramer has his head in the game, but warns not to buy any stocks that have moved up too much.
"The playoffs are here and there is money to be made in the financials and the industrials and the oils," he said.
DexCom was a textbook example for Cramer on why it never pays to get too negative about a stock. Shares of DexCom soared 25 percent on Friday after the Centers for Medicare and Medicaid Services announced it would classify DexCom's latest device, called the G5, as durable medical equipment. Meaning, the government is willing to pay for it.
"If you have conviction about a company, and the story has plenty of catalysts, and the management is terrific and non-promotional … then good things can happen, often much sooner than you would expect," Cramer said.
In the Lightning Round, Cramer quickly provided his take on various stocks from callers:
Yahoo: "It's done. We're just going to take the cash and we are going to do some better things with it. Even an index fund over that one. Let me tell you, you're done there."
Sarepta Therapeutics: "No, again this one has already made its move. I think that the easy money has been made. I'm not going to get you in there for the tough money."